January, 2010
Chilled markets
That’s the CBOE Vix – a favourite Wall Street gauge of investor anxiety.
As you can see it’s at the lowest level since May 2008, when a lull after the Bear Stearns rescue gave way to an implosion.
[Redacted]
Using the word `Redacted’ about 840 times in a single 16-page document is begging for trouble.
The above is an excerpt from the Shortfall Agreement between AIG and Maiden Lane III, filed to the SEC in March 2009.
A Q4 refining headache for the oil majors
Shares in Royal Dutch Shell took a bit of a walloping on Wednesday as reports circled the city the company was guiding analysts lower on fourth-quarter numbers:
The reason for the move was seemingly a worse than expected performance in Shell’s downstream and gas operations in the period.
Lunch Wrap
On FT Alphaville Wednesday morning,
- Attack of the acronyms at SocGen.
- A still bearish Albert Edwards.
- Another gilt auction.
- Cheap commodity funding returns.
- Tiger Airways burning bright…
Gilt auction Wednesday
Last week FT Alphaville wrote that an auction of £2.25bn worth of 2049-dated gilts was widely expected to be the real test of markets’ demand for UK government debt, having fewer of the supporting factors that helped lift sentiment for an earlier £4bn 2015 gilt-offering.
Markets Live transcript 13 Jan 2010
Markets Live chat transcript for the chat ending at 12:17 on 13 Jan 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHbonjour NHand welcome NHTo Markets Live
The return of cheap commodity funding
Deutsche Bank on Tuesday revealed it was issuing “three-year market contribution securities” linked to the Deutsche Bank Liquid Commodity Index – Mean Reversion Plus.
The SEC filing, brought to our attention by Thomson-Reuters columnist John Kemp,
Tiger Airways burning bright…
Meet Tiger Airways, a Singapore-based budget carrier set up in 2004 to serve the Australasian market.
Read Tiger Airways IPO prospectus, filed today, Tuesday, with the Monetary Authority of Singapore.
Surely he can’t still be bearish?
So began the presentation of Albert Edwards at SocGen’s ‘Alternative Strategy’ event at London’s Marriott Hotel Grosvenor Square on Tuesday.
In front of a packed Westminster Ballroom — we reckon around at least 400 people turned up — Edwards revealed,
Attack of the acronyms at SocGen
That’s CDOs of RMBS to be specific.
And the erstwhile structured finance favorite (plus some revaluing of CDS) is behind the fourth-quarter profit warning issued by the French Bank on Wednesday morning.
Further reading
Elsewhere on Wednesday,
- Helpful suggestions for the Financial Crisis Inquiry Commission.
- 10 questions for the bankers.
- Led Zep market analysis.
- How many currencies?
- To bonus or not to bonus,
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Robert Reich: Why Obama must take on Wall Street
It has been more than a year since all hell broke loose on Wall Street and, remarkably, almost nothing has been done to prevent all hell from breaking loose again,
Snap news
Breaking pre-market news on Wednesday,
- Societe Generale warns of €1.4bn charge relating to stricter assumptions related to its valuations of RMBS-heavy CDOs – statement.
- Canon’s Oce bid may be in jeopardy as some shareholders balk – Bloomberg.
Cheer up M&A banker, 2010 should be better than 2004
Better by half-a-trillion or so, in dollars. That’s according to Citigroup, whose Financial Strategy Group have produced a digestible tome tackling nine themes that they think will shape the corporate finance agenda in 2010.
Let’s hope they have it ready in time…
Related links:
US and UK banks face political heat – FT
Eliot Spitzer: Top Ten Questions for the Financial Crisis Inquiry Commission – New Deal 2.0
And now weather-related shipping congestion
The natural gas, citrus, rock-salt and distillate markets have all been affected by colder than usual winter temperatures.
And just when you thought there couldn’t possibly be any more weather-related markets stories,
Bernanke shows Wall Street how its done
Now here’s a sentence we never expected to write: the US Federal Reserve posted full-year earnings for 2009 that beat expectations on Tuesday.
Here’s the full Fed news release.
Flashes via Reuters,
A brief UC Rusal primer
Oleg Deripaska’s UC Rusal and its 1,141 page/2.5kg IPO prospectus rolls into town later this week.
According to the Times, at the core of Rusal’s pitch to institutions is this claim on how it wants to invest in its $2.6bn flotation proceeds:
Meet the best bank on the Street
America’s beleaguered investment banks will have fourth-quarter earnings competition from an unlikely source: The Federal Reserve.
An analysis by the Washington Post has the central bank earning a whopping $45bn last year — about 42 per cent more than in 2008.
Lunch Wrap
On FT Alphaville Tuesday morning,
- Corporate change and cash calls.
- That extra 8.29bps (+50bps) in China.
- Japan Airlines doesn’t change.
- Santander’s debt rebranding.
- When cold is good.
China curbs more liquidity
It’s been speculated upon, and on Tuesday it became fact: China’s central bank raised banks’ reserve requirements by 0.5 percentage points in a bid to ward off soaring inflation. The new measures will be effective from January 18,
Fidelity forecasts positive decade for stocks
When it comes to talking their own books, the big beasts of the money management world are never backward in coming forward.
So far in January, we have been treated to Pimco’s view on UK and US government debt,
When cold is good
Recent cold weather in the northern hemisphere may be putting pressure on natural gas and rock-salt supply, but there’s one imbalanced market where the big chill is probably very welcome indeed.
We’re talking here about the refining business and related oil products market.
Markets Live transcript 12 Jan 2010
Markets Live chat transcript for the chat ending at 12:19 on 12 Jan 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHWe’re off NHup and running NHit’s 11.03am
Santander’s debt rebranding
On Monday, Santander said it was buying back as much as €2.5bn in debt, including hybrid bonds from Abbey and Alliance & Leicester, the British banks it bought in 2004 and 2008, respectively.
That same day,
That extra 8.29bps (+50bps) in China
Remember that extra 4.04bps China’s central bank added to its three-month bond auction last week?
On Tuesday, we are experiencing a redux — but this time it’s a full 8.29bps. Uh Oh.
The People’s Bank of China offered a yield of 1.834 per cent for the 20bn-yuan ($2.9bn) worth of one-year securities it auctioned on Tuesday,
JAL: Some things don’t stay the same, or do they?
The whole sorry saga of Japan’s foundering national flag carrier, Japan Airlines, is being hailed in some circles for producing at least one change in the arcane workings of Japan’s pseudo-nanny state:
Treasury ΣTCHings
Is this a picture of ants marching towards a picnic basket?
An early version of cult-classic computer game SimCity?
Or an experiment in digital building blocks gone awry?
No, it’s the latest premium offering from financial blog Zero Hedge — on preview,
Corporate change and cash calls
It’s obviously coincidental, but isn’t it funny how often management change follows an unpopular cash call?
It happened at Reed Elsevier, then Rexam and now Ladbrokes, which you may recall launched an unpopular £275m rights issue in October.