February, 2010
Oh yes they will… oh no they won’t!
The Dow was up on Tuesday afternoon:
And apparently the pick-me-up had something to do with flashes like these out of Reuters:
RTRS-BILATERAL AID FOR GREECE AND MEASURES AGREED AT EUROPEAN LEVEL ARE BEING CONSIDERED-GERMAN NEWSPAPER
RTRS-GERMAN FIN MINISTER TO INFORM SENIOR GERMAN CONSERVATIVES ON GREECE AID DETAILS ON WEDS-GERMAN PAPER
Except that in the meantime:
The next leg of the great bear market has begun…
. . . so says Bob Janjuah, chief strategist at RBS, who is convinced — now more than ever — that the policy-sponsored excess liquidity-enabled buy fest is over.
I now think we have begun the 3rd and final leg of the multi-yr bear mrkt which began in 2007 and which SHOULD,
Goldman’s Trojan currency swap
A curious game of Maastricht criteria hide-and-seek
The Spiegel is reporting that Goldman Sachs helped Greece cover up part of its whopping deficit. The deal was reportedly done via a currency swap,
Bolton on tour
Click to enlarge:
Those are the planned movements of Anthony Bolton over the next couple of weeks, as the star fund manager looks to raise £630m for his new venture in China.
Fidelity China Special Situations will be a closed-ended investment company that will be listed on the LSE in mid-April if all goes to plan.
<<"Tres hedge funds con más de 500.000 millones bajo gestión son los responsables del ataque a España">>
Okay, we don’t think this needs to be put through the Google Translator.
Reportedly, Moore Capital, Brevan Howard and Paulson & C0 are behind the “murky maneuvers” that have seen Spanish CDS and bond yields blow out.
Does Europe need a carbon central bank?
The annual Lord Mayor’s City Debate took place in London’s Mansion House on Monday evening, with FT Alphaville in attendance. (Many thanks to the Chicago Mercantile Exchange for the invitation.)
The motion put forward to financiers:
Nowotny talks contagion, exit strategies and all things peripheral with FT Alpha
European Central Bank (ECB) governing council member, Ewald Nowotny , sat down with FT Alphaville to talk Greece, exit strategies, speculation and contagion in the eurozone.
In addition to being an ECB member,
Australia ends bank deposit guarantees
While Europe stresses about a potential Greek meltdown and contagion crisis, things are looking pretty good from the perspective of Down Under.
Fresh from its surprise decision to hold interest rates last week,
The USO says it is innocent
United States Commodity Funds, the group behind the USO and UNG exchange traded funds, is keenly protesting its innocence regarding the group’s possible connection with volatile energy market moves in 2008,
Lunch Wrap
On FT Alphaville on Tuesday morning,
- Post QE gilt (auction).
- Banks, insurers and sovereign debt.
- CIC takes on the world.
- JGB update: Is Japan the next Greece?
- The cost of eurozone disunion is 55bps,
Markets Live transcript 9 Feb 2010
Markets Live chat transcript for the chat ending at 12:15 on 9 Feb 2010. Participants in this chat were: Neil Hume, FT Bryce Elder Izabella Kaminska, FT NHRight welcome to ML etc NHBryce is here with me
Post QE gilt (auction)
UK DEBT MANAGEMENT OFFICE SAYS GETS 2.08 COVER AT 2 BLN STG SALE OF 4.5 PCT SEPT 2034 GILT
UK DMO GETS 0.3 BASIS POINT YIELD TAIL AT SEPT 2034 GILT AUCTION
UK DMO GETS 5 TICK PRICE TAIL AT SEPT 2034 GILT AUCTION
The results,
CIC takes on the world
After a low-key year, China Investment Corporation really has come back out swinging. After last week’s news of its nifty deal with Apax Partners in Europe, a (US) SEC filing by the Chinese sovereign wealth fund gives an intriguing glimpse into how it is using exchange-traded funds to take positions on sectors ranging from healthcare to consumer services and gold.
