August, 2010
Markets Live returns
Yep, FT Alphaville’s daily whiz around the markets is back from its summer break and raring to go.
So, join a fully recharged Neil Hume and Bryce Elder at around 11.00am (BST) for an hour of lively markets chat.
The price of oiler realpolitik
Here’s an AIM-listed enigma to ponder on Monday.
Life is looking rather good if you’re a London-listed oil mid-cap at the moment. Kind of less so if you’re out to buy one. Why?
As Oriel Securities’ Richard Rose noted on Monday,
Potash: ‘we have contact’
So PotashCorp says it was “contacted” late last week by China’s Sinochem Group and Brazil’s Vale as it sought to fend off the $39bn hostile bid from BHP Billiton, reports Bloomberg on Monday.
Citing a person with knowledge of the matter,
UBS analysts are mostly green, visualised
Sighted in the Long Room — one almighty visualisation of UBS analysts:
(Click to enlarge)
The network diagram was created earlier this year by Toby Segaran, an all-round techno wonk. It’s a continuation of a speech he gave at last year’s Web 2.0 Expo — about visualising financial data.
Schatz-ing through Europe’s excess liquidity
Did you notice the, erm, fireworks in the September Schatz last week?
This particular futures contract in German short-term debt reached an all-time high on Friday.
And those unlucky enough to (still) be short-the-Schatz can blame this man — Bundesbank head and European Central Bank governing council member Axel Weber — and his Thursday interview with Bloomberg News.
Further reading
Elsewhere on Monday,
- Queasing over quantitative easing.
- “The Spanish government has been increasingly resorting to the social security reserve fund to buy its bonds.”
- Why QE is likely to trigger a collapse of the US dollar.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Interactive graphic: Bankers’ pay – whose fell the most?
The FT survey reveals that, while many bank chief executives accepted vastly reduced payouts in an effort to defuse mounting public and political anger,
Snap news
Breaking pre-market news on Monday,
- HSBC confirms it’s in talks with Old Mutual on Nedbank majority stake — statement and statement.
- Petrofac posts first-half revenues of $2.13bn — statement.
FTfm on AV
Highlights from Monday’s FTfm.
UK pension funds come to the rescue
Local authority pension funds are stepping into the breach to help fund some of the infrastructure projects in danger of being axed due to the UK’s clampdown on public spending.
At the top, you can only look down
It’s approaching happy hour at Chez FT Alphaville, so we hope you don’t mind if we finish the week on a lighter topic (as we sometimes do).
We draw your attention to a recent article about the psychology of power in the pages of our mortal enemy fierce rival formidable competitor the Wall Street Journal,
Of fat tails and mean reversion
James Montier, proprietor of the excellent Behavioural Investing blog, has a post taking issue with a recent column in the FT by Richard Clarida and Mohamed El-Erian.
Specifically, Montier isn’t convinced by their assertion that investing based on mean-reversion will be “less compelling”
Paolo Pellegrini’s painful July
As Absolute Return reported on Friday, Paolo Pellegrini – the Stan Druckenmiller to John Paulson’s Soros – is winding down his hedge fund, PSQR Capital.
PSQR has only been going since 2008, when Pellegrini (who masterminded Paulson &
Guest post: The Fed does not want debt monetisation
FT Alphaville presents a guest post from Jerry H. Tempelman, CFA, who was previously a Senior Financial and Economic Analyst with the Federal Reserve Bank of New York. The views expressed are strictly his own.
Bunds are the new treasuries, when they want to be
FT Alphaville wondered earlier why German bunds would be affected by convexity hedging dynamics in the US, one of the factors that is supposedly driving 10-year US bond yields to fresh lows.
Could it all be down to that old devil,
August in ‘busy’ shocker for global M&A
It’s beginning to look as if Credit Suisse were right about the upcoming rise of global M&A they recently predicted, though perhaps even they couldn’t have guessed how quickly it would come.
This is August,
Software of the subprime crisis
Here’s a novel idea about the CDO component of the subprime and financial crisis.
As late as 2003 CDOs were — believe it or not – still being described with words like “Toxic. Explosive. Opaque.”
Nobody ❤ gasoline
Could it be that nobody in the US wants gasoline anymore?
On Wednesday, John Kemp of Reuters observed how the combined stock of crude oil and refined products in commercial storage around the US had surged to 1.130bn barrels — the highest level since weekly records began in 1990.
More potash, more problems
Or, read the ag bull M&A small print.
BHP Billiton’s hostile bid for PotashCorp received a bit more resistance on Thursday, with indications of rival interest from Sinochem.
Now Citigroup’s analysts have also looked into the offer’s strategic innards,
How low can they go?
Another day, another set of lows in 10-year Treasury and bund yields:
In bund yields specifically, we might add that these are record lows for both the 10-year and 30-year yields — which on Friday struck 2.273 per cent and 2.957 per cent respectively.
Webvan is flying without wings
Not with a bang, but with a whimper — life after the stabilisation period for Ocado on Friday:
This was going to be 200-275p, once.
Flipping the capital structure || erutcurts latipac eht gnippilF
Spotted late on Thursday — one massive change for banks’ capital structures appearing just on the horizon.
The Basel Committee published a 20-page consultative document on loss absorption in capital instruments — something that’s (finally) gaining some serious regulatory attention after the recent financial crisis.
Yuan-ted: McDonald’s new bond
Two global titans — one of fast food and one of the world economy — have teamed up in the debt market. For, McDonalds has become the first foreign corporate to issue a renminbi-denominated bond.
The Thursday press release from offer manager Standard Chartered:
Further reading
Elswhere on Friday,
- One dozen thoughts on the current market situation.
- Testing those ‘periods when to make money.’
- Trends in total US debt.
- The Druckenmiller (risk management) magic.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
FTfm Reports: The letter that shook world of hedge funds
Renowned hedge fund manager Stan Druckenmiller’s decision to wind down his Duquesne fund comes as many of his far less illustrious peers in the hedge fund world are suffering.
Beveridge redux
Maybe there’s not so much to this Beveridge Curve business after all.
As we’ve written previously, many economists and other observers have been discussing in recent months the rather large and persistent gap between job openings and the high unemployment rate,
A day of bad news in charts and graphs
There was quite a lot of economic news and data coming out of the US on Thursday, and all of it fell somewhere on the spectrum between “as bad as expected” and “definitely worse”.
The Philly Fed survey,
Why haven’t there been more bankruptcies?
This chart below, courtesy of The Economist, raises a puzzling question as much as it depicts a worrisome trend (though it does that too):
The Economist writes that bankruptcy filings in the US climbed by 20 per cent in the year through the end of June,
What AAA corporate yields tell us
Felix Salmon suggested on Tuesday that corporates would never trade through Treasuries.
In fact, he wrote (our emphasis):
The only way for JNJ to trade through Treasuries would be if somehow there were worries that the US government was simply not going to pay some of its bonded obligations — while at the same time there were no worries at all about JNJ making its coupon payments.
Basel gives good CoCo
Basel goes bank CoCo nuts. Or as the Basel Committee has put it more, ah, soberly:
The Basel Committee is of the view that all regulatory capital instruments must be capable of absorbing a loss at least in gone-concern situations.