June, 2010
Must Europe’s stress tests fail in order to succeed?
Alastair Gray of UBS has a pretty harsh response to the impending publication of stress tests on twenty-five EU banks.
He wants to see some failure in the mix:
Stress tests are not a panacea. Without a significant proportion,
Markets Live transcript 18 Jun 2010
Markets Live chat transcript for the chat ending at 10:55 on 18 Jun 2010. Participants in this chat were: Paul Murphy Neil Hume, FT Bryce Elder
PMMorning
NHare we up and running yet?
The VAT, the RPI, and the index-linked gilt
The ConDem government’s emergency UK budget will be unveiled next Tuesday.
There seems to be a growing consensus among analysts that we are in for an increase in Value-Added Tax (VAT). A jump in the tax from its current 17.5 per cent to 20 per cent would raise around £12bn,
What are BP dividend swaps telling us?
When BP finally resummes dividend payments after the 2010 moratorium how much can cash are shareholders expect to receive?
The answer, via the dividend swaps market, is a lot less than the 56 cents (or 14 cents a quarter) BP has paid for the past couple of years.
Macondo, in historical Hollywood context
In case you were curious about how BP’s stricken Macondo well currently stacks up to other historical oil spills, here’s a useful graphic from Société Générale, putting it all in context:
So not quite the record flow rates struck by gushing oil wells in the first Gulf War,
Japan’s shiny new ‘financial nation’
After moves to sex-up Japanese government bonds and make debt-reduction a priority of his economic agenda, Japan’s new prime minister Naoto Kan is clearly out to show he means business.
On Friday, his government unveiled a proposal to merge the country’s main stock exchanges by 2013,
O, debito moratoria at Italy’s banks
Here’s something we missed from Tuesday.
Italy has extended the moratorium on business debt it began in August 2009. The agreement, between the Italian Banking Association (ABI) and Confindustria (Association of Industrial Corporates) gives small and medium-sized businesses the ability to put off paying a loan’s principal for up to a year.
Further reading
Elsewhere on Friday,
- For the 100th time, is Spain next – or not?
- That ’30s feeling.
- The dangers and difficulties of ‘Bottom kill’.
- The 10-year is approaching breakout.
- European bond spreads continue to widen.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Look at state finances for the real US budget squeeze
If you pop into a toilet on the Seattle waterfront this summer, you might see over-flowing bins.
Snap news
Breaking pre-market news on Friday,
- Santander announces offer for 300 RBS branches — statement.
- Porsche anticipates under €1bn loss at end of fiscal year — statement.
- Competition Commission approves Bristol Water price increases — statement.
Japan’s inflation target dies a very early death
Japan’s been without inflation for oh, 10 years now. So why start?
The Democratic Party of Japan’s (DPJ) manifesto, released on Thursday, was full of pledges to reduce the state debt — but no mention on that rumoured western-style 2 per cent inflation target.
Staggered and leaky stress-tests, again
There was another intriguing leak from “EU sources” on the subject of European bank stress-tests on Thursday.
We’d already heard earlier in the day from Spanish government sources that Santander had fetched the best rating in the tests so far.
How to profit from long-tail journalism
Google may be stepping into the business of content production and journalism.
As the FT scooped on Thursday:
Google is developing technology that could position it to compete with a new breed of digital media companies that are generating story ideas for the internet by mining online search data for under-covered topics.
More on Spanish credit lines
Spain’s latest auction of 10- and 30-year bonds was by all accounts pretty well received on Thursday, in the context of recent jitters about its sovereign debt.
So why the need for statements like this? As Reuters reports:
Live on Capitol Hill: Tony Hayward
BP’s chief executive is testifying before a Senate panel on Thursday:
Click the picture to watch on C-Span. FT Energy Source is also live-blogging.
[GAIM conference 2010] Mammon and Montrachet
What do eastern mysticism, violence, mammon, and am dram have in common? They are all dinner and drinks topics of conversation amongst hedge fund managers in Monaco.
Networking – or at least, meeting old colleagues – is half the reason,
Tarp-edoed dividends
Last week the US Treasury released its May Tarp report.
The department was quick to herald a milestone in the programme; Tarp repayments to taxpayers had, for the first time, surpassed the total amount of Tarp funds outstanding.
The Fed’s last QE experiment…
The latest edition of the St Louis Fed’s Monetary Trends note — of off-the-chart monetary base growth fame — has a short and punchy section on the United States’ first bout of quantitative easing, in the,
Brave Punt
Tip of the hat to Heidi Moore for this one. A contract just posted on Intrade:
A very brave punt, that. Although if sir or madam is in a betting mood…
Swiss intervention, exiting stage left
Is the Swiss National Bank throwing in the towel on EUR/CHF intervention?
IFR Markets’ Divyang Shah thinks so:
The SNB has given the green light to tolerating further CHF strength by dropping the reference to intervention in their latest monetary policy assessment.
Epita-FSA-tic
Related link:
The FSA will cease to exist in its current form – FT Alphaville
Markets Live transcript 17 Jun 2010
Markets Live chat transcript for the chat ending at 11:24 on 17 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder Paul Murphy NHGood morning NHand Welcome to Markets Live
Misfortune or carelessness at Macquarie Bank?
To lose one investment banker might be regarded as a misfortune; to lose dozens looks like carelessness, to paraphrase Oscar Wilde.
In the case of Australia’s endlessly ambitious Macquarie Bank, however,
Flying bonos
Spain just sold €3bn of 10-year bonds at a yield of 4.864 per cent.
That’s a jump from the 4.045 per cent paid at its last 10-year auction, on May 20. Quite a jump.
But to put that first figure into some context,
BP – a line in the sand?
There’s been a mixed reaction from City analysts to BP’s decision to halt dividend payments for the rest of the year and pay $20bn into a Gulf of Mexico claims fund.
House broker UBS is hopeful that BP will now be able to normalise its relationship with the White House (emphasis ours throughout):
Recapitalise, or resisting the lure of liquidity
Presenting . . .
. . . the European predicament in 500 words, by the liquidity-averse analysts at Morgan Stanley.
And it’s worth reading given the current debate surrounding European bank stress tests .
All eyes on Spain – and not in a football sense [updated]
As in World Cup football, so in the bond market?
There are plenty of Spain-Switzerland Cup jokes going ’round at the moment, in light of the Spanish team’s surprise defeat at the hands of the er,
From blue chip to hot tip
BP’s London stock rocketed to the heady heights of 358p on Thursday:
Some consolation for that missing dividend. Now — can it last?