June, 2010
Further reading
Elsewhere on Thursday,
- Is oil and gas leaking from cracks in the seabed?
- The view of Russian scientists is ‘yes’.
- Pricing in the risk of ruin for BP with options.
- The elusive trading range.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Oil has become the new tobacco
When Tony Hayward, BP’s chief executive, testifies to the US Senate on Thursday about the company’s Gulf of Mexico oil leak disaster,
Snap news
Breaking pre-market news on Thursday,
- BP to set up $20bn claims fund; suspended dividend payments for 2010 — statement.
- Game Group total sales down 11.4 per cent in 19 weeks to 12 June; announces new chief executive — statement and statement.
The FSA will cease to exist in its current form
Selected highlights from UK chancellor George Osborne’s Mansion House speech:
First, regulation:
I can confirm that the Government will abolish the tripartite regime, and the Financial Services Authority will cease to exist in its current form.
BP’s dividend decision
Payments axed for the rest of the year.
Other breaking news: independent claims fund to be administered by Ken Feinberg, head of the 9/11 compensation fund, BP to make initial payments of $3 and $2bn,
As the execs turn themselves in, BP turns itself over…
To accompany President Obama ‘having words’ with BP chairman Carl-Henric Svanberg and chief executive Tony Hayward, here are some more facts and figures on the oil firm:
- BP shares outstanding:
[MoneyTech] The high-frequency flack
Now here’s an interesting development in regulatory capture, uh, the growing diversity of industry and regulatory links in US securities. Flash via Reuters:
RTRS-FORMER SEC STAFFER OVERDAHL TO BE SPOKESMAN OF FUTURES INDUSTRY ASSOC’S NEW HIGH FREQUENCY TRADERS LOBBY GROUP-SOURCES
That would be James Overdahl,
BP has nothing to fear…
…But fear itself. Contrast this:
RTRS-FITCH RATINGS SAYS BP’S CDS MOVE OVER DONE
With this:
BP 1-YEAR DEFAULT SWAPS RISE 432.5 BASIS POINTS TO 1,075
While bearing in mind this — five-year CDS on BP widened to 600 bps (+115) earlier on Wednesday,
[Ireland's Bad Bank] Some Anglo Irish candour
Anglo Irish’s CFO Maarten van Eden has been testifying before a parliamentary committee hearing in Dublin on Wednesday.
Among his comments, Bloomberg reports he admitted the bank faced “horrendous” losses on loans it was transferring to the government’s so-called bad bank,
An initial double-dip indicator
Wells Capital Management wants everyone to forget Payroll Friday.
The number to focus on as an indicator for the shape of the US recovery, Wells’ chief investment strategist Jim Paulsen says, is not the monthly payroll figure,
Forget oil, shale gas just gets sexier
As BP’s oil leak disaster adds to concerns about growing regulatory and safety risks of oil, coal and other conventional energy sources, shale gas is burnishing its reputation as the sexy new energy play.
Markets Live transcript 16 Jun 2010
Markets Live chat transcript for the chat ending at 11:25 on 16 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHand Welcome to Markets Live
Risk on, but why?
Send for the rally monkey? The FTSE 100 is on course for a sixth straight session of gains, while the S&P 500 closed above its 200-day for the first time in a nearly a month.
(Other markets are up too:
Spain: ‘If the river is noisy it’s because it has water’
Well, this was a delightfully daft rumour of a Spanish bailout on Wednesday.
Here’s the denial first, via Reuters:
RTRS-EU COMMISSION DENIES REPORT THAT EU, IMF AND U.S. TREASURY DRAWING UP LIQUIDITY PLAN FOR SPAIN
While the report in question appeared in the Spanish newspaper El Economista (translation FT Alphaville’s):
Who’s not trading with BP?
Tuesday’s six-notch rating downgrade of BP by Fitch to BBB, appears to have spooked some of the firm’s oil trading counterparties.
According to Reuters, Bank of America Merrill Lynch supposedly told traders to stop entering any new oil trades with BP that extend beyond June 2011.
Any scenario possible for Spanish bank funding, says JPM
Analysts at JP Morgan have just published a 100-page Spanish banking extravaganza.
There are some big and useful numbers in the report, which deals (in detail) with the funding models of Spanish retail banks.
The ECB’s dwindling sterilisation
The European Central Bank is not shy about highlighting its sterilisation efforts.
Having announced it would start buying government bonds back in May, it did not take long for the ECB to publicise its sterilisation process.
Eternal sunshine of the securitisation mind
It’s conference time!
The 2010 Global ABS meet is currently taking place at the Hilton Metropole, just across from the Marks & Spencer on Edgware Road in London. This is rather a fall from grace,
Further reading
Elsewhere on Wednesday,
- Why the BP flow rates are increasing.
- Are we in the dead zone?
- Felix Salmon’s second wine article for Reuters.
- Does the Spanish government know something about German banks that it’s not supposed to know?
- Part II in Hempton’s Edward Hugh series.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why plans for early fiscal tightening carry global risks
Yet again, we hear the cry of the old economic religion: repent before it is too late;
Snap news
Breaking pre-market news on Wednesday,
- J Sainsbury total sales up 7.6 per cent in Q1 — statement.
- Rio Tinto still reviewing Australia projects in light of super-tax — statement.
- Royal Bank of Scotland agrees sale of RBS Pakistan — statement.
Henderson’s Hong Kong property dream falls through
Fresh from Hong Kong — a headache for property giant, Henderson Land.
Late on Tuesday, the company controlled by billionaire Lee Shau-kee let slip that it would take an HK$734m charge (USD$94m) on 20 cancelled Hong Kong apartment sales.
CDS report: dismal downgrades
Markit iTraxx Europe 128bp (+1.5bp), Markit iTraxx Crossover 570.5bp (-6.5)
Markit iTraxx SovX Western Europe 145bp (+4.5)
Markit iTraxx Senior Financials 168bp (+1)
Greece 795bp (+45),
This way to the lifeboats
April’s TICs data are in — the month’s snapshot of US long-term capital inflows, taken in this instance at the height of the Greek debt crisis.
There’s therefore a slight whiff of a flight to safety in the data.
Kerviel’s cash positions
Some interesting details are emerging from the trial of Société Générale’s rogue trader Jerome Kerviel in Paris, now in its sixth day.
For one, the defence is trying hard to prove that Kerviel’s direct management was in-the-know about many of his unhedged positions.
BSkyB investors should believe in better
As BSkyB shares retreated toward the 700p level in late London trading on Tuesday, News Corporation’s stock moved sharply higher in New York.
That’s even though a bid for the UK satellite company is supposed to be bad news,
Of CVA and sovereign CDS
Via the Bank of England’s Quarterly Bulletin, here’s an interesting observation on the sovereign CDS market — one that should be required reading for regulators, traders and the media alike.
It focuses on activities of counterparty valuation adjustment (CVA) desks and how they influence — sometimes quite strongly — the price of sovereign CDS.
Greeks on Greece
This sounds like it was a fun trip for ING’s chief global economist Rob Carnell — giving a Greece-bearish presentation to an audience in, ah… Athens.
Not that it seems to have been such a tough crowd:
[GAIM conference 2010] ‘We’re here to take risks’
The weather is wanting here in Monaco:
On the plus side, bright sunlight is probably not what everyone needs right now, after a night propping up the bars of Monte Carlo’s hotels.
(On an entirely unrelated note,