June, 2010
Markets Live transcript 10 Jun 2010
Markets Live chat transcript for the chat ending at 11:23 on 10 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHand welcome to Markets Live
Equity underwriting fees and the OFT
It’s not a full blown investigation (yet) but…
The Office of Fair Trading has confirmed on Thursday morning that it plans to undertake a “market study” into equity underwriting and associated services.
BP short interest, other facts and stuff (updated)
Readers have been asking for short interest data on BP and here, via Data Explorers, it is:
As you can see from the graph, stripping out the spike related to the last (?) dividend payment, the underlying level of stock outstanding on loan (SOOL) has barely budged since the spill
So,
The ‘Sinofication of BP’: Thinking the unthinkable
The ignominies continue to pile up for BP as its share price continues to plunge (it’s now down more than 40 per cent since the April oil-rig explosion and at the lowest level since April 1997) and continuing oil-leak woes.
ECB debt certificates live on in analysts’ minds
On Wednesday, the European Central Bank had a technical hiccup.
It accidentally published a “test message” outlining details of the planned sale of €10bn worth of three-month debt certificates to help mop up some eurozone liquidity.
China’s locals on a locally-generated China crisis
The China analysts over at Standard Chartered have been on a field trip:
We spent last week taking a small group of clients on a tour of China. We met a central bank researcher, an oil company executive,
Danger! Falling broadsword
Meanwhile, traders claim BP’s CDS has traded at 510bps on Thursday morning, up from 386 at the close on Wednesday.
Further reading
Elsewhere on Thursday,
- Can the buy side take on the sell side?
- Yale’s ‘buy-on-dips’ stock market confidence index.
- Nigerian spammer email of the year.
- The global transmission of European austerity.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
David Pilling: ‘Just do it’ is no mantra for Japan
It is commonly stated of Japan that everybody knows what has to be done. All that is needed is a leader with the guts to do it.
Snap news
Breaking pre-market news on Thursday,
- BP says not aware of any reason for the fall in its share price during US trading last night; has financial strength to tackle spill – statement.
- Office of Fair Trading launches ‘market study’ into equity underwriting fees – statement.
Goldman’s Hudson CDO – What lay beneath
Savvy readers may have spotted some confusion over Goldman Sachs’ Hudson CDO.
Specifically on the subject of whether the bank used its own assets for the deal.
The FT seems to suggest yes:
The bank created and sold Hudson Mezzanine,
A Hudson CDO primer
Will the SEC be going after every CDO named in this 2009 New York Times article?
After taking on Goldman’s Abacus, with US prosecutors going after Morgan Stanley’s Dead Presidents deals, the FT reports that the SEC is now pursuing another CDO — Hudson Mezzanine Funding 2006-1.
OFT takes on the investment banks
This could be interesting: the Office of Fair Trading is set to launch an investigation into the big investment banks.
From Sky’s Mark Kleinman:
I am expecting that the Office of Fair Trading will tomorrow launch a competition probe into parts of the investment banking industry,
Sell in May… Hedge funds hit hard
An end of May snapshot…
Tudor BVI Global MTD (2.26%) YTD: (0.49%)
Moore Global MTD: (9.15%) YTD: (6.17%)
Lansdowne UK Equity MTD: (3.98%) YTD: 1.07%
BlueTrend MTD: (8.3%) YTD: 1.49%
Viking Global Equities MTD: (3.2%) YTD:
[Abacus] Goldman faces new CDO case
Add this one to the many legal risks of Goldman Sachs.
It looks like the bank’s bid to reach a settlement with the Australian hedge fund Basis Yield Alpha over the so-called Timberwolf CDO hasn’t worked — as was indicated.
CDS report: Battering for BP
Markit iTraxx Europe 138bp (-3.5), Markit iTraxx Crossover 621bp (-12)
Markit iTraxx SovX Western Europe 150bp (-15)
Markit iTraxx Senior Financials 191bp (-14)
Greece 740bp (-48), Spain 240bp (-23),
Meet the new Deutsche Mark
Or the Swiss franc, as it’s more commonly known.
According to Mansoor Mohi-uddin, managing director of foreign exchange strategy at UBS, one of the mega currency trends of the next decade will be the increasing use of the Swiss franc as a proxy for the old German Mark.
Against austerity
Paul Krugman has been fighting something of a one-man war against European fiscal cuts lately — especially after the G20 bestowed its blessings.
He’s now directed his fire at euro-austerity’s impact on global growth:
A further indignity for BP?
Nigerian spammers are now trying to profit from its woes, according to Bronte Capital’s John Hempton, who (ahem, ahem, cough, cough) found the following in his inbox on Wednesday:
From: Dudley Caruthers Esq (Barrister at Law)
Subject:
All TruPSed up
Here’s something suddenly hitting the headlines — the war on TruPS.
That’s Trust Preferred Securities, which have been mentioned on this blog as a major structured finance oops before. And they are now coming under the scrutiny of US regulators.
Shuffling towards a Euro naked shorts ban
Just when you thought it was safe to go back naked and short into the water…
French President Nicolas Sarkozy and German Chancellor Angela Merkel have upped the ante on banning regulating short-selling in Europe.
Spanish interbank spectres (updated)
Well, Spain can’t blame los especuladores medios anglosajones for this one.
The Spanish newspaper Cinco Días says the country’s banks are losing access to interbank lending (translation and emphasis FT Alphaville’s):
Bank balance sheet management, the European way
Or, the interaction between the European Central Bank and eurozone banks, in charts.
The latest European Credit Tracker from UBS, drawn up by banking analysts Alastair Ryan and John-Paul Crutchley, is a great (graphical) overview of the European banking system and the ECB.
Markets Live transcript 9 Jun 2010
Markets Live chat transcript for the chat ending at 11:10 on 9 Jun 2010. Participants in this chat were: Neil Hume, FT Miles Johnson, FT NHGood morning NHand welcome to Markets Live
Danger! Knife falls even further
The price action in BP shares just after 10.30am (BST) on Wednesday.
The latest lurch lower seems to have been sparked by talk of a dividend suspension and reports of a blow out in the BP CDS.
From a City broker:
So it begins… the Misys break up
Shares in Misys have soared on Wednesday morning:
The reason is a complex deal that will see the UK software company sell the bulk of its 54 per cent holding in Allscripts, a Nasdaq-listed provider of electronic health care records,
The ECB’s debt certificates. (Ah wait, nevermind).
How not to test your press release systems, courtesy of the European Central Bank:
08:57 09Jun10 RTRS-ECB TO ANNOUNCE SALE OF 10 BLN EUROS IN THREE-MONTH DEBT CERTIFICATES LATER ON WEDNESDAY – DOW JONES