May, 2010
An intermediation problem, not a liquidity problem
Talk about demand for the proverbial liquidity mop.
As FT Alphaville noted earlier, the ECB set out to sterilise up to €16.5bn of its bond purchases via the auction of one-week fixed-term deposits on Tuesday.
China’s commodities/property price nexus
A bleak view of China’s property prices/commodities nexus come from Stephen Wyatt, commodities commentator for the Australian Financial Review.
Wyatt argues that if Chinese policy makers “over-tighten”
A Greek refinancing interlude
Lest we forget, considering all the trouble it caused: Greece will use the first bit of its bailout, received on Tuesday, to pay back its €8.5bn bond maturing on 19 May.
As Reuters reports, the May maturity was a most ill-starred bond:
Is it really a commodity crash?
Barron’s on Tuesday called it “the crash you didn’t hear”.
They were referring to the sell-off in the Thomson Reuters/Jefferies CRB index, which dropped 2 per cent and hit a seven-month low on Monday,
The slow death of Hamp, the summer of delinquencies
The misfortunes of the US Treasury’s Hamp programme continue to make headlines.
On Monday, the department released its latest data for the Home Affordable Modification Plan. The April report showed that about 123,000 trial Hamp mortgage modifications were cancelled last month,
Greece gets the cash
At long last — Greece got the first tranche of its €110bn bailout:
Click for the full release.
Markets Live transcript 18 May 2010
Markets Live chat transcript for the chat ending at 11:27 on 18 May 2010. Participants in this chat were: Neil Hume, FT Tony Tassell NHgood morning NHand welcome to Markets Live
Dear George, about that inflation…
April inflation data for the UK is in, and it’s a bit of a bump on the head for the Bank of England: a 3.7 per cent rise in CPI year on year. From the Office of National Statistics release:
In the year to April,
China’s bright-ish future, according to CLSA
“The future looks bright, all right, but not that bright” — although China’s beacon is still very much shining, according to the Hong Kong-based broker CLSA on Tuesday.
The note summed up the opening day of CLSA’s 15th annual China Forum in Shanghai,
Crude futures may be really cheap
According to Reuters columnist and commodities guru John Kemp, some investors may be overlooking inflation when analysing WTI oil futures and the contracts’ respective forward curve.Posts
Which is ironic,
Yell and the curse of the rescue rights issue
Strange but true.
Until Prudential launched its record breaking £14.5bn fund raising on Monday, there had been no cash call from companies listed on London Stock Exchange in 2010.
However, the fallout from last year’s wave of rescue rights issues is still being felt.
[South Africa 2010] England to win World Cup, says JPM quant model
And we all know those are never wrong, right?
With the 2010 World Cup a mere three weeks away, the trickle of investment bank World Cup research continues apace. Yes, suddenly all the analysts have become football experts going on bookies.
Sterilised and scandalised
FT Alphaville mentioned last week that the sterilisation or non-sterilisation of the European Central Bank’s government bond-buying was likely to be an extremely controversial move.
We weren’t wrong.
Further reading
Elsewhere on Tuesday,
- Investing in the age of political risk.
- Terminators in the casino.
- Is it time to legalise insider trading?
- Dark pools and the menace of rising opacity.
- Infographic:
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: The death of the European dream
In the past few weeks, Europe has certainly got the world’s attention – but not in the way that it had hoped,
Snap news
Breaking pre-market news on Tuesday,
- Vodafone expects 2011 operating profits to be in the range of £11.2bn to £12bn; takes impairment charge of £2.3bn on Indian operations – statement.
- Yell announces retirement of chief executive and chief financial officer;
Shell gives BP a lesson in PR (or does it?) updated
Update: May 18, 13.20 (BST).
Hands up, we were duped on this one. Shell say the release is a hoax.
From a company spokesman:
We have confirmed that this is a hoax. We aren’t commenting on the content of the hoax release but are investigating its publication.
‘Heightened levels of interbank funding could be with us for some time’
As tensions rise in the interbank markets, Brian Yelvington of Knight Research argues current levels might represent a ‘new normal’.
But first, an historical view (emphasis FT Alphaville’s):
The pre-2007 history of LIBOR-OIS is not very checkered,
Tradebot shows Goldman what minting money really looks like
Both Goldman Sachs and JP Morgan were able to boast of having made money every single day in the first quarter of 2010. An impressive feat? Certainly.
But how’s this for performance, via the NY Times (emphasis ours):
Should CDS markets be more skeptical about European banks?
Moody’s Market Implied Ratings group — not the be confused with the ratings division — last week published some research into the reaction (or lack thereof) of the CDS investors to European banks’ “likely exposures to Greek obligations.”
CDS report: Euro freefall
European credit markets endured a difficult session today, easily underperforming their equity equivalents. The widening accelerated late in the afternoon as the euro came under renewed attack. The Markit iTraxx Europe index nearly 7bp wider at 115.5.bp,
The ECB’s €16.5bn bond-buying, in context
The European Central Bank has opened the kimono on the amount of bonds it has bought as part of its bid to stabilise securities markets — and a few analysts have delved inside, to consider how the programme is going.
ECB puts a figure on its bond-buying
Mystery solved. The European Central Bank revealed on Monday that it had bought €16.5bn of eurozone government bonds as of last Friday.
Flashes, via Reuters:
RTRS-ECB ANNOUNCES DETAILS OF PLANS TO ANNOUNCE STERILISE GOVERNMENT BOND PURCHASES
RTRS-ECB – TO CARRY OUT QUICK TENDER ON MAY 18 FOR ONE-WEEK DEPOSITS
RTRS-ECB – TENDER WILL BE VARIABLE RATE.
Would Pru/AIA be questionable even without Tidjane? (updated)
We do we ask such an obvious question? The answer is because Prudential’s embattled boss is by all accounts starting to lash out.
The following comes from a London-based brokerage who spoke to Tijdane Thiam on Monday morning,
Please do shut it, George
Here’s a intriguing argument for why the new British government shouldn’t talk itself up as taking action to stop the UK becoming the next Greece, as George Osborne, the incoming Chancellor, did on Monday morning.
GLG lurches down a potholed Memory Lane
Remember the heady days of GLG Partners’ US listing back in 2007 when the UK-based fund achieved a stock market valuation of $3.4bn?
Here’s a Lex note from the time;
By folding itself into a US shell company,
To: tidjane.thiam@prudential.co.uk
RE: Announcement of Rights Issue Terms
Dear Tidjane,
Congratulations!
You finally managed to get the prospectus past the FSA. Now comes the hard bit: trying to persuade shareholders to back this “transformational”
Markets Live transcript 17 May 2010
Markets Live chat transcript for the chat ending at 11:11 on 17 May 2010. Participants in this chat were: Neil Hume, FT Tracy Alloway, FT NHGood morning NHand welcome to Markets Live