August, 2009
Overnight markets: Down
Asian stocks fell for the third time in four days on Friday as metals prices declined and concern that a US unemployment report later Friday will hurt investors’ confidence in a global recovery. Futures on the S&P500 Index lost 0.1% after the gauge slipped 0.6% on Thursday amid predictions that US labour figures due Friday will show unemployment rose to 9.6%,
Nasdaq and BATS to stop offering flash trading
The war on high frequency trading continues apace – and already there have been some high-profile casualties, or at the very least, capitulations.
Both Nasdaq and BATS said on Thursday they will stop offering flash trading – mere months after they initiated the service on June 3.
CDS report: Bank of England QE boost sends spreads tighter
This CDS report was written by Markit’s Gavan Nolan
European credit and equity markets rallied in tandem today, helped by a surprise intervention from the Bank of England. The Markit iTraxx Europe index was trading around 90.5bp,
SEC charges Hank Greenberg with talking up AIG
Speaking of a busy week for the SEC (emphasis FT Alphaville’s):
Washington, D.C., Aug. 6, 2009 – The Securities and Exchange Commission today charged former American International Group Chairman and CEO Maurice “Hank”
The curious case of Goldman Sachs’ liabilities
Barclays Capital have taken a closer look at Goldman’s 10-Q and unearthed — thanks to the former investment bank’s new status as a commercial lender — something of a curiosity in its balance sheet.
Deutsche Bank on those drowning US homeowners
Karen Weaver, Deutsche Bank’s formidable global head of securitisation research, warned in a report on Wednesday that the percentage of US mortgage-holders facing negative equity would nearly double by 2011.
Double secret QE
The Bank of England has just decided to extend its programme of quantitative easing by £50bn.
It’s also widened the range of gilts it is buying back from the market to include bonds beyond 20 years in maturity — something it had previously avoided given their general illiquidity — and has made a rather interesting and related agreement with the UK’s Debt Management Office.
Goldman: 2008 commodity redux coming
Goldman’s commodity-equity team — as made famous by analyst Arjun Murti and his $200 oil call last year — is out with a new collaborative note. Unsurprisingly, it’s pretty bullish.
A choice extract (our emphasis):
Lunch Wrap
On FT Alphaville Thursday morning,
- Bank of England extends QE by £50bn.
- Goldman awaits the rise of the women.
- Together we fall, together we rise.
- Lloyds, out of the frying pan and out of the APS?
- China stocks slip on liquid(ity) concerns.
Bank of England holds interest rates, extends QE by £50bn
As expected, the Bank of England decided on Thursday to maintain benchmark interest rates at 0.5 per cent.
In a much more contentious move — opinion was split on whether the BoE would do this by even £25bn — the Bank also decided to extend its Quantitative Easing programme by an additional £50bn,
China stocks slip on liquid(ity) worries
China’s Shanghai Composite index closed down for its second consecutive day on Thursday, as investors reacted to a potential liquidity tightening.
The central bank’s quarterly monetary policy report,
Markets live transcript 6 Aug 2009
Markets live chat transcript for the chat ending at 12:15 on 6 Aug 2009. Participants in this chat were: Paul Murphy (PM) Miles Johnson, FT (MJ) PM:Good morning. PM:Welcome
Goldman awaits the rise of the women
Perhaps this reflects our own biases more than Goldman’s, but we think the investment bank has come over strangely feminist in its latest research note.
“The Power of the Purse: Gender Equality and Middle Class Spending”
Together we fall, together we rise
We know correlations between sectors and asset classes have been intensifying across markets. What we find really interesting, however, is just how dramatic those correlations now appear.
As Don Fishback over at Minyanville points out (our emphasis):
Lloyds, out of the frying pan and out of the APS?
On Wednesday we mentioned that the finalised terms of the UK government’s Asset Protection Scheme would be crucial for the future of Lloyds Banking Group.
Recall that under the initial terms of the APS deal,
Hold tight for the ECB’s monetary snooze-fest
Ho hum. The broad consensus among economists about the direction of eurozone interest rates is that the ECB will leave them unchanged, keeping the benchmark rate at its record low of 1 per cent, when it meets in Frankfurt later today (Thursday).
As good as Goldman
From the bank’s second-quarter 10-Q:
Related links:
Goldman’s $100m days shatter its records – FT
On Goldman’s fat tail risk – FT Alphaville
Further reading
Elsewhere on Thursday,
- Naked, yes. But evil?
- Goldman’s Barry Bonds complex.
- What in the world is a bank doing in the oil-trading business?
- In Fed We Trust.
- “Consumer protection laws should stay with the bank regulators”
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
How to rebuild a shamed subject
Lord Skidelsky, author of Keynes: The Return of the Master, writes: It was to be expected that our present economic traumas would call into question the state of economics.
Snap news
Breaking pre-market news on Thursday,
- Commerzbank posts $1.1bn loss on higher loan provisions – statement.
- ITV confirms sale of Friends Reunited, reports half-year results – statement, statement.
Deutsche Bank eyes Sal Oppenheim stake
Deutsche Bank is in advanced talks about taking a stake in Sal Oppenheim, one of Europe’s best-known private banks, in a deal designed to strengthen its business with affluent German clients. Germany’s biggest bank has made a non-binding offer for up to a minority stake in Luxembourg-based Sal Oppenheim,
Goldman has record trading days
Goldman Sachs traders made more than $100m in revenues on each of a record 46 days in the second quarter, while losing money on just two days, the bank said on Wednesday in a Q2 update that highlighted the strength of its trading operations.
Judge delays BofA, SEC settlement
A US federal judge has refused to approve a $33m settlement between the SEC and Bank of America related to BofA’s acquisition of Merrill Lynch, according to a court filing, reports Reuters. Judge Jed Rakoff said the settlement,
Boost for Lloyds as bad debts hit peak
Shares in Lloyds Banking Group surged nearly 11% on Wednesday, as the part UK state-owned bank reported losses of £4bn but boosted investor hopes by signalling that its bad debts had peaked. The bank said more than £13bn of its loans had gone bad in the first half of 2009,
SocGen buoyed by investment banking
Société Générale, France’s second largest bank, returned to profitability in the second quarter, as strong performances from its retail and investment banking units helped offset balance sheet writedowns and weakness in its Russian retail banking division.
China’s Everbright IPO raises $1.6bn
Everbright Securities on Wednesday raised Rmb11bn ($1.6bn) in the first IPO by a Chinese brokerage in almost seven years, as investors piled into a company set to benefit from a surging stock market, reports Bloomberg.
Bank of England may end bond buying
The Bank of England’s policy committee is expected on Thursday to decide whether to end its programme of purchasing gilts to help economic recovery, reports the NYT. Recent comments by Bank officials point towards a temporary halt of the plan as the central bank awaits clearer economic signals.
Crude leads commodities recovery
Oil prices rebounded on Thursday, leading a strong recovery across commodity markets after China’s central bank pledged to maintain loose monetary policy. Fears that China might clamp down on bank lending prompted a sell-off in the previous session.
US steps up ‘naked short-selling’ crackdown
The crackdown on ‘naked short-selling’ intensified on Wednesday as the SEC brought its first enforcement cases against the practice. In a filing, the SEC said options traders at Hazan Capital Management
Details emerge of Chinese bank fraud
Details are emerging of China’s largest suspected bank fraud after the former chairman of a company listed on London’s Aim market appeared in a Chinese court last week. Prosecutors in the southern city of Guangzhou allege that Wang Sheng,