March, 2010
CDS report: The natural order restored?
Markit’s Gavan Nolan wrote this CDS report
The sovereign CDS market was the driving force behind the credit market rally today, with a combination of technical and fundamental factors helping spreads to tighten.
Congratulations Tidjane Thiam…
… you’ve put Prudential into play!
That’s right, Pru has had a fifth, or £3bn, knocked off its market value since Thiam unveiled the ‘transformational’ acquisition of AIG’s Asian operations on Monday.
Those Bove-rred banks
What’s this? A sort-of-downbeat bank note from Rochdale Securities analyst Richard X Bove?
Using fourth-quarter data from FDIC, Richard ‘I ♥ banks’ Bove, has put together a presentation on banks’ asset quality.
[Modern Football Finance] Results day
MU Finance, part of the complex web of vehicles that control Manchester United, has filed results for the second quarter of 2009 and…
…there’s nothing too surprising in the figures, which is to be expected given that it’s been barely a month since the MU Finance launched its controversial £500m bond issue.
Hail CESR, short sellers!
They came. They saw. And they’re out to conquer European short selling.
The headline of a Committee of European Securities Regulators press release, Tuesday afternoon:
CESR recommends the European Institutions introduce a pan-European short selling disclosure regime
In Eurospeak,
Soros and the bullion bubble
Gold is rallying — but is it all because of one man’s lack of faith in the euro?
As Bloomberg reported on Monday:
George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc.,
On the non-existent basis of a (Greek) CDS ban
Naked CDS has already been discussed once on FT Alphaville on Tuesday morning.
But Citigroup analysts, led by Michael Hampden-Turner, have also issued a riposte to the idea that CDS — naked or otherwise — should be banned to alleviate pressure on certain sovereigns.
Lunch Wrap
On FT Alphaville Tuesday morning,
- The benefits of naked CDS.
- Subprime short, from the beginning.
- Spain’s ICO gets risky.
- The Great British Krona flatlines.
- Sterling: crisis or deflation? You choose.
Subprime short, from the beginning
Go here for the superb tale of a Milton Friedman-reading , subprime-shorting, one-eyed hedge fund manager, as excerpted by Vanity Fair.
Michael Burry, one of the subjects of Liar’s Poker-playing Michael Lewis’ new book,
Markets Live transcript 2 Mar 2010
Markets Live chat transcript for the chat ending at 12:18 on 2 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHand welcome to Markets Live
Prudential – Day II
Oh dear. This wasn’t in the script.
Prudential’s share price on Tuesday morning:
That takes the share price decline since the “transformational” deal to buy AIG’s Asian assets was announced on Monday morning,
The benefits of naked CDS
I think that derivative products… the CDS on sovereign debt have to be at least very, very regulated, rigorously regulated, limited or banned, this is a personal position on financial instruments
- Christine Lagarde,
Is that a book you’re talking, Anatole?
Anatole Kaletsky’s macro column in The Times is an excellent read, week in week out. The prose is crisp and the opinions are clear. Readers know where Anatole stands.
Witness his recent comments on Greece and tensions within the eurozone:
Further reading
Elsewhere on Tuesday,
- Four thoughts about the return of Merger Monday.
- Cat-fighting Lehman wives.
- Old Warren’s still got it.
- How Goldman bagged clients.
- A 200-year-old gold chart.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Willem Buiter: Britain’s lack of credibility hurts sterling
There are good reasons for the weakness and volatility of sterling, writes Citigroup chief economist Buiter.
Snap news
Breaking pre-market news on Tuesday,
- Mike Ashley’s Sports Direct is considering bid for Blacks Leisure – statement and statement.
- AIB reports FY operating loss of €2.4bn – statement.
- Lyondell said to reject $14.5bn Reliance bid – Bloomberg.
Goldman’s new risk factor: bad press
Spotted by the eagle-eyed Michelle Leder (of footnoted.org fame), writing for the NYT’s Dealbook site.
From Goldman Sachs’ 10-k, Item 1A, Risk Factors:
We may be adversely affected by increased governmental and regulatory scrutiny or negative publicity.
‘Talk of a GBP crisis seems like hysterical claptrap’
David Bloom, Global Head of FX Research for HSBC, is none-too-impressed with suggestions the Great British Currency is more krona than sterling.
Here’s his short but scathing note on the matter:
GBP crisis:
CDS report: SovX and Main converge
Markit’s Gavan Nolan wrote this CDS report
Financial markets started the month on a strong note, with both credit and equity extending Friday’s rally. The Markit iTraxx Europe was about 2bp tighter at 83.5bp,
Dimon: We’ve hedged Greece. But California…
The attention of the world’s media has shifted in recent months toward Greece — small European country, population 11m, ‘difficult’ economic situation — and away from California.
Remember California? The US state,
What’s Chinese for “Unfounded IMF gold rumours”?
毫无根据的谣言，国际货币基金组织的黄金, apparently. But best not trust our sourcing on that: FT Alphaville’s Mandarin is a little rusty.
As for renewed rumours that China is planning to buy up all 191.3 tonnes of the latest International Monetary Fund gold sale – well,
Meddling Mandy – the details
We mused last week on what suggested reforms the First Secretary of State for Business, Innovation and Skills might have made to the UK’s Takeover Panel.
And now we know, thanks to a speech the The Rt Hon Lord Mandelson has delivered at Mansion House in the City.
FSA: ‘Trebles all round!’
The UK’s Financial Services Authority has published a new penalties policy under which fines for financial misbehaviour could increase three-fold.
There are three key elements to this, with fines based on:
Is Goldman’s luck about to change?
It’s that time in the quarter when we get to see how successful Goldman Sachs has been at making money.
Without further ado then, here’s the 10-k chart that shows the frequency distribution of daily trading net revenues for the year ended December 2009:
Fee bonanza
From Reuters:
PRUDENTIAL TO PAY UP TO $735m IN FEES FOR ITS $21BN RIGHTS ISSUE – SOURCES
And the underwriters are: Credit Suisse, HSBC and JP Morgan Cazenove.
According to Reuters that breaks down as a charge of 3 per cent,
Sharia compliant hedging is finally, actually here
An interesting and unexpected email landed in the FT Alphaville inbox on Monday: ‘IIFM and ISDA Launch Tahawwut (Hedging) Master Agreement.’
This is an important — and long awaited — development in both the OTC derivatives market and Islamic finance more broadly.
Fannie Mae’s insatiable appetite for bailout cash
It is rare that FT Alphaville agrees with a Wall Street Journal op/ed.
But in case of Fannie Mae, the WSJ’s characterisation of the government sponsored entity and its executives is spot on:
It was another impressive three months at Fannie Mae,