January, 2010
The unenviable, uncertain future of the bond insurance industry
One of the most common criticisms of the financial media unleashed during the Not So Great Depression was “you didn’t warn us about [insert little known company, acronym, structured product or dubious form of home loan,
Lunch Wrap
On FT Alphaville Thursday morning,
- Sprεαding…
- Bye bye prop desks?
- People on the pitch for ManU bond.
- Lloyds CoCo pops, or not?
- A UK money supply shock.
- Buyer wanted for ITV stake.
A UK money supply shock
Inflation is always and everywhere a monetary phenomenon.
Milton Friedman, A Monetary History of the United States 1867-1960 (1963)
Always and everywhere apart from in Britain, that is.
The Bank of England on Thursday published provisional estimates of broad money (M4) and credit (M4 lending) for December,
Markets Live transcript 21 Jan 2010
Markets Live chat transcript for the chat ending at 12:17 on 21 Jan 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHand welcome to Markets Live
Sprεαding…
Dramatic developments in the European government bond market, where the spread between the Greek 10-year and German bunds widened to over 300bps on Thursday — the highest level since the Hellenic Republic joined the eurozone:
Buyer wanted for large stake in ITV
From Reuters:
UK COURT DENIES BSKYB APPEAL OVER KEEPING ITV STAKE.
And from Jane Croft, the FT’s law correspondent:
BSkyB will have to sell its controversial stake in ITV, the Court of Appeal ruled on Thursday.
[Modern Football Finance] Some people are on the pitch… (Updated)
Official price talk — or the indicative range — for Manchester United’s controversial £500m bond issue is expected on Thursday and if the market whispers are correct it could be the club’s best result of the season.
Coco *pops* or not?
UK Banks were weaker across the board on Wednesday. What gives?
Here’s one suggestion from Evolution Securities’ Gary Jenkins:
FTSE 100 [fell 1.67% on Wednesday], not helped by further bank weakness led by a combination of factors,
Further reading
Elsewhere on Thursday,
- The easy guide to Wall Street pay and bonuses.
- “Goldman Sachs bonus day is the most exciting day of the year.”
- More big debate on Obama’s big bank tax.
- Wall Street’s dirty little secret.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Charge for news or bleed red ink
Alan Rusbridger, the editor of The Guardian, spoke bluntly last week when he described the financial effects of the internet on his newspaper to journalism students in Coventry:
Snap news
Breaking pre-market news on Thursday,
- China grows 10.7 per cent in fourth quarter, inflation up 1.9 per cent in December – FT.
- Frank Timis’s African Minerals raises £80m via underwritten equity issue at 400p – statement.
A ticking problem with the US national debt
Irritatingly, the various US national debt clocks that litter the web offer varying totals. The one above, from Oddhammer, provides one of the more conservative totals to what is formally called The National Public Debt Outstanding.
Correction: China’s exports did not spike in December
Investors cheered earlier this month when it emerged Chinese exports rose for the first time in 14 months last December (and by 17.7 per cent year on year no less).
Unfortunately for the bulls, Standard Chartered’s Stephen Green on Wednesday poured cold water over the notion that the figures confirm a global recovery is under way.
Kradbury – a ‘bad deal’
Remember those conspiracy theories about Warren Buffett being in league with Kraft to drive down the Cadbury share price?
They always seemed somewhat far fetched – and guess what? They were.
Buffett’s threat to vote against the deal was real enough.
What really drove Chinese commodity imports?
Remember how China was importing every commodity under the sun last year – quite inexplicably, considering exports were lagging throughout most of the period?
Sean Corrigan at Diapason Commodities has a theory to explain the phenomenon.
US commercial real estate in good news shock
US commercial real estate prices, as measured by Moody’s, increased by 1 per cent in November. This is the first such increase in more than a year, according to the rating agency’s REAL Commercial Property Price Indices.
Spot the odd one out
Related links:
Good banks, bad banks – FT Alphaville
Banks’ coverage ratio capers cont. – FT Alphaville
Great Depression-esque bad debt at banks – FT Alphaville
Wells Fargo beats with Q4 net income of $2.8bn
Wells Fargo announced record full-year earnings on Wednesday on revenues of $22.7bn in the fourth quarter.
Net income for the group came in at $2.8bn or $0.08 per share versus analyst expectations the bank would lose one penny per share on revenue of $21.97bn.
Morgan Stanley posts Q4 earnings of $0.14 a share
Another bank result, this time from Morgan Stanley, now the second major US bank to report a(n albeit lower-than-expected) profit so far this fourth-quarter earnings season.
Analysts expected the Morgan Stanley to post earnings of 36 cents a share on revenue of about $7.8bn,
Lunch Wrap
On FT Alphaville Wednesday morning,
- BofA posts Q4 loss of $0.60 a share, net loss of $194m.
- Missing from the MPC minutes.
- China property bubble: Real or imaginary?
- Junk-bond junkies party on…
- Digging deeper into the CFTC’s position limits.
BofA posts Q4 loss of $0.60 a share, net loss of $194m
Third on the list of big US banks to report fourth-quarter earnings is Bank of America.
The bank had been expected to lose 52 cents a share on revenue of $26.84bn, but looks to have missed those expectations,
Junk-bond junkies party on…
Junk (bonds, that is) are back in fashion, as Manchester Utd football club proved this week – and ShortView’s John Authers notes on Wednesday.
In the second week of this year, $11.7bn in high-yield offerings came to the market,
Dear EU, your invoice is in the post
A message from the Greek Finance Minister (via Reuters):
GREEK FINMIN SAYS STATS SERVICE WILL BE MADE FULLY INDEPENDENT, BILL SENT TO EU
Related links:
Greece condemned for falsifying data – FT
A
Markets Live transcript 20 Jan 2010
Markets Live chat transcript for the chat ending at 12:16 on 20 Jan 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHand welcome to Markets Live
Missing from the MPC minutes
Notably absent from Wednesday’s MPC minutes was any mention of the spread between gilt yields and Overnight Index Swap (OIS) rates.
The OIS is basically a proxy for the markets’ expectation of central bank rates.
China property bubble: Real or imaginary?
It really seems to be a case of who you want to believe.
The highly opinionated investor Jim Rogers waded into the debate over Hong Kong’s sizzling property prices to warn on Tuesday that values in Shanghai and Hong Kong may fall after being driven higher by speculative demand.
Digging deeper into the CFTC’s position limits
Energy analyst Olivier Jakob from Petromatrix has crunched through the CFTC’s proposals on position limits released last week.
His findings are worth flagging up because they differ to the consensus view that the proposals,
A still slacking MPC
It is clear that inflation is likely to pick up markedly in the first half of this year, a message reinforced by this morning’s news that CPI inflation reached 2.9% in 10 December. The continuing pass-through of the earlier significant depreciation of sterling,
[Modern Football Finance] Penalties
As titles go it’s a bit unwieldy. But this piercing piece of analysis, by a City fund manager and member of the Manchester United Supporters Trust, is creating something of buzz in the blogosphere:
ANALYSIS OF THE GLAZER BOND DOCUMENTS SHOWS MANCHESTER UNITED WILL HAEMORRHAGE OVER HALF A BILLION £ IN CASH IN THE NEXT SEVEN YEARS.