November, 2009
Bullish debut for China property IPO
Shares of Evergrande Real Estate rose as much as 20% on its debut in Hong Kong on Thursday, shrugging off the cool investor response to a flood of recent Chinese property offerings. Guangzhou-based Evergrande traded at HK$4.00 at 3amGMT,
Fed to cut GSE debt purchase
The Federal Open Market Committee on Wednesday decided to shave $25bn off the planned $200bn purchase of debt issued by state-owned mortgage giants Fannie Mae and Freddie Mac. The decision was justified on technical grounds reflecting “the limited availability of agency debt”.
Aviva eyes ING break-up
Aviva, the UK’s second-biggest insurer, will examine the break-up of ING to see if it will yield any acquisition opportunities, according to Andrew Moss, Aviva’s CEO. The Dutch financial services group is selling its insurance and investment management business in order to win European Commission approval for the receipt of state aid.
Toyota to exit F1 sponsorship
Toyota is to follow Honda and BMW out of Formula One as Japan’s top carmaker battles slumping car sales. Akio Toyoda, chief executive, apologised to fans on Wednesday and said Toyota had “tried everything”
Overnight markets: Down
Asian stocks fell on Thursday, reports Bloomberg, led by consumer companies and banks, after South Korea said it was “unclear” whether the economic rebound will be sustained and New Zealand’s unemployment rate rose to a nine-year high.
Goldman’s Q3 trading, a breakdown by product
The bank that never knowingly made a loss on more than one day during the third quarter has — via its 10-q filing — provided further detail on the nature and success of its trading activities in the three months to September 2009.
El-Erian: Short-term stability at the cost of longer-term instability?
Guest post: Pimco chief executive Mohamed El-Erian looks at the Federal Reserve’s very delicate balancing act…
The message from the FOMC is clear: let’s not rock the boat in the anticipation (or hope) that the US economy can transition to more robust low-inflationary growth.
Manipulated markets, domain names edition
One thing has become abundantly clear in 2009: if there’s a market, it can undermined.
Consider the following announcement from domain name registrar SnapNames on Wednesday (emphasis ours):
Recently,
EXCLUSIVE SNAPS: JAILBIRD LUKES IN SLAMMER!
FT higher-ups have been trying to keep the location of a new blog by disgraced former a-b global boss Martin Lukes secret ahead of a full-colour launch on Thursday.
But we’ve found it. It’s here, and it’s called ?Inside Out!
On an initial reading,
Fed funds: “unchanged”
No surprises in the Federal Reserve’s decision on Wednesday to keep interest rates at 0.25 per cent, but you will want to peruse the statement, which is here.
Snaps:
– Conditions in financial markets were roughly unchanged,
A fresh outbreak of Nifty 50s
Peter Oppenheimer’s global research team at Goldman Sachs have come out with what they are calling two new BRIC Nifty 50 stock baskets.
One of these so-called baskets covers companies in developed markets that have heavy BRIC exposure;
S&P critiques the US “too big to fail” draft bill
Rating agency Standard & Poor’s is a touch concerned the initial draft of the Financial Stability Improvement Act of 2009 might hurt the creditworthiness of US financial firms.
The draft bill, released in October by the Treasury and the US House Financial Services Committee,
Chinese takeout: FSA insider trading crackdown continues
The UK’s financial regulator has struck again, and this time the FSA has nailed the big boys.
From the regulator on Wednesday:
FSA/PN/149/2009
04 November 2009
FORMER CORPORATE BROKER INTERN AND FATHER FOUND GUILTY OF INSIDER DEALING
Matthew Uberoi and his father,
CDS report: Earnings beats, positive data boost sentiment
Markit’s Gavan Nolan wrote this CDS report
European credit indices recovered losses from yesterday’s correction amid signs that the major economies are continuing to improve. The Markit iTraxx Europe index was trading around 87bp,
US consumer bankruptcy filings hit fresh high in October
The recession might be over — if the most recent US GDP data are any indicator — but the US consumer is still feeling a world of hurt.
Consider the following data point from the American Bankruptcy Institute,
The herd vs the reward, or in praise of contrarian investing
In a typically erudite note on Wednesday, SocGen’s Dylan Grice declared his allegiance to the anti-groupthink brigade, warning of the deleterious effect of the herd mentality on returns.
As he put it:
Cuomo files antitrust lawsuit against Intel (UPDATED)
New York attorney general Andrew Cuomo filed a federal antitrust lawsuit against Intel on Wednesday. The suit comes after an investigation into the world’s largest chipmaker that started in January 2008.
Examining the US liquidity trap
The Fed has published an interesting working paper on the subject of foreign shocks to a country bound by zero rates. Authored by Martin Bodenstein, Christopher Erceg and Luca Guerrieri, it seems roughly to conclude that a zero-rate liquidity trap has the effect of amplifying the effects of a foreign shock on GDP.
You can bet there’ll be a Goldman inquiry into that one day…
Goldman Sachs’ Q3 daily trading revenues from the bank’s just-released 10-Q filing:
Related links:
Morgan Stanley and VaRiations – FT Alphaville
On Goldman’s fat tail risk – FT Alphaville
The Deferred Tax Asset disaster
Does anyone remember Deferred Tax Assets?
Banks like Citi used to be (and in fact, still are) stuffed with them. In fact the assets have become a point of contention over the past year and a half, as regulators,
Lunch Wrap
On FT Alphaville Wednesday morning,
- Kradbury: Come on Irene.
- NAMA, SPVs and other Irish magic.
- John Varley’s inferno.
- Why trading machines don’t like news releases.
- Booting the debt-buyback tax break.
[Ireland's Bad Bank] NAMA, SPVs and other Irish magic
Given that Fitch has just downgraded Ireland’s sovereign rating from AA+ to AA-, we thought you might be interested in a bit of Irish analysis. The below is an FT Alphaville round-up of the latest developments regarding Ireland’s bad banks plan — the so-called National Asset Management Agency,
Markets live transcript 4 Nov 2009
Markets live chat transcript for the chat ending at 12:14 on 4 Nov 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:hola NH:it’s 11.03am
[MoneyTech] Why trading machines don’t like news releases
Well, who knew?
Algorithmic FX trading bots — which use computer formulae to trade currencies at high frequency — apparently don’t like news releases, or at least, not initially, according to a new working paper from the Federal Reserve.
Kradbury: Come on Irene
Kraft’s third quarter earnings might have been delivered with jazz hands-a-waving, but those looking for hints of a heavily sweetened Cadbury offer were left disappointed.
While “remaining interested”,
Asset bubble warnings, international monetary institution edition
Another day, another global asset bubble warning.
This time it comes courtesy of the World Bank’s chief economist for the East Asia & Pacific region, Vikram Nehru, who cautioned on Wednesday that risks to a sustainable recovery in the region still remain strong,
Booting the debt-buyback tax break
Clever clever Alliance Boots.
Having booked an exceptional gain of £106m last fiscal year by buying back £191m of its debt below par, it looks set to repeat the performance this year.
From the FT:
Further reading
Elsewhere on Wednesday,
- If the economy’s stagnant, why are stocks up?
- The edge: a golden opportunity remains.
- On the clash of economic theories (and commentators).
- John Paulson once had self-doubts.