August, 2010
Further reading
Elsewhere on Monday,
- 1,000 words of Maria Bartiromo.
- A visual history of cornered markets.
- “Deflation, Inflation, Stagflation maybe Biflation or Agflation” — all the ‘flations are up for grabs!
- Can we stimulate to prosperity?
- Testing the Hindenburg Omen.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Jürgen Stark: The idea of Euro-paralysis is an illusion
The financial crisis has shaken the global economy to its core, writes Jürgen Stark,
Snap news
Breaking pre-market news on Monday,
- Vedanta to acquire 51 to 60 per cent of Cairn India — statement.
- Cairn Energy plans ‘principal focus’ on Greenland after disposal — statement.
- Aviva confirms it rejected recent RSA bid;
Just don’t check their pockets, then
Since a bit of levity on Friday afternoon never hurts*, we pass along the following anecdote-cum-lesson from The Psy-Fi Blog:
Every morning before he left home the illusionist James Randi used to take a piece of paper and write on it “I James Randi will die today”.
TIPs are the best
There’s been lots of pondering about the negative five-year Treasury inflation-protected (Tips) rate, but here’s one explanation that strikes us as extremely sensible.
Tips are the best.
In the event of deflation,
Adventures in equity knife-catching, SWF edition (updated)
If you’re a BP investor who thought twice about catching the falling knife of the firm’s post-Gulf spill shares this summer — well, spare a thought for Norway.
Thanks to the government’s sovereign wealth fund,
Disinflation right on schedule
Looks like the inflationistas may have to continue laying low, at least for a while. A chart from the release of this morning’s CPI numbers:
As you can see, the year-on-year change in the core index has remained at a measly 0.9 per cent for the last four months,
A CDO-esque gold investment
Hinde Capital, the London-based gold hedge fund — with an objective to outperform gold — have put out a note about what they feel are the CDO-esque qualities of the GLD gold exchange traded fund.
And yes,
Worried of Webvan
To: michael.grade@ocado.com
Re: Ocado listing
Hello again Michael,
You never call, and you never write – despite our having had lots of questions about your business before its flotation in July.
The $11.1bn buyback pain at BAC
A sharp-eyed spot over at American Banker.
They’ve noticed this little section from Bank of America’s recently filed second-quarter 10-Q:
Although the timing and volume has varied, repurchase and similar requests have increased from buyers and insurers including monolines.
Of Vedanta and Vikings
And to think Friday used to be the day when we only heard daft rumours about takeover bids in London, rather than actual fact-based stuff.
Exhibit A — an Indian press report that Vedanta is taking a 51 per cent stake in Cairn India for between $8bn and $8.5bn,
David Rosenberg on why the yield curve will flatten – this time!
Dave Rosenberg is enjoying his moment.
On Thursday the Gluskin Sheff man took to his morning notes to answer one of the big questions regarding the Fed’s last — and future — bout of quantitative easing.
How to say ‘appropriate action’ in Japanese
It seems, well, “appropriate” that to top off a (relatively) wild week for markets and central banks, the prospect of yen intervention dominated trading on Friday, following media reports that Japan’s prime minister and central bank head are set to meet next week to discuss ways of dealing with the currency’s strength.
Aviva survives discreet RSA drive-by
Share-price action in Aviva on Friday, after Sky News reported that it had, in recent weeks, rejected a surprise £5bn RSA offer for its general insurance arm:
Aviva declined to comment, but Sky’s Mark Kleinman said the board immediately turned down the bid for strategic reasons.
Hindenburg sighted…
The Death Cross. The Bearish Abandoned Baby. The Hindenburg Omen.
Who names these ominous technical indicators?
On Thursday the third of those examples — named after the airship disaster of 1937 — reared its head.
Not stressed but skittish
RBS are back with an update of their European stress test tracker. And they’re starting to sound a wee bit nervous, noting that, “the stress tests might have failed to ring fence the periphery.”
Further reading
Elsewhere on Friday,
- Goldman’s strange gym fee economics.
- World population by longitude and latitude.
- Is GLD a CDO in disguise?
- The flash crash, three months on.
- Is this finally the economic collapse?
- “CHRONIC DEFLATION.”
- Further,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Unravelling the web of shadow banking
A couple of years ago, it occurred to me that the 21st century financial system had come to resemble a huge ball of candy floss,
Snap news
Breaking pre-market news on Friday,
- African Diamonds rejects unsolicited offer approach — statement.
- BP confirms to pay $50.6m fine over Texas City refinery — statement.
- Empyrean Energy investigating bulletin board false statements — statement.
Troubled Waters
We’re not here to pile onto Maxine Waters, the US congresswoman from California.
To FT Alphaville she has been not only a source of amusement but, on the subject of credit default swaps, an inspiration for our own bold proposals.
Blaming shareholders
In Alan Greenspan’s famous admission of error, it was the failure of “the self-interest of lending institutions to protect shareholders’ equity” that left him in “a state of shocked disbelief”.
A pity that the growing body of literature explaining the failure of bank shareholders themselves wasn’t around then,
Get off my global savings glut, you damn kids
Paging Martin Wolf. Given recent coverage of global imbalances stalking the market and, uh, teenager-backed bonds on FT Alphaville, here’s an intriguing Goldman note on the role of demographic factors in future current account imbalances.
Unravelling the mystery of the negative US swap rate
Readers might remember how back in March 2008, Bloomberg ran a story that declared:
Treasuries Riskier Than Bunds, Default Swaps Show (Update1)
March 11 (Bloomberg) — The risk of losses on U.S. Treasury notes exceeded German bunds for the first time ever amid investor concern the subprime mortgage crisis is sapping government reserves,
Derivatives reform: now what?
You may have heard that the signing of financial reform in the US wasn’t just the end of a long and difficult process but also the beginning of another, with a host of federal agencies given discretion to study and define the rules for the areas they oversee.
A deep freeze over Catalonia, or is it?
Now here are some rather interesting developments in the Spanish banking arena this week.
On Thursday, Bloomberg reported how Spain’s autonomous region Catalonia has been completely frozen out of the lending market since about March.
Duelling, Dana-related — and rather detailed — RNS
Market disclosures at dawn. And so on. We can’t remember the last time the RNS statements washed so much dirty laundry in public following a takeover break-up.
But Dana Petroleum’s suitor of recent months,
Teenage-backed bonds
In case you were wondering what, erm, securitising teenagers might look like . . .
. . . here’s one idea:
That’s the structure used by ‘boutique investment firm’ Thackeray Walsh LCC to securitise the (future) income streams of an A-rated pool of youngsters.
Oh, not Europe again
Ah, Greece. Again. It’s just the way the European Commission tells ‘em – via Reuters (emphasis ours):
The European Commission called Slovakia’s decision not to participate in a euro zone bailout of Greece “unusual”
[MoneyTech] Data-feed arbitrage
The joint CFTC-SEC hearing into the ‘flash crash’ has attempted to shed a light on what may have brought about the infamous sell-off on May 6.
One area probed on Wednesday, in the regulators’ first session,
Markets Live transcript 12 Aug 2010
Markets Live chat transcript for the chat ending at 11:09 on 12 Aug 2010. Participants in this chat were: Miles Johnson, FT Joseph Cotterill Bryce Elder MJHello JCHi there