September, 2010
And you thought we were bearish
How best to summarise this long, depressing outlook on the global economy by Nouriel Roubini and Ian Bremmer? We’ll give it a shot.
First, no matter who you are, you are too optimistic:
However, as we all know from human experience,
Bonds, breaking for the Swiss border
Tinned food? Check. Bunker? Check. Emergency smokes? Check.
Rolex watch, Toblerone, fondue kit, cuckoo clock? Check.
There’s a very Swiss theme to this week’s European Credit Alpha note from Barclays Capital.
On the basics of how to tax banknotes
As documented by FT Alphaville, Willem Buiter has a thing for negative interest rates.
Most recently he’s been touting the idea again, this time in an opinion piece for the Wall Street Journal.
Leaving the economic case for negative interest rates aside for a minute,
Vale and potash: ‘I (only) half believe them’
The Chinese – and more specifically, Sinochem – gained a respite this week from frenzied counter-bid speculation surrounding BHP Billiton’s hostile bid for PotashCorp, following a $1.75bn bond issue by Brazilian mining giant Vale.
Delta One is the HOT new area for banks
FT Alphaville has written about the rise of Delta One and equity derivative divisions before.
But here’s further proof that banks are now increasingly setting themselves to profit from their Delta-One departments — divisions like the one Jerome Kerviel at SocGen worked for.
Markets Live transcript 10 Sep 2010
Markets Live chat transcript for the chat ending at 11:18 on 10 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHIt’s Friday NHand 11.03am
Happiness is a warm desk and ‘firm culture’ at Goldman
Surely it couldn’t be the money that makes people happy? The blogosphere is alternatively bemused and cynical about the results of an online survey posted by careers consulting site Vault.com which found – surprise surprise – that Goldman Sachs is the best financial firm to work for,
When Cushing syndrome strikes…
The WTI super-contango is back, which incidentally also implies the inevitable return of so-called ‘Cushing syndrome’ - a term nicely coined by JBC Energy, as it happens.
On Thursday, US inventory data showed that Cushing stocks — the delivery point for WTI futures – fell last week by 330,495 barrels to 37.6m,
What has caused the Rightmove? (updated)
This share price spike in Rightmove, the UK’s leading property search website, has caused some head scratching in the Square Mile on Friday morning.
But it is easily explained – a French rival has received a bid.
The great European bank rights issue guessing game
If you’re wondering who might follow the lead of Deutsche Bank and tap its shareholders for cash this table should help.
Source Merrill Lynch:
Basically everyone on that list might need a cash call (except National Bank of Greece which,
Where have all the direct bids gone?
Thursday’s US 30-year Treasury auction proved more telling than might have been expected.
As Reuters reported (our emphasis):
NEW YORK, Sept 9 (Reuters) – An auction of $13 billion of reopened 30-year bonds <US30YT=RR>
Guest post: Michael Stumm on FX trading leverage
The chief executive of OANDA, Michael Stumm, discusses the recent US regulatory crackdown on outlandish leverage ratios offered to currency speculators.
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The Dodd-Frank Wall Street Reform and Consumer Protection Act as signed into law on July 21st of this year,
Further reading
Elsewhere on Friday,
- Wall Street’s psychic.
- All that glitters must be silver.
- Deutsche kills two birds with one cash call.
- Not your father’s recovery?
- The magic income number.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Europe heads for Japan-style irrelevance
If Europe feels small it is because the EU’s leading members are much diminished,
Snap news
Breaking pre-market news on Friday,
- Nokia appoints Microsoft’s Stephen Elop as its new CEO — statement.
- Morgan Sindall acquires majority of Connaught contracts — statement.
- Petropavlovsk to list non-precious metals unit in Hong Kong in October — statement.
Rubin, Prince seemingly under scrutiny
Bloomberg does its homework and finds something intriguing in an SEC court filing on Wednesday, as the agency defended its decision to settle charges with Citigroup for $75m.
Reports Bloomberg (emphasis ours):
More on the US trade figures and global imbalances
Thursday’s US trade report from the Census Bureau brought some welcome news, though it’s probably best not to get too excited just yet.
Exports resumed growing again after a slight dip in June, while imports declined by $4.2bn.
Opportunities from the covered bond dislocation
SocGen analysts have turned their attention to the dislocation in covered bond prices vis-a-vis secured lending rates and government bonds.
Just as BarCap noted before them, they observe how “rich” covered bonds are currently trading with respect to the other markets.
Save our shorts, redux
Now here’s something you don’t see every day — calm evidence-based, consideration of the impact of short-selling (and thus, rules that prohibit short-selling, conversely) on the price and volatility of stocks.
Keep your fiscal friends close…
On the eve of a vast UK government review of spending cuts this autumn, Robert Chote has been tipped for the prestigious post of abattoir inspector chairman of the Office for Budget Responsibility.
And well,
Duelling indicators on US unemployment
At this point, we may as well throw our hands in the air and give up trying to figure out in which direction US employment is trending.
Weekly unemployment insurance claims posted a big decline for the second time in the last three weeks on Thursday,
Central banks are depressing (yields)
Stephen Lewis at Monument Securities is trying to rationalise the ultra-low state of government bond yields.
It all started on Wednesday, when he pointed out that current long-dated yields in the US and in the UK are now lower than they were during the Great Depression.
Kill the old, deflation edition
Morgan Stanley economists always have such interestingly contrarian views on the inflation-deflation debate. For example – Joachim Fels’ unfashionably inflationista analysis of central bank credibility.
That ol’ dependable 0.5 per cent, at the BoE
Noted for the record (again) on Thursday — the Bank of England’s latest decision to make sure the song remains the same:
Related link:
Caught between Scylla and Sentance – FT Alphaville
China, Japan and the intervention two-step
At last, a chance for browbeaten Japanese finance ministers and bureaucrats to recover some mojo — and blame someone else for the yen’s seemingly irrepressible rise.
After yet another dismal round of promises by Japanese officials to act to curb the currency,
Markets Live transcript 9 Sep 2010
Markets Live chat transcript for the chat ending at 11:22 on 9 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHello there market fans NHand welcome to Markets Live
Invitation to Tea@theFT
A once in a life time offer. Unlikely to be repeated.
Do you day trade?
Do you take a short view when investing?
Do you trade in a range of asset classes on a short term basis?
If the answer to any of these questions is yes,
Goldman anticipates QE2 dollar weakness
In a further sign that Goldman is putting all its eggs in the QE2 basket, the bank’s FX team was also out on Thursday, recommending quantitative easing-related dollar weakness positions.
As the team headed by Thomas Stolper wrote in a September note:
FSA fine watch
Another day and another fine from the Financial Services Authority.
This time it’s Goldman Sachs on the receiving end. A £25m hit (reduced to £17.5m for good behaviour) for the heinous crime of not telling the FSA it was being investigated by the SEC over the Fab Fabrice/Abacus CDO case.
Basel backtracks
So near, and so far, Basel.
Australia’s Banking Day had the basic numbers overnight on what looks to us like a last-minute climbdown on bank capital:
Australian banks are unlikely to face any problems meeting Basel III capital hurdles after several key capital ratios were eased in Tuesday’s meeting of the Basel Committee…