January, 2010
Going plural
Those words were first uttered by Royal Mail chair Allan Leighton when he left Wal-Mart, the US owner of British supermarket-chain Asda, to take on a portfolio of directorships.
But if Leighton has
How market making (ahem, prop trading) saved the day
Some interesting points raised by Andrew Haldane, the Bank of England’s financial stability executive director, in a speech given in Liverpool on Wednesday.
Namely:
Global banks’ net income in 2009 is expected to be around $60 billion,
In defence of the Squid (sort of)
A rare – and unexpected – defence of the bank-that-everyone-loves-to-hate comes from James Kwak at BaselineScenario who (quite correctly) observes that not many people have commented on Goldman Sachs’s “stunning”
Try, try, again at the Talf
The New York Federal Reserve has released the January subscription details for its Talf programme — the Fed’s effort to help jump-start the securitisation market.
All in all, the Fed accepted 46 bonds for the January legacy CMBS portion of its Talf programme,
Brics: get your funding kicks while you can
You may well be feeling “Bric-ked out” after the recent surge of media attention, including the FT’s all-singing, all-dancing “Building Brics” special. But that’s nothing compared to how you might feel later this year,
Further reading
Elsewhere on Thursday,
- Dissent at the Fed.
- And how the dollar loves a dissenter.
- 10 economic pieces worth reading.
- So is Geithner toast?
- Countdown to the Cloud ETF.
- A new defence for crooked brokers.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Volcker has the measure of the banks
Since Paul Volcker stood by Barack Obama a week ago as the US president unveiled banking reforms devised by “this tall guy”,
Snap news
Breaking pre-market news on Thursday,
- ING contests EC calculation of state aid it has received – statement.
- 3i Group realisations fall to £777m for the nine months to December versus £942m the year before – statement.
Hoenig the hawk
As expected, the Fed’s zero rate strategy holds for now, but for the first time in a year there was a dissenting voter: Thomas M. Hoenig…
Statement (our emphasis):
Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating.
Repairing the buck
Horses and stable doors spring to mind (inevitably), but the SEC has finally come up with a series of new rules for money market funds in the US in the hope that we do not see a re-run of the Reserve Primary Fund debacle.
Schedule A to Amended Shortfall Agreement
Lex counsels us that the accusations of a “backdoor bail-out” of AIG towards the end of 2008 are misplaced.
First, US banks had already been subject to a high-profile, front door bail-out. By November,
Presenting the ‘iPad’
No, it’s not a sanitary towel.
It’s the latest, much anticipated, offering from Apple.
Flashes coming out on the wire from CEO Steve Jobs as we pixalate:
18:02 27Jan10 RTRS-APPLE INC SAYS A FEW WEEKS AGO SOLD 250 MILLIONTH IPOD
18:04 27Jan10 RTRS-APPLE CEO SAYS APP STORE HAS MORE THAN 140,000 APPS
18:09 27Jan10 RTRS-APPLE CEO SAYS NETBOOKS “AREN’T BETTER AT ANYTHING”
Dalton who?
Press release Wednesday afternoon:
The Board of Wm Morrison Supermarkets PLC announces today the appointment of Dalton Philips as Chief Executive. Dalton, aged 41, will take up his new position in March 2010.
Spreads that speak for themselves
Here’s a simple exercise, mapping financial sector credit risk against sovereign risk in Europe using data from CMA Vision:
What happens when the world defaults?
The question one inevitably has to ask when all the risk in the world has been placed upon sovereign shoulders — who bails out the world when it defaults?
Davos delegates, as can be expected, are already working on a contingency.
Man hunt
That’s the price action in Man Group on Wednesday and over the past year.
At the time of writing, Man was the biggest faller in the FTSE 100 following another weak reading from is flagship managed futures fund.
Could UK money supply collapse post-QE?
The end of QE is nigh! Cue much hand-wringing over the gilt market and the potential impact of future tightening on equity markets.
But David Owen, of Jefferies Fixed Income, on Wednesday, has a nice exploration of a deflationary-doom scenario:
Grεεk-out!
Greek CDS has just hit an all-time high of 375bps, according to CMA Vision:
If I had a pound, peseta, drachma or a deutsche-mark…
. . . the real effective rate would be:
Or rather, that’s the purchasing power of the euro in each of the countries featured.
As BNP Paribas notes the rates currently suggest Ireland and Spain are operating at a higher effective euro rate than Greece.
China’s (un)real GDP
Here’s a chart showing China’s GDP growth rate in real and (un)real terms from Sean Corrigan at Diapason Commodities:
As Corrigan observes, while real GDP rose from a worthy 7.9 per cent year-on-year growth rate in June to a commendable 10.7 per cent by year end — the nominal rate shot up from an anaemic 4.0 per cent to a shocking 26.9 per cent in the same period.
Lunch Wrap
On FT Alphaville on Wednesday morning,
- Prop(er) pictorial irony at Barclays.
- European banks need €83bn.
- BBVA’s collateral damage.
- Seleno-Greek bond yields.
- Quantitative Ending.
Seleno-Greek bond yields
Rapid developments for Hellenic Republic bonds on Wednesday, as Greece denied an FT report that it had mandated Goldman Sachs to sell bonds to China. Yields on the benchmark 10-year jumped 18bps to 6.43 per cent.
Markets Live transcript 27 Jan 2010
Markets Live chat transcript for the chat ending at 12:17 on 27 Jan 2010. Participants in this chat were: Neil Hume, FT Bryce Elder
NHgood morning
NHand welcome to markets live
European banks need €83bn
Yep. Another day and (yet) another note on the impact of the Basel proposals.
And this one is pretty frightening.
Morgan Stanley’s Huw van Steenis reckons Europe’s big banks will need to find €83bn by 2012,
Prop(er) pictorial irony at Barclays
More proprietary trading pictorial irony here and here.
Related link:
Barclays plays down impact of Obama proposals – WSJ
China: Reaction or overreaction?
China’s credit-tightening moves continue to reverberate around the Asian region and further afield, despite some analysts’ views that the “China reaction” story is — well, an overreaction.
But “overreaction”
Quantitative Ending
Today is a rather big day for the UK gilt market.
It is the beginning of the end of the Bank of England’s quantitative easing; that is, the central bank’s buy-back of UK government bonds. QE, you’ll remember,
Time for the tin hat?
Remember this?
That was the ‘Santa rally’ and it has err…. gone.
In fact this is now the biggest setback for the UK market since the rally took hold last March:
China tightening fears,
BBVA’s collateral damage
Spain’s BBVA was trading over 4.4 per cent lower on Wednesday after reporting its fourth quarter results. As Bloomberg reported:
Jan. 27 (Bloomberg) — Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest lender,