July, 2009
Overnight markets: Mostly down
Most Asian stocks fell on Wednesday, snapping the MSCI Asia Pacific Index’s 11-day rally, as declines by commodity producers overshadowed gains by steel and electronics companies. Futures on the S&P500 were little changed;
Ambac clings to life (updated)
RBS analyst Tom Jenkins described Ambac as being “on life support” in a note on Tuesday; FT Alphaville tends to agree.
The bond insurer (remember those?) said on Monday that it expected to report that its statutory losses on credit derivatives (read:
Rosenberg (finally) sees green shoots
Gluskin Sheff’s chief economist and David Rosenberg appeared to be delighted by the rise in the Case-Schiller index of US house prices on Tuesday:
CASE-SHILLER HOME PRICE INDEX RISES – NOW THIS IS A GREEN SHOOT!
One by one,
CDS report: Rally wanes amid negative earnings news
This CDS report was written by Markit’s Gavan Nolan
The rally in credit lost momentum today as earnings news turned negative on both sides of the Atlantic. The Markit iTraxx Europe index widened to 95.5bp,
Lex: High-frequency trading
The suspicious thing about financial conspiracy theories is they are all alike….
But it is worth distinguishing between the illegal and the irritating. Frontrunning — or trading ahead of customer orders — is the former.
Evil commodities speculators in the dock
The CFTC hearings into the evil commodity speculators have got under way in Washington. Those testifying on Tuesday include:
Panel One: Jeff Sprecher, Intercontinental Exchange and Terry Duffy,
Dragon-king of the outlier events
This is a black swan.
This is a dragon-king.
Which are you more terrified of?
In a new paper, author and physics professor Didier Sornette, presents the concept of “dragon-kings” — outlier events that exist within conventional power law distributions.
A vision of trading from 1995
Here’s an interesting vision of investing from 1995 as penned by Peter Bennett, an electronics engineer, designer and developer of information and trading systems for financial exchanges. It was featured in the World Handbook of Stock Exchanges that year.
“Goldman Sachs is not a giant vampire squid”
So says Michael Lewis, he of Liar’s Poker fame, but not for the reasons you might think.
From Lewis’s latest Bloomberg column, in which he (lightheartedly) debunks some of the Goldman Sachs rumours currently in circulation:
Accounting is semi-officially exonerated from causing crisis
Phew. That was close.
The Financial Crisis Advisory Group has come out and said it — accounting rules were not the root cause of the financial crisis.
In fact, the FCAG, jointly set up by the international and US accounting standards boards,
Lex: BP
The oil giant’s numbers look good at first glance, but upon closer inspection there is still much work to be done.
It all looks fairly rosy, until you peer more closely into the numbers. The challenge that BP faces is common to all oil companies:
Lunch Wrap
On FT Alphaville Tuesday morning,
- BP is safe for now, but demand is in the toilet.
- We’re all Mrs Watanabes now.
- Some CMBStress.
- IT paranoia.
- Asia’s forever blowing bubbles.
- Who loves hedgies?
- Paul Tudor Jones – the trader.
BP results, ‘demand is in the toilet’ edition
From BP’s Q2 results on Tuesday:
Indicator refining margins in the third quarter to date have been lower than in the second quarter and substantially below 2008 levels. Refining availability is expected to remain higher than in 2008,
Asia’s forever blowing bubbles
The warnings have been slow but steady – and now both volume and pace are increasing: asset bubbles are back in Asia.
As the FT notes on Tuesday, China has warned its banks to ensure that unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming.
Markets live transcript 28 Jul 2009
Markets live chat transcript for the chat ending at 12:07 on 28 Jul 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy (PM) NH:Good morning NH:and welcome to Markets Live
Safe for now
BP OUTPUT RISES AS CEO HAYWARD SEES COSTS FALLING $1 BILLION MORE THAN EXPECTED BY YEAR-END.
Compared to the same period last year, BP’s reported daily production jumped 4 per cent to more than 4 million barrels of oil equivalent in the three months to end-June.
CMBStress
That is some jump in the CMBS delinquency rate:
That’s from credit rating agency Realpoint Research, who estimate that the delinquent unpaid balance for CMBS increased by $9.87bn to a one-year high of $28.65bn in June.
IT paranoia
Tokyo – like certain other financial centres – is not short of unemployed expat finance industry types, many of them living off pay-out deals (cushy or otherwise) while they seek new jobs in Japan or elsewhere.
Who loves hedgies?
Not everyone, clearly.
In fact, the reputation of the alpha-seeking brigade continues to deteriorate, according to the 2009 Financial Markets Integrity Index for the US, compiled by the CFA Institute.
We’re all Mrs Watanabes now
Professional investors would immediately be suspicious of anyone claiming even the lower-end of the monthly returns being promised by sellers of the various off-the-peg algorithmic FX trading systems now being banded about the web.
Paul Tudor Jones – The Trader
No, this isn’t a spoof but it is very, very funny. According to Dealbreaker, PTJ wanted this documentary, which has gained cult status, with copies of the VHS original changing hands for hundreds of dollars online,
GLG goes physical
The news that London-based hedge fund GLG intends to seed an oil production company is interesting on many fronts. For one, as the FT reports, it marks a clear drive for diversification and expansion at a company that currently looks after some $18bn in hedge funds and long-only investments.
Pensions, searching for their place in the accounting world
What’s this? Now the even the pension trustees have gone all theoretical on market prices.
From the Marathon Club, comprised of trustees and senior executives representing pension schemes with £179bn of assets,
Further reading
Elsewhere on Tuesday,
- Grantham and ‘boring fair price’.
- The bull bandwagon is getting crowded.
- So is Goldman Squid good, evil, or just misunderstood?
- Real Treasury yields at their highest.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Analysis: The oilgarchs that were too big to fail
The change in fortune for Russia’s oligarchs reveals as much about the Kremlin’s shifting attitude to the tycoons as it does about how foreign banks are to go about recovering hundreds of billions of dollars in debt.
Snap news
Breaking pre-market news on Tuesday,
- Deutsche Bank posts Q2 net income of €1.1bn — statement.
- Investec proposes placing to boost Tier 1 capital — statement.
- Charles Stanley Q2 revenue up 2.4 per cent to £26m — statement.
US home sales surge in June
New house sales in the US jumped by 11% in June, fuelling claims that the market has bottomed out after three savage years amid falling prices, low mortgage rates and aggressive government incentives. The monthly rise was the sharpest in nearly nine years,
GLG to launch oil production venture
GLG Partners, one of the world’s largest hedge fund managers, is planning to launch an oil production venture to be listed in London in autumn. The venture, to be called Lothian, will be seeded by GLG and will use money raised through its flotation,
US to divulge detail on short-sellers
US regulators will in coming weeks release more detailed information on short-selling activity as they move to further boost transparency of trading. The SEC said on Monday that aggregate short-selling volumes in shares would be published on a daily basis while information about short-sale transactions in all publicly traded shares would be provided with a one-month delay.
SEC to review ‘flash’ orders
The US SEC on Monday said it was examining “flash” orders – trades made at lightning speeds on electronic systems – after calls by US Democrat senator Charles Schumer to ban the practice. Officials are conducting a review that includes examining flash orders by exchanges and automatic trading systems that disseminate information to select market participants,