JGB update: Is Japan the next Greece?
Is Japan, mired in debt and deflation, the next Greece?, asks the FT in an attention-grabbing line of an editorial comment on Tuesday.
After all even Shizuka Kamei, the country’s financial services minister,
The cost of eurozone disunion is 55bps, Deutsche says
Here’s a CDS curio for you to ponder this Tuesday.
The analysts on Deutsche Bank’s fixed income team have done some number-crunching/modeling and come up with some interesting perspectives on how eurozone CDS stacks up against the US and UK.
Euro rise *alert*
We posted a dollar rise *alert* at the beginning of November based on some contrarian thinking in the market at the time.
And the contrarians did not do a bad job of calling the bottom in the dollar rout:
Défãult rísk
The European contagion effect starkly illustrated below:
That’s Portugal’s sovereign CDS curve and it has inverted — indicating that the market now believes there’s a higher probability of a default in the short-term than in the longer term.
Further reading
Elsewhere on Tuesday,
- The shadow banks.
- AIG is to Goldman as Greece is to. . .
- “Teach the speculators a lesson.”
- Alan Greenspan fights back.
- Help compile a Morphology of the Sin of bad commercial real estate lending.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Michael Skapinker: Saving a company’s soul
Stand up if you hate Manchester United.” This tribal cry from the football club’s enemies doesn’t stir me.
Snap news
Breaking pre-market news on Tuesday,
- UBS reports Q4 net profit of CHF1.205bn – statement.
- Swedbank posts Q4 operating loss but says 2010 profit feasible – statement.
- BSkyB places 10.4 per cent ITV stake for £196m – statement.
Feinberg on Blankfein: fail (maybe)
Here’s US pay czar Kenneth Feinberg, talking about Lloyd Blankfein’s $9m pay packet to Betty Liu on Bloomberg TV.
Yes, he thinks it’s excessive, but he’s cheered by the fact the package is made up of a very low base salary and long-term stock.
[South Africa 2010] The World Cup pairs trade (ex-Spain)
New research published by the Paris-based equity strategy team at Societe Generale suggests the common assumption that the (non-American) football World Cup has a positive economic impact on the host and winner countries is actually false.
China’s metropoli bubble fear
We believe that we now have a bubble in many cities, particularly the big ones. The central government is trying to deflate these bubbles gently, rather than pop them. The fact that prices have been at these levels before suggests this can be accomplished,
Quote du jour, G7 ostrich edition
“The G7 countries are completely asleep at the wheel. I looked at the information they put out from their meeting I was absolutely shocked … they seem to show no awareness at all that much of Europe is facing a serious crisis and it’s not limited to Spain,
“Nada de lo que está ocurriendo en el mundo, incluidos los editoriales de periódicos extranjeros, es casual o inocente”
Spain is the victim of an international conspiracy focused on destroying the country’s economic standing and via that the euro.
That’s the plain and simple view of the Spanish government, or at least its Development minister,
TrimTabs vs the Bureau of Labor Statistics (Round 2)
Last Friday’s non-farm payroll numbers provided the market with the Bureau of Labor Statistics’ seasonally-adjusted revisions.
For US investment research firm TrimTabs, which publishes its own competing jobs estimates,
Spanish government cuts net debt issuance
Flashes out of Reuters on Monday suggest the Spanish Treasury has decided to cut the amount of money it will raise from the bond markets this year by 34 per cent:
RTRS-SPANISH TREASURY SAYS TO RAISE NET 76.8 BLN EUROS FROM MARKETS IN 2010,
Lunch wrap
On FT Alphaville on Monday morning,
- Abbey, Bungle and Leicester.
- Some surprisingly disappointing global metrics.
- More bonus neurosis: Thain and how times have changed.
- A different government view on CMBS.
Some surprisingly disappointing global metrics
UBS produces a nifty global economic surprise series, which tracks the frequency at which global statistics beat or miss consensus expectations.
The more times the figures beat, the better the momentum.