March, 2010
Is the private label securitization market about to make a comeback?
We’ll have to see this to believe it, but the Wall Street Journal reported on Wednesday that Redwood Trust is hoping to launch a $200m RMBS deal.
Redwood, in its own words, is “a financial institution focused on investing in,
Banking bubble (charts)
Warning: this post contains a bubble chart.
Citi’s European banks research team has come up with a fresh take on earnings and valuation bubbles across major markets.
Analysts led by Ronit Ghose compared the market value of banks to the size of the economies in which they are based – a measure dubbed ”penetration”.
CDS report: All on Good Friday
European credit markets were devoid of momentum today as the upcoming Easter holiday and the impending US jobs report on Friday led to inertia. Investors received an inkling of what to expect from the NFP on Friday,
Overheard in the Long Room
The members of FT Alphaville’s private forum, the Long Room, enjoy (and regularly engage in) spirited debate. Here’s a selection of what’s been said and posted just recently:
- Moorad Choudhry argues that it’s going to be a hard year for optimists.
The Dodd bill has an is-ought problem
A what-ought problem? An is-ought problem.
Senator Chris Dodd’s gigantic financial reform bill is starting to attract a bit of nerd rage for giving regulators power to regulate — but not the requirement to use it.
Is Henry Kissinger helping Rio Tinto in China?
Yes, you’ve read that right — Henry Kissinger.
Rio Tinto has had rather a bad patch in Beijing, especially since four Rio executives were recently jailed for bribery, but it’s a surprise to see the controversial former US Secretary of State named in connection with company.
The pirate business model
We missed this earlier in the month, but it’s definitely worth ‘flagging up’ to readers as it was being pinged around Citi emails on Wednesday.
UN Dispatch, a site dedicated to providing commentary and coverage on the UN and UN-related issues,
Markets Live transcript 31 Mar 2010
Markets Live chat transcript for the chat ending at 12:11 on 31 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHSurprise NHWe are early NHIt’s 11.02
The eurozone’s gone double-digit on unemployment
As Reuters reported on Wednesday:
The euro zone’s 10 percent jobless rate in February was the highest since August 1998 and in line with market expectations. A month earlier unemployment was at 9.9 percent.
[Ireland's Bad Bank] The morning after…
. . . After Ireland’s new bad bank rolled out swingeing haircuts on Tuesday for the troubled loans Allied Irish Bank and Bank of Ireland want to offload on to it, that is.
And after financial regulators added tough new capital requirements for both banks.
The Sky has not fallen in
Ofcom has published the conclusions of its Pay-TV review on Wednesday morning and the headline news is that BSkyB must offer Sky Sports 1 and 2 to its rivals at a price determined by the regulator.
Wholesaling Sky Sports 1 and 2:
IMF squabbles, Polish edition
A bitter row is developing in Poland between the Polish Central Bank (NBP) and the Polish Finance Ministry regarding the country’s use of its $20.5bn IMF credit line.
While an apparently cautious finance ministry believes Poland should extend the facility because,
Around the world in three Libor rates
Here’s a whole heap of Libor fixings for you.
To begin with, the 3-month euro London Interbank Offered Rate, or the cost for banks to borrow money over three months in the eurozone currency, which fell to a record low of 0.58 per cent on Tuesday:
Key man risk, defined
Ever wondered what it might look like?
Here’s the answer:
Since Gartmore announced Guillaume Rambourg, one of its star fund managers, had been suspended on Tuesday afternoon the share price of the fund management group has fallen almost 45 per cent,
Greek debt – spreading like it’s 1999
Plus ça change — but in Greek.
It looks like Hellenic Republic bond spreads over German bunds are back at 1999 levels — when Greece first attempted to join the eurozone but failed because it didn’t meet the required economic criteria.
The terrorist model for banks
Al-Qaeda. IBM. Power grids. Dominoes. Pollution. Facebook friends.
These are just some of the subjects Andrew Haldane, the Bank of England’s executive director of financial stability, manages to touch upon in his highly-readable effort to answer `The $100 Billion Question’ — $100bn being one estimate for the cost of the most recent banking crisis in the US.
Further reading
Elsewhere on Wednesday,
- In defence of bubbles.
- New US liquidity risk guidelines: fail.
- Quantitative investing: some soul-searching.
- Has Greece shot itself in the foot on CDS?
- The big UK GDP story you missed.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why Germany cannot be a model for the eurozone
I am aware of the commitment of Europe’s elite to the success of the European project,
Snap news
Breaking pre-market news on Wednesday,
- BSkyB to challenge Ofcom ruling on Pay TV market – statement, statement and report.
- Bank of Ireland says preparing rights issue and publishes results – statement and statement.
CDS report: When Irish Eyes Are On NAMA
“When Irish Eyes Are Smiling, sure ’tis like a morn in spring.” is the first line of the one of the most famous tribute songs to Ireland. While it is spring now, Irish eyes are not likely smiling as all eyes were on the NAMA and Lenihan announcements.
US 7-year swap spread turns negative
FT Alphaville has written about the (new) negative territory being experienced in US government swap spreads – the 10-year government swap, to be precise.
On Tuesday, however, that spiral descended further,
Bond insurer blow-up fallout, Las Vegas Monorail edition
Some excellent reporting from Bloomberg on the side effects of Ambac’s part-seizure by its regulator – and for once, for the story has nothing to do with credit default swaps.
Here’s Bloomberg:
March 29 (Bloomberg) — Holders of bonds sold by the Las Vegas Monorail Co.
[Ireland's Bad Bank] Haircut, sir?
Ireland’s National Asset Management Agency (NAMA) on Tuesday announced the haircuts it will impose on toxic loans submitted to it by Irish banks, including Allied Irish Bank and Bank of Ireland.
Too large a haircut would leave either bank with a capital-raising dilemma,
Doubts over Deutsche and Deloitte’s derivatives dealings
Employees of Deutsche Bank, Deloitte Touche Tohmatsu and Banca Italease may face charges in Milan related to an ongoing investigation into derivative sales, Bloomberg reported on Tuesday.
From the news wire: