March, 2010
On that ‘extended period’ of low interest rates
Here’s a bit of datapoint-diversion, post the Federal Open Market Committee’s Tuesday reiteration that US interest rates would remain low for an “extended period” given lingering weakness in the economy.
India sort of ♥ Glass-Steagall
And you thought the Volcker Rule was bad. The Indian government is reportedly considering forcing the country’s public sector banks to exit non-core businesses.
The thinking, circulated in a Finance Ministry proposal,
Further reading
Elsewhere on Wednesday,
- Post-Lehman repos leave a lingering smell.
- Revaluation won’t make China’s imbalances go away.
- Flight of the Bumblebee: or, Japan’s debts.
- Wagner’s Law applied to the US deficit: Götterdämmerung?.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: China and Germany unite to impose global deflation
You may have heard of Chimerica or Chindia, notes the FT columnist. Let me introduce you to Chermany,
Snap news
Breaking pre-market news on Wednesday,
- Unicredit Q4 profit falls 26 per cent to €371m, says to sell 2.84 per cent Generali stake – statement.
- EFG International 2009 net profit falls 54 per cent to CHF101.1m – statement.
What does the Dodd bill mean for commodities regulation?
If you were wondering how Senate Banking Committee chairman Chris Dodd’s proposed bill on financial regulation might affect commodity trading, John Kemp at Reuters has done much of the hard work for us.
Fed holds rates, maintains ‘extended period’ language
Here’s the FOMC statement in full:
Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing.
How do you say ‘bank bailout’ in Spanish?
Just in case you thought the financial crisis in the US of A was concentrated on the mainland, here’s some food for thought from Dow Jones (emphasis ours):
The Federal Deposit Insurance Corp. is seeking buyers for three banks in Puerto Rico,
Creative market manipulation
Okay, this is really sly. Let’s refer to the SEC’s specimen (alleged) heist to give a flavour…
16. AmeriServe Financial Inc. is a publicly traded, Johnstown, Pennsylvania based bank. The company’s shares are traded on the NASDAQ Global Market under the symbol ASRV.
Gensler on CDS regulation: many a mixed metaphor
CFTC Chairman Gary Gensler is no fan of derivatives in general, and credit default swaps in particular.
As he told attendees of a Markit conference on derivatives (via Risk magazine):
“I really do think CDSs directly contributed to the financial crisis of the past year-and-a-half,” commented Gensler,
‘German domination of Euroland is a disaster’
What is it, Trade Imbalance Tuesday? Half a world away from the RMB revaluation wars, analysts have jumped on a recent French attack on German exports as the debate over eurozone recovery grows.
We’re pleased to note that this particular spat kicked off in the FT’s august pages on Monday,
Lay off Citi
Citigroup were getting it in the neck on Tuesday over this, from Bloomberg:
Citigroup Inc., the bank 27 percent owned by the U.S., is bolstering a unit that trades stocks with the lender’s own money after a proposed government ban of proprietary trading helped spur eight of its 22 employees to defect,
Dick Fuld? Not a bad guy (and other contrarian takes on LEH)
While it was inevitable, FT Alphaville is nonetheless impressed at the speed with which the contrarian camp has come out in defence of Lehman Brothers, post Valukas.
First up, Chazzer “Crazy Like a Fox Business Anchor”
No, it’s true – everyone is shorting the euro
We cautioned a few weeks ago that a little perspective was probably needed when discussing the “everyone is shorting the euro” story.
The CFTC data on which the stories were based, we argued, only reflected of a small sliver of the OTC forex market.
China as currency manipulator: reality check, please
Ah, Yuan revaluation worriers: name-calling won’t win the argument for you. But sage advice from a certain investment bank just might.
Monday brought the sound and fury of a letter from 130 U.S. Representatives to the Treasury demanding that it brand China as a ‘currency manipulator’.
Markets Live transcript 16 Mar 2010
Markets Live chat transcript for the chat ending at 12:09 on 16 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHand welcome to Markets Live
Cashflow, Spanish banks and ECB support? (Updated & debunked)
Updated with Santander comment below.
We know cashflow doesn’t necessarily mean very much when it comes to banks, but as the figure was missed out in Santander’s unaudited full-year report issued last month,
The recovery cannot be sustained
Just when we were wondering what to write about, the latest Global Strategy Weekly from Albert Edwards lands.
The Soc Gen strategist has been poring over last week’s Flow of Funds report from the Federal Reserve…
Igor, Igor! It’s alive, it’s alive… it’s ALIVE!
…and Dicktor Fuldenstein’s monster will walk the earth once more. Or will it? We simply couldn’t resist giving you more details of the restructuring plan for Lehman Brothers — filed in New York late on Monday,
Interest rate shock
That’s something we’ve been hearing a lot about lately.
Deutsche Bank analysts had the thought but didn’t finish the sentence in a note on the Financial Services Authority’s Financial Risk Outlook and UK banks published last week:
Further reading
Elsewhere on Tuesday,
- In praise of dumb regulation.
- Paul Krugman’s protectionism: maximum pwnage.
- The mancession goes global.
- Nouriel predicts an anaemic recovery.
- European Monetary Fundonomics: once more unto the breach.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Bubble or not, China’s rise is real
Is China like the US in 1890? Or is it more like Japan in 1980? If the parallel with America is right,
Snap news
Breaking pre-market news on Tuesday,
- Deutsche Bank says CEO Josef Ackermann 2009 compensation was €9.55m – statement.
- BNP Paribas may acquire KBC Groep’s Japan unit – Bloomberg.
- Debenhams sees H1 profit ahead of prior year – statement.
Why Wall Street should have seen the Volcker rule coming
When the so-called Volcker Rule was proposed back in January, the market reaction ranged from wildly opposed to just as strongly in favour.
The one consistent emotion, as the FT pointed out at the time,
CDS report: All quiet on the sovereign front
European credit markets started the week on a low note, underperforming weak equity markets. The trend accelerated later in the session after the US markets opened down. The Markit iTraxx Europe index widened to 76.25bp,
Alleged Tarp fraud at The Park Avenue Bank [UPDATED]
Watch this space: at 1pm ET on Monday, Tarp overlord Neil Barofsky will discuss the arrest of one Charles J Antonucci Sr, the former president and chief executive of the (failed) Park Avenue Bank in New York.