July, 2010
Markets Live transcript 8 Jul 2010
Markets Live chat transcript for the chat ending at 11:13 on 8 Jul 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHHola NHand welcome to Markets Live
When is a stress test not a stress test?
When is a ‘stress test’ not a ‘stress test’? One analyst raised the point in responding to the unveiling on Wednesday evening by the Committee of European Banking Supervisors of its stress tests of 91 European banks (more detail in our earlier post).
Gardner gets to grips with Connaught
If there’s such a thing as the British business establishment then Sir Roy Gardner, chairman of Compass and former boss of Centrica, is a member.
So, there was understandable surprise in May when Sir Roy took on the chairmanship of Connaught,
Commercial bank ‘gold swap’ intrigue continues
The footnote in the Bank of International Settlement’s latest annual report, which revealed the bank was sitting on 342 tonnes worth of gold (about $14bn) as part of a ‘gold swap’ deal with a (or some) mysterious counterparties has on Thursday been further clarified.
Buiter: Markets are very noisy small children
Some FT readers undoubtedly remember – and miss – Willem Buiter’s inimitable turn of phrase since he left his Maverecon blog on FT.com for the undoubtedly more lucrative role of Citigroup’s chief economist,
Further reading
Elsewhere on Thursday,
- The $2.6m steak lunch with Warren Buffett.
- The rising threat of deflation.
- Let Goldman be Goldman.
- Debunking the paradox of thrift.
- Double-dip recessions and the (dubious) wisdom of crowds.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: The mobile winner will not take all
The mobile revolution has broken out and there are casualties, writes the FT columnist. Mobile technology is on the rise as hardware and software companies face a new competitive landscape.
Snap news
Breaking pre-market news on Thursday,
- Connaught says CEO and FD to leave company; starts review of accounting policies — statement.
- BP pushing to plug Gulf of Mexico leak by July 27 — report.
CEBS reveals stress test details (at last)
It’s finally out!
The Committee of European Banking Supervisors has finally released (as promised) the details of Europe’s banking stress tests.
Here’s the statement, which also includes a list of all the banks to be tested:
Don’t panic, the Baltic dry is a rubbish indicator!
The Baltic Dry Index (BDI) — a measure of shipping costs for dry bulk goods — suffered its 29th consecutive daily decline on Wednesday, to record its longest losing streak in more than six years, according to Bloomberg.
Stress test rumourtrage round-up
As we wait for the release of the eagerly-awaited European bank stress methodology – which may or may not be released on Wednesday – here’s a quick round up of the latest rumours swirling the London markets and some snap reaction from Goldman Sachs.
Spain’s sand-castle exposure
Aside from generalised peripheral sovereign debt jitters, there is another reason to be scared of Spain, according to Barclays Capital’s Antonio Garcia Pascaul.
In his latest note, co-authored by Piero Ghezzi,
A new type of TruPS warfare
TruPS CDOs may have escaped the full wrath of US financial reform, but they still have to deal with the rather daunting prospects of their underlying collateral — those Trust Preferred Securities (TruPS).
Quixotic QEasing
Here’s an interesting tidbit to trot out in the debate over the shape of the US recovery.
The Federal Reserve has been quick to highlight the speed and intensity of its policy movements, most notably its quantitative easing and interest rates.
Markets Live transcript 7 Jul 2010
Markets Live chat transcript for the chat ending at 11:21 on 7 Jul 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHand welcome to Markets Live
Who’s the bank with the golden swap?
UBS precious metals analyst Edel Tully takes a stab at making sense of the mysterious BIS gold swap, revealed in headlines on Wednesday.
In particular, she attempts to determine which institution could possibly be behind it.
Goldman calls for QE2
This will be music to the ears of Paul Krugman — Goldman Sachs calling for Quantitative Easing v2.0 and additional deficit-financed fiscal stimulus.
The bank’s chief US economist Jan Hatzius reckons there are enough “disturbing signs”
Some BIStoric gold swaps
Whether the Bank for International Settlements can, or wants to, sell its 346 tonnes of newly-acquired central bank gold is a matter of some debate.
But one thing everyone seems agreed on is that, as the FT notes,
346 tonnes of gold at the BIS …
… 346 tonnes of gold at the BIS, 346 tonnes,
You take one down, sell it around, 345 tonnes of gold at the BIS!
This little footnote — from BIS’s latest annual report — is currently making waves in gold markets:
Further reading
Elsewhere on Wednesday,
- “There is no statistical evidence that bailouts can speed economic recovery.”
- Alan Greenspan vs Paul Krugman.
- In praise of default.
- The SNB’s gold history …
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Demand shortfall casts doubt on early austerity
Fiscal default is nigh, insist the doomsayers: repent and retrench before it is too late,
Snap news
Breaking pre-market news on Wednesday,
- Heritage Oil gets approval for Ugandan asset sale but tax row rumbles on — statement.
- Marks & Spencer reports good start to the year; like-for-like sales up 3.6 per cent — statement.
What’s going on with lumber futures?
The Baltic Dry’s losing streak – now into its 28th day – is becoming old hat. But have you heard the one about the lumber futures?
As Bloomberg reported, lumber fell limit-down on the CME on Tuesday,
Is this the world’s most bearish man?
As FT Alphaville readers may be aware, we have long bestowed the title of world’s most bearish man to this man: RBS’ Bob ‘The Bear’ Janjuah.
But as we noted on Monday, the permabear will be moving on from post job at RBS — and will most likely be in gardening hibernation until at least the salmon season.
Webvan 2.0 prospectus
The Webvan Ocado IPO document is now available — all 284 pages of it.
Most of the key facts and figures have already been made public but there are some interesting tidbits in the Additional Information section,
The eurozone bailout fund: A Q&A
BNP Paribas analyst Ken Wattret has compiled a handy primer on the European Financial Stability Facility (EFSF), an appendage of the so-called European Stabilisation Mechanism.
The full note runs to seven pages and is available in the usual place.
Fiscal anxiety crosses the pond
Here is an arresting graphic (click to enlarge):
The Bloomberg chart above shows the 5-year CDS for California, Illinois and New York, bond insurer Dexia added for context.
This chart is being circulated in the wake of a piece in Tuesday’s FT which focused on increased investor concern about rising local government debt in the US:
‘Non-Delta 1′ on the rise in Europe
A couple of interesting factoids come our way via Blackrock’s iShares’ just-launched weekly European ETF update.
Including the fact that last week saw a 40 per cent increase in the exchange turnover of so-called Non-Delta 1 ETF products.
Cost of ECB’s bond sterilisation still creeping higher
Last week, as FT Alphaville has highlighted, the ECB prominently failed to sterilise all of its €55bn worth of bond purchases in its one-week fixed-term deposit auction.
Moreover, as we wrote at the time,