September, 2010
Goldbugging
Back in May, Barry Ritholtz posted an interesting chart of the S&P 500 priced in gold:
The chart shows that the last 10-year period of gold outperformance was followed by a lengthy 20-year period of underperformance.
Missing links
We’re just making our way through the new BIS quarterly review, but here’s a lovely piece of chart porn that caught our eye:
And here’s what it shows (emphasis ours):
First, capital flows saw a phenomenal reversal in the wake of the recent crisis (lower panels),
Dividend Black Friday
By now, most investors the world over will be aware of the disruptive events that occurred on May 6 — a day that has come to be known as the ‘flash crash’.
What most investors might not be so well aware of,
Mmm, European yield stew
The bright side of bulging peripheral bond-bund spreads, courtesy of the strategists at Nomura (emphasis ours):
…as central bank policy provides more substantial support for the economy – especially via extensions of QE and liquidity measures – we see increasing carry opportunities in higher-yielding assets,
Basel Schadenfreude
Was this the day bank stocks died?
Sighted in Tuesday’s market – a much bigger Basel III attack than on Monday’s victim, Barclays.
That’s from unconfirmed details of the precise calibrations Basel will bring to bear on banks’ Tier 1 capital and Core Tier 1 capital,
De La Rue: licensed to kill money (Updated)
Oh my.
The goings on at the world’s banknote printer of choice, De La Rue, are beginning to take on mystery thriller dimensions.
In July, CEO James Hussey stepped down due to a problem with the firm’s paper production specifications — now resolved.
These are the voyages of the starship QE2
This is a Vulcan death grip:
And according to SocGen’s über-bear Albert Edwards, that’s exactly the state in which equity investors find themselves in now.
Or as he puts it (our emphasis):
The current situation reminds me of mid 2007.
Markets Live transcript 7 Sep 2010
Markets Live chat transcript for the chat ending at 11:20 on 7 Sep 2010. Participants in this chat were: Neil Hume, FT Joseph Cotterill NHHola NHIt’s 11.03 am NHand time for another session of Markets Live
As ye stress-test, so shall ye reap
The folly (via the WSJ)…
The template asked for banks to disclose their “gross” and “net” exposures to sovereign risk in each E.U. country. Most banks’ disclosures didn’t define “gross” and “net” beyond saying that the latter were “net of collateral held and hedges”…
Mining taxes, yen rates — or, when politics matter
The uglier – and in some cases, the more ridiculous – a country’s politics become, the more serious become some of the issues.
At least, that would seem to be the lessons from Australia and also Japan,
Goldman still expects a further $1 trillion of QE
More Bah! Humbug! from Goldman’s chief economist Jan Hatzius.
Although last week’s economic data makes a big “QE2″ announcement from the Fed unlikely at the September 21st FOMC meeting, Hatzuis still believes more unconventional monetary easing is on its way,
About that Ocado short squeeze
Er, is that it?
Anyone expecting Tuesday’s trading statement from Ocado – its first as a listed company – to trigger a big short squeeze is going to be disappointed.
In fact, all we have learnt is that the high-profile flotation did not boost sales.
C(onn)aught out for the last time
Sad to see this one go after Sir Roy Gardner struggled to turn it around.
Nevertheless, it’s tombstone time for Connaught (Ticker — CNT):
And Connaught’s statement on its suspension:
On 29 July 2010,
Further reading
Elsewhere