July, 2010
[South Africa 2010] Anything but Holland vs Germany…?
Here’s a note from Gary Jenkins, head of fixed income at Evolution Securities, on Tuesday regarding what could be a very inauspicious signal for the stock market emanating from this year’s World Cup.
As Jenkins points out:
Markets Live transcript 6 Jul 2010
Markets Live chat transcript for the chat ending at 11:32 on 6 Jul 2010. Participants in this chat were: Bryce Elder Neil Hume, FT BEGood morning. BEAnd welcome to Markets Live
Missing from the Swiss central bank: CHF6.3bn (updated)
Just out from the Swiss National Bank — some rather interesting FX reserve figures.
The SNB’s currency reserves dropped to CHF225.8bn ($213.6bn) in June — a decline of CHF6.3bn from May. Considering that in that month the central bank’s reserves jumped by an astounding CHF78.8bn — or CHF138.5bn in the first five months of 2010 — it seems like quite a step change in policy.
Webvan 2.0
What is Ocado’s secret sauce?
Several big, established and profitable companies (Merlin and New Look for example) have been forced to abandon IPOs over the past year in markets a lot less volatile than now,
Sigma-tised – death of a SIV
The saga of Sigma Finance — God’s gift to structured finance writers, with its shadow banking connotations, Gordian Knot connection and ‘event’ associations — is lurching to its end.
On Monday, liquidators of the erstwhile $27bn SIV issued their final statement.
Banks should be ‘somewhat more like Turkey’, says UBS
With stress test results due in less than two-and-a-half weeks’ time, Europe’s investment banks have been busy churning out their own versions. One of the best we’ve seen landed in our inbox on Monday.
Further reading
Elsewhere on Tuesday,
- Watch the state of the states.
- “What if the Federal Reserve started QE2 with munis as the asset class of choice?”
- Money supply and the stock market, M1 and M2.
- “At the heart of the inflation/deflation debate was and is a debate between two visions of the economy.”
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: South Africa’s trial by World Cup
There are still five days to go before the last ball is kicked at the World Cup, but the sense of relief in South Africa is already palpable,
Snap news
Breaking pre-market news on Tuesday,
- Ocado aiming for equity valuation of £800m-£1.1bn via IPO on the London Stock Exchange — statement.
- Persimmon reports increase in H1 house sales and completions — statement.
Farewell for now, Bob
Bob Janjuah is moving on.
The permabear (and guest FT Alphaville editor) has left RBS but here’s the good news for fans of the most pessimistic strategist in the Square Mile – he’s not going to the buy-side.
27 days later
The Baltic Dry Index, which measures the cost of shipping dry bulk goods, headed into its 27th day of losses on Monday.
This takes it into its longest continuous slump for five years, according to Bloomberg.
G.R.I.M. markets
Forget douple dip. What we’re really facing for the next couple of years are G.R.I.M markets – Growth Really Is Mediocre (geddit).
That’s the view of Graham Secker, Teun Draaisma’s successor at Morgan Stanley,
It’s a zero-sum game Mr. Hari
In case you missed it, the Independent’s Johann Hari has done a Matt Taibbi — yes he of Vampire Squid fame.
But this time the author doesn’t just accuse the bank of gross financial manipulation, he accuses the institution of single-handedly starving millions around the world 2006 onwards.
The plain vanilla mortgage LIVES! It’s just called ‘qualified’
Did any one catch this bit in the latest (and last?) draft of theUS financial reform bill?
From page 189 of Title IX :
‘‘(B) require a securitizer to retain— 16 ‘‘(i) not less than 5 percent of the 17 credit risk for any asset— 18 ‘‘(I) that is not a qualified resi19 dential mortgage that is transferred,
Markets Live transcript 5 Jul 2010
Markets Live chat transcript for the chat ending at 11:24 on 5 Jul 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHand welcome to Markets Live
Monday morning fat finger
Fun and games in Kazakh mining group ENRC on Monday morning.
No official explanation yet as to the reason for the spike, but the London Stock Exchange has cancelled all of the opening trades after the uncrossing price surged to £10.99! (For context ENRC shares closed at 841.5p on Friday).
The Art of AgBank IPO
“What the multitude cannot comprehend is how victory may be produced for them out of the enemy’s own tactics.”
- Sun Tzu, The Art of War
News reaches us that China’s closely-watched Agricultural Bank IPO has so far experienced lacklustre public demand from investors — while the institutional portion had been 10 times oversubscribed.
Losing ECB liquidity = two small rate hikes, says Citi
The European Central Bank’s 12-month LTRO expired with a whimper, last week.
Lower-than-expected roll-over demand for the central bank’s new, albeit shorter-maturity, facilities meant European banks weren’t doing as badly as feared — or,
Won’t somebody think of the eurozone bonds?
Credit Agricole has.
And as the French bank notes, eurozone banks have been rather big buyers of eurozone government debt in recent years — currently owning 26 per cent of Europe’s sovereign bonds.
Further reading
Elsewhere on Monday,
- “What really did Ambac and MBIA in is a haze of fraud…”
- Smart money may not be into the fundamentals.
- “There is no double-dip.”
- Banking crises ruin consumption.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: The long and the short of fiscal policy
The US recovery is faltering, says the FT columnist. Last Friday’s jobs report, though not discomfiting the markets,
Snap news
Breaking pre-market news on Monday,
- Lloyds sells HBOS integrated finance division to Coller Capital – statement.
- BP says Gulf of Mexico clean up costs now $3.12bn – statement.
- Travis Perkins agrees 435.8p/£560m offer for BSS Group – statement.
FTfm on AV
Highlights from Monday’s FTfm.
Industry profits to rebound
A McKinsey report sees profitability in the asset management industry on the rise again this year, but margins will never recover to where they were at the turn of the millennium
Pan-Euro funds regulatory body is imminent
Plans to set up a pan-European regulatory body for financial services,
Finreg, the FDIC and repo markets: a BarCap primer
BarCap produced another solid batch of commentary on the potential implications of US financial reform on Friday*, this time on the topic of repo and short-rate markets.
[For any interested, previous missives covered derivatives/central clearing and the resolution authority]
Here’s the I-want-to-leave-the-office version:
Paul Krugman wants to reach out and punch someone
Remember that time we said economists were fractious creatures? Forgive us, we misspoke. They’re *really* fractious creatures.
Exhibit A – Paul Krugman’s blog post of July 2 at 7:47am, and headlined:
Credit Suisse stress-tests the French banks
A fresh note by Credit Suisse allows us continue our series on the unofficial European bank stress tests being conducted by analysts, ahead of the publication of regulators’ results in mid-July.
Step forward,
US non-farm payrolls – mixed
US non-farm payrolls fell 125,000 in June the US Bureau of Labor Statistics said on Friday but private payrolls rose by 83,000 (although this was below the consensus of 110,000).
Key flashes via Reuters:
Markets Live transcript 2 Jul 2010
Markets Live chat transcript for the chat ending at 11:13 on 2 Jul 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHand welcome to Markets Live