March, 2010
Relax, Goldmanites – not everyone is out to get you
FT Alphaville was amused by the following, spot-on tweet by “Fake Lucas van Praag” on Thursday:
Ahem. Goldman is on Fortune’s list of Most Admired Companies. Print is not dead! It serves at the pleasure of Lucas.
More good news on corporate default rates
We wondered whether corporate defaults had peaked towards the end of last year after Moody’s reported the first decrease in the speculative-grade default rate since January 2008, down from 12.9 per cent in November to 12.5 per cent in December.
So, did ‘America’s prophet’ see the SEC coming?
Where to start?
The SEC on Thursday filed a civil action against one Sean David Morton, a.k.a. “America’s Prophet! A modern day Nostradamus with more hits than Barry Bonds and the Russian Mafia!”
Morgan,
Niche demographic or interest group? There’s a Ponzi for that.
Bernard Madoff targeted wealthy Jewish communities in New York’s Upper West Side and Florida’s Palm Beach, Boca Raton and Fort Lauderdale. Elsewhere in South Florida, Scott Rothstein targeted hedge funds and money managers for the (formerly) high net worth.
Releasing the renminbi for Asia
Nomura has an ambitious big-think analysis paper out on getting Asia’s strident recovery through the medium term, particularly via capital markets reform. Check the Long Room for the full report, by John Lllewellyn and Lavinia Santovetti.
Greek crisis averted. Markets move on…
It came at a cost, but it worked.
On Thursday, Greece returned to the bond market with the successful placing of a 10-year benchmark issue which — shock, horror — even managed to attract foreign investors in sizeable sums.
CDS report: A turning point?
Spreads were little changed today ahead of tomorrow’s US jobs report. The Markit iTraxx Europe index was trading around 80bp, about 0.5bp wider than yesterday’s close. The Markit iTraxx HiVol was about 1bp wider at 121bp,
Rosenberg, damned
From Thursday’s Breakfast with Dave from Gluskin Sheff’s chief economist David Rosenberg:
DAMNED IF YOU DO …
We were told at a dinner last night with some clients and prospects that yours truly is far too bearish and that whatever good news there is out there goes under-reported.
For less than the cost of a ski chalet in Aspen…
… you too could be the proud owner of one of these:
We bring this to your attention because German politicians appear to believe the sale of Greek islands would be a valid way for the Hellenic Republic to raise revenues to help plug its fiscal shortfall.
The end of the $-funded carry trade?
We ask the question because the 3-month Yen Libor rate has fixed below the US 3-month rate for the first time since August 2009 .
So, while the dollar rate hovers around 0.25 basis points waiting for the Federal Reserve to lift interest rates,
“I urge you not to become a US bailout nation”
Outstanding.
Vince ‘I would like to recall the earlier press release’ Stanzione hasn’t just got something to say about sterling. The self-styled ‘controversial trader and investment coach’ has also got some advice for the German chancellor,
Morgan Stanley mulls ‘debtflation’
That, by the way, is the idea that countries can inflate their way out of indebtedness.
Morgan’s Global Economics Team, headed up by Joachim Fels, Manoj Pradhan and Sypros Andreopoulos, has made the case for “soft default”
Threadneedle tumbleweed
No change there, then. The Bank of England’s latest Monetary Policy Committee meeting has kept the bank rate at 0.5 per cent, and announced that there will be no increase to its £200bn policy of quantitative easing.
Lunch Wrap
On FT Alphaville Thursday morning,
- Greece squeezes out a bond issue…
- … and Spain also comes to market.
- A sovereign vulnerability shortcard.
- UK housing drop: was it the weather?
- Japan moves toward FX intervention.
With regional Fed presidents like these…
So now the Dallas Fed chief has weighed in, calling for the break-up of banks that are – you guessed it, “too big to fail”.
But as Baseline Scenario notes on Wednesday, it is the hawkish Thomas Hoenig,
UK housing drop: was it the weather?
More UK housing data just in and it leaves us wondering — was it the weather?
House prices as tracked by the Halifax fell 1.5 per cent for the month of February, putting an end to seven consecutive months of house price rises.
China’s speculative lending déjà vu
Chinese equities fell sharply overnight.
One factor was speculation of a clampdown on loans from financial institutions flowing into the stock market. According to the rumour mill, Premier Wen Jiabao has signed ‘documents’ that would allow regulators to impose severe punishments on loans from banks flowing into the stock market.
Markets Live transcript 4 Mar 2010
Markets Live chat transcript for the chat ending at 12:13 on 4 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHand welcome to Markets Live
Is Japan preparing to intervene?
Japan on Thursday took the unexpected path of raising its borrowing limit for foreign exchange intervention — the first time in six years, according to Reuters.
Some reports interpreted the move as a signal the country might be unhappy with the current strength of the yen.
and Spain follows…
Olé.
RTRS-SPAIN SAYS SELLS 4.5 BLN EUROS OF NEW FIVE-YR BENCHMARK BOND VS EXPECTED 3.5-4.5 BLN
RTRS-SPAIN SAYS 2015 BOND YIELD 2.842 PCT
RTRS-SPAIN SAYS 2015 BOND BID-TO-COVER RATIO 1.5
And here is some context,
Greece comes to market [updated]
Fresh off the wires – books opened Thursday morning on a 10-year Greek bond issue. Via Reuters:
RTRS-GREECE ANNOUNCES 10 YEAR BOND-LEAD
RTRS-GREECE 10-YEAR PRICE GUIDANCE MID SWAPS PLUS 310 BASIS POINTS AREA
RTRS-GREECE 10-YEAR MANDATED TO BARCAP,
A sovereign vulnerability scorecard
From Andrew Garthwaite and his team at Credit Suisse, a scorecard of OECD countries most likely to face government debt funding problems.
Click to enlarge:
So, Greece, Ireland, Spain and the UK are seen as the most vulnerable – but what about the US,
Short-selling disclosure: the devil’s in the details
Funny. The Ides of March isn’t until the 15th, but it looks like everyone’s out to get CESR.
The Committee of European Securities Regulators has already drawn fire for its short-selling disclosure proposals,
Further reading
Elsewhere on Thursday,
- Your complete 60-second guide to the Chinese property market.
- Sovereign CDS: you can’t blame the mirror for your ugly face.
- The Big Short.
-The ‘general glut’ of Thomas Robert Malthus.
Pink Picks
Comment, analysis and other offerings from Thursday’s FT,
Robert Skidelsky and Marcus Miller: Do not rush to switch off the life support
The fragility of the British economy in face of the Great Recession demands a rethinking not just of macroeconomic policy,
Snap news
Breaking pre-market news on Thursday,
Petrofac announces demerger of its North Sea oil assets – statement.
- VT Group drops bid for Mouchel – statement.
- Delta recommends 185p a share cash offer from Valmont Industries – statement.
Some flesh on Volcker’s bones
So, the New York Post got this one wrong: the Volcker rule is not, in fact, going to be replaced by a simple requirement that banks hold more capital.
No matter. On Wednesday the White House sent fresh details on the proposed rule,
The “Eddie Murphy” rule
Paul Volcker step aside.
The CFTC’s latest trading ruling will be named “Eddie Murphy” in homage to the actor’s famous role in the film “Trading Places”.
Which is apt, because the rule is not about proprietary trading at all,
CDS report: Greece’s convincing austerity
Markit’s Gavan Nolan wrote this CDS report
European credit markets rallied today, supported by growing optimism about the Greek situation and robust economic data . After a slow start the Markit iTraxx Europe index gained ground in the afternoon,