March, 2010
CDS report: European (dis)Union
British europhobes love to portray the European Union as an evil bureaucracy, intent on creating a voracious super-state. There is no denying the club has expanded in recent years. The total membership is now 27 countries and,
Worthless
The above chart shows the price action in Palm after Peter Misek of Canaccord Adams said shares in the market of the Pre smart phone maker were worthless:
Due to Palm’s lack of earnings visibility,
Econo-spats, Stephen Roach v Paul Krugman edition
It’s become increasingly clear that economists are fractious creatures.
Recent spats include Niall Ferguson v Martin Wolf via Paul Krugman and the legendary dispute between Joseph Stiglitz and Kenneth Rogoff.
Brinkmanship, Greek style
Ah, George Papandreou: FT Alphaville is starting to see method to your madness.
Greece’s prime minister continued his formidable run of attention-grabbing statements on Friday with a belter delivered to Greece’s main private trade union.
Kim Jong-il has no patience for botched financial reform
Treasury secretaries and finance ministers around the world ought to thank their lucky stars they didn’t have to defend their handling of the global financial crisis to someone like, say, Kim Jong-il.
Consider the following report by the New York Times on Thursday:
PT ≠ MV?
Oh dear. Fed tightening talk abounds and yet there’s still no evidence that all that extra liquidity has got into the system.
Note the latest M-1 multiplier data from the Federal Reserve, which continues to show a deterioration in the velocity of money (H/T Themis Trading’s Joe Saluzzi):
Lord Myners believes in dour Scotsmen
Want to ensure that your bank is well-managed? Then appoint a cynical Scotsman to its audit committee.
Such was the advice proffered, in apparent seriousness, by the UK’s City Minister Paul Myners to a commission on the future of banking.
Markets Live transcript 19 Mar 2010
Markets Live chat transcript for the chat ending at 12:14 on 19 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHwe have opened for business
Pricing risk redux
Alternate title: Irrational exuberance – the sequel.
Former Federal Reserve chairman Alan Greenspan is offering his explanation of the financial meltdown in a paper to be presented at the Brookings Institute on Friday.
The central oil bank of Saudi Arabia
Opec’s March meeting came and went this week, with hardly a bat of an eyelid from the global marketplace.
The oil ministers, who met in Vienna, opted to keep output targets unchanged on the presumption demand should pick up later in the year,
Greenspan says, je regrette quelque chose
The Crisis, by Alan Greenspan.
It sounds like an airport novel. But the 66-page paper is the closest we’ve ever gotten to a mea culpa from the former Fed chief, who chaired the US central bank in the midst of a growing housing bubble.
Back in (the) black at Lloyds
Shareholders in Lloyds Banking Group received a positive surprise on Friday morning.
The partly state-owned bank a released a statement guiding that it will be profitable at the underlying combined business level in 2010:
Moving mountains, rebuilding markets
The ABCP Matterhorn is getting taller.
Or, developing a gorge on its right-hand side.
Spotted by Alea — an update on the amount of asset-backed commercial paper outstanding:
The last time FT Alphaville presented that chart,
Further reading
Elsewhere on Friday,
- When emerging markets emerge.
- Tinker, tailor, soldier, hedge fund manager.
- Avoid Irish banking’s example, America.
- More on how to shut banks down properly.
- The European case for banning naked CDS,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Analysis: Accounting – fooled again
Lehman’s use of ‘Repo 105′ and other similar deals came to light last week in a 2,200-page report by Anton Valukas,
Say thank you to MiFID
You can thank MiFID for this (click to enlarge):
This retail FX operation, FxPro, purports to offer its clients 500/1 leverage. So if you put up $2k you can trade $1m – just like a professional.
When it sounds too good to be true…
The latest fraud allegations from the SEC, emphasis ours:
19. These joint venture agreements represented that Global Holdings would utilize those funds “for the purpose of buying and selling Standard and Poor’s AAA or AA rated bonds and/or Medium Term Notes” on an “overseas trading platform.”
20.
Wasteful, useless (UK) regulation, Part 93
It’s almost as if Hector Sants got a box set of The Wire for his birthday, thought that guy McNulty looked a bit like him (in his younger days) , and then this Galleon stuff came up and now…
March 18 (Bloomberg) — Traders’ mobile-telephone calls may be taped in an effort to stamp out insider trading,
Retail FX hustlers await their fate
On Monday, the CFTC will issue its decision on leverage caps in the forex punting business. It’s a make or break moment for all those firms that offer margin trading to those wanting to play currency pairs.
Police arrest Anglo Irish Bank’s former chairman, Reuters says
More bad news for Anglo Irish Bank, via Reuters on Thursday:
Irish police have arrested Sean FitzPatrick, the former chairman of Anglo Irish Bank, as part of a fraud investigation seen as vital to Ireland’s efforts to win back investor confidence.
FT Alphaville’s Greekbailout-o-meter says…
Ah-ugh! (click for sound effect.)
An unnerving glitch appears to have sprung up in FT Alphaville’s newly-launched Greekbailout-0-meter.
Thursday’s reading below read decidedly upwards towards ‘IMF,
CDS report: Greece is back (did it ever go away?)
Greece returned to the agenda today, disturbing the calm that had enveloped the markets this week. The Markit iTraxx SovX Western Europe index blew out to 74bp, 6bp wider than yesterday’s close and its widest level since the beginning of the month.
Euro *alert*
Here’s a chart of the USD/EUR price action on Thursday afternoon:
Traders say the Euro’s move lower was linked to speculation the Federal Reserve is about to raise the discount rate again.
This would be slightly surprising coming so soon after the FOMC meeting,
Would you trust this man with $35.5bn?
We certainly have some reservations about Tidjane Thiam, based on the following report from Reuters:
PRUDENTIAL PLC <PRU.L> – CHIEF EXECUTIVE TIDJANE THIAM WILL NOT BE TAKING UP THE OFFER TO JOIN THE BOARD OF SOCIÉTÉ GÉNÉRALE
That’s right,
Quote du jour, Greek huff edition
From Greek Prime Minister George Papandreou on Thursday, via Reuters:
GREEK PM SAYS WE WILL NOT ASK FOR FINANCIAL HELP FROM EU OR IMF
Or rather: “Fine then! We’ll just do it ourselves.”
Related links:
Warren Rose, or Axl Buffett?
Presented without comment, because we are speechless, is the following video of the Sage of Omaha as Guns N’ Roses rocker Axl Rose:
What’s the connection between Buffett and a talking lizard, you might ask? Buffett’s Berkshire Hathaway owns Geico.
A little Credit Suisse FX mystery…
The name Alain Delelis was being pinged around forex dealing desks on Thursday.
He’s the head of FX for the Americas at Credit Suisse.
Correction: he was head of FX for the Americas at Credit Suisse. A CS spokesman in New York confirmed that Mr Delelis has given up his management responsibilities,