December, 2009
Solving the fifty quid conundrum
Andrew Bailey, executive director for banking services and chief cashier, possibly needs to get out more from behind his counter at the Bank of England.
In a speech at the Banknote 2009 conference held in Washington over the weekend,
‘Don’t quit QE, double up!’
From the body that brought us Adam Posen, four policy recommendations:
• The Federal Reserve should purchase an additional $2 trillion of longer-term debt securities, with an average maturity of around 7 years.
A price hike for DB Powershares (updated)
Here’s a curiosity.
On December 3, Deutsche Bank Commodity Services announced it would be raising fees on seven PowerShares exchange-traded funds, worth a total $9.2bn, due to the added cost of extra “commodities regulation”.
Fannie, Freddie and FAS 166/167
Who would have thought a new accounting standard might end up increasing prepayment speeds on US mortgages?
The two US GSEs will be, like other US financial companies, adopting FAS 166/167 from 2010.
Lunch Wrap
On FT Alphaville Monday morning,
- Those unbelievable US payrolls.
- JPM targets 20% gain for Euro equities.
- Unstable correlations.
- SocGen’s skinned CLO.
- More UK natgas glut talk.
- The $700bn man in Further reading.
Markets live transcript 7 Dec 2009
Markets live chat transcript for the chat ending at 12:09 on 7 Dec 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE)
NH:
good morning
NH:
it’s 11.03am
Unstable correlations
BNP Paribas looks at the issue of cross-asset correlations on Monday, with some curious results.
First note the following charts, which depict correlations between equities and commodities, currencies and risk instruments (click to enlarge):
SocGen’s skinned CLO
Synthetic CLOs — gone for good or simply slumbering the deep sleep of securitisation?
From Asset-Backed Alert:
A resurgence of synthetic collateralized loan obligations appears to be taking shape in Europe,
[Outlook 2010] JPM targets 20% gain for Euro equities
Markets may have rebounded by 60 per cent since March, forecasts might look punchy, the consumer backdrop challenging and there’s the possibility of a dramatic bond market sell off and policy normalisation ahead. But in spite of all that,
More UK natgas glut talk
Talk about the UK natgas/liquefied natural gas (LNG) glut appears to be intensifying.
The latest to warn over the situation is Merrill Lynch, whose analysts on Monday described the market as “plagued by weakness”
Those unbelievable US payrolls
Just how amazing were the US payroll numbers released on Friday?
So amazing they’re verging on the (perish the thought) unbelievable, according to some analysts.
The consensus forecast among analysts for the November job loss had been -130,000,
Further reading
Elsewhere on Monday,
- Neel Kashkari: The $700bn man.
- “Has the greenback become the General Motors of currencies?”
- Asset prices and the dollar carry trade.
- The paradox of banknotes.
- “BJ Kang may be the most feared man on Wall Street.”
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Obama can still remould America
Barack Obama came to the White House with the ambition to nudge his country to the left — to make the US a bit less like the US and a little more like Europe,
Snap news
Breaking pre-market news on Monday,
- Cadbury to give formal response to Kraft’s offer on December 14 — statement.
- Shanks Group says it’s received “highly preliminary approach” from a PE firm — statement.
Darling lines up assault on bonuses
Alistair Darling, chancellor, is preparing a crackdown on “extraordinarily high” bankers’ bonuses when he makes his pre-Budget report on Wednesday, but is expected to reject a windfall tax on bank profits.
Tories ready to deal with EU for City’s sake
Shadow chancellor George Osborne has promised the City that a Eurosceptic Conservative government would not become isolated in Europe and that it would be “prepared to trade” with other member states to defend Britain’s financial services sector.
Kazakh groups to shift away from London
Companies from Kazakhstan plan to move part of their fundraising away from London, according to the country’s central bank governor, because UK investors failed to stand by the central Asian state during the financial crisis.
National Express closes in on new chief
National Express is close to appointing Dean Finch, the boss of London Underground maintenance company Tube Lines, as its chief executive, ending months of uncertainty at the troubled bus and rail operator,
Broker calls for OTC rethink
Plans to force over-the-counter trading of derivatives on to exchanges to reduce counterparty risk need to be rethought by regulators, according to the Asia head of one of the world’s biggest brokers. Pierre Gay,
European banks to face capital demands
Big European banks are likely to be forced to cut their balance sheets or use a large proportion of their profits to build up capital, according to a new analysis of a proposed regulatory limit on total bank borrowing.
Silicon Valley set for IPO rebound
Silicon Valley is on the verge of a new bout of Wall Street fever, as private technology companies rush to cash in on the first signs of stock market interest in initial public offerings for more than two years,
Parmalat founder’s works of art seized
Investigators in Italy scored a significant coup at the weekend in attempts to reclaim assets connected to the collapse of Parmalat with the seizure of at least €100m of paintings and art works belonging to Calisto Tanzi,
Bloomberg eyes more acquisitions
Bloomberg is planning a further year of aggressive investment and may make more acquisitions as the financial data group seeks to broaden its reach to become the world’s “most influential source of news”,
Overnight markets: Up
Asian stocks rose for the fifth time in six days after the US reported its lowest monthly job losses since the recession began, Bloomberg said. Tokyo-based airline JAL rose by the most in seven weeks after the Yomiuri newspaper said the carrier may get a loan guarantee of as much as Y700bn ($7.8bn) from the government.
Bank windfall tax looms
According to PestoWire:
The Treasury is preparing to levy a windfall tax or super tax on British based banks, which could be announced as soon as Wednesday in the pre-budget report and would raise considerably more than £1bn a year for two or three years.
The Weekender
Selected reads from FT Alphaville this week,
- Credit Suisse’s chief global strategist Jonathan Wilmot guest edits FT Alphaville.
- Camel finance at the Dubai stock exchange.
- Haircuts in Dubai.
Currency intervention watch
FX-hedged, but fear the prospect of intervention by some meddling government?
Well, lucky for you, Morgan Stanley has knocked up some currency-intervention models to help guide you through the uncertainty.
US non-farm payrolls fall JUST 11,000 in November
US non-farm payrolls fell by JUST 11,000 jobs in November, the Bureau of Labor Statistics said on Friday.
Repeat non-farm payrolls fell by JUST 11,000 in November.
And that’s a huge surprise: the analyst consensus was for a loss of 130,000,