December, 2009
So who’s lying to their customers – Citibank or the WSJ?
Newspapers, especially American newspapers, like to think that they check facts, giving their readers information that can be considered fair and accurate.
The real world, of course, is more complicated.
Smithers: ‘There’s no reason to hold bonds’
Economist and commentator Andrew Smithers (of Smithers & Co) — famed for some of the decade’s more bearish (yet accurate) calls — leaves us with a very clear cut view on for 2010.
In short, while stocks remain overvalued,
Who’s a Die Hard fan of vodka?
Bruce Willis of course.
Reuters reports the Hollywood actor has agreed to buy a 3.3 per cent stake in French-Polish vodka maker Belevedere as part of a multi-year partnership deal signed back in April.
Lunch Wrap
On FT Alphaville on Tuesday morning,
- Moody’s downgrades Greece to A2.
- What is the BoE’s QE plan B?
- A carbon cop-out.
- Hamp, what is it good for?
- Opec eyes OECD demand.
- The weather outside is frightful…
- Russia forever counter-trend.
Opec eyes OECD demand
The Organisation of Petroleum Exporting Countries meeting in Luanda, Angola, agreed on Tuesday to leave oil output curbs unchanged, while calling for greater compliance with existing output targets — a signal the cartel currently believes the market to be well supplied.
Hamp, what is it good for?
In addition to the difficulty of converting temporary mortgage modifications into permanent ones, one of the big question marks hanging over the US Treasury’s Home Affordable Modification Plan is the redefault rate.
Carbon cop-out
FT Energy Source, FT Alphaville’s sister blog, has provided ample coverage of the 2009 Copenhagen Climate summit, but we would like to draw readers’ attention to one particular fallout: the associated slump in European Union carbon allowance prices following the meeting’s conclusion last weekend.
The weather outside is frightful…
(…but the natgas-fire is so delightful.)
They’re calling it the ‘storm of the decade’ in the United States.
The winter tempest that swept through the East Coast over the weekend, bringing heavy snowstorms and sub-zero temperatures,
What is the BoE’s QE plan B?
Central bankers, as Alan Greenspan learnt to his regret, need to look like they have a plan B.
And so does the Bank of England. Combative MPC member Adam Posen on Tuesday morning seems to be dropping strong hints that something could be cooking over on Threadneedle Street.
‘More bad news’ on bank CDO exposures to come, BofAML says
FT Alphaville wrote in October 2008 that, by and large, banks’ holdings of synthetic corporate CDOs had yet to be written down. Fast forward to December 2009, and it looks like the same might still be true for the majority of those holdings.
Greek bond blow-out
After the downgrade, the debt deluge:
Further reading
Elsewhere on Tuesday,
- Financial villains of the decade.
- If Wall Street ran the airlines.
- What markets should watch out for in 2010.
- Beware the Mediterranean triangle of “anarchist violence”.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Philip Stephens: It’s too late to take the politics out of banking
The storm may be raging about them, but bankers have been locked in a contest to say something truly silly,
Snap news
Breaking pre-market news on Tuesday,
- Kingfisher delisting on the NYSE Euronext due to low level of trading – statement.
- Carillion awarded £157m Public Private Partnership project in Toronto – statement.
Sanofi to acquire Chattem of the US for $1.9bn (updated)
Here’s something unseasonal: an M&A announcement coming out of Paris and Chattanooga, Tennessee, days before Xmas.
Sanofi-Aventis is paying $1.9bn in cash, or $93.50 per share, for Chattem, a decidedly consumer-facing business which has been producing toiletries,
Cash and carry
It was a lesson writ large by the financial crisis; dabble in carry trades denominated in dinky currencies at your own peril.
The tale of the Icelandic krona serves as a particularly brutal parable of carry traded excess.
Lunch Wrap
On FT Alphaville Monday morning,
- A Mexican standoff at the Swiss National Bank.
- More rating agency hi-jinx with re-Remics.
- Deripaska wins, but not in the way he would want to
- Austria is Erste to be bothered by Basel III.
Deripaska’s Pyrrhic Rusal victory
For the last year Oleg Deripaska has been a man on a mission.
And after months of wrangling with regulators, UC Rusal, his heavily indebted aluminium company, looks finally to have won approval for a $2bn float in Hong Kong and Paris come January.
Swiss franc forex standoff
A Mexican standoff is mounting between Switzerland’s central bank and the outlaws of the forex markets.
On Monday morning traders are again testing the Swiss National Bank’s resolve to stop further franc appreciation,
Erste Basel-bothered is Austria
It looks like Austria has one more thing to worry about: The Basel banking reforms.
Part of the Committee’s proposals to `purify’ common equity Tier 1 capital for banks involves excluding minority interests from the regulatory measure.
Further reading
Elsewhere on Monday,
- Will the dollar continue to rally?
- Now presenting, HM finances.
- And the best performing fund of the decade is …
- How the British middle classes shaped the wine industry.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Max Hastings: The end of Britain’s long weekend
It seems bizarre that a year that began with Britain steeped in gloom should end with rising house prices,
Snap news
Breaking pre-market news on Monday,
- Kraft looks for shareholder approval to issue shares for Cadbury bid – statement.
- London Stock Exchange announces acquisition of Turquoise – statement.
- Nigerian oil minister says Shell has not informed Nigeria of any plans to sell oil fields – Reuters.
The Weekender
First, some housekeeping: Markets Live is now on holiday until Tuesday, January 5th. Obviously, if for some reason the roof falls in over Xmas, we’ll power-up a session. But Neil, Bryce and Miles need a short break.
HMRC bank payroll tax clarification!
Right, here it is. The headline-grabbing news (as expected) is that insurance companies, asset managers and stockbrokers will be exempt from the banker bonus tax.
That’s right, all non-banker financial types in the UK will escape with their bonuses intact this year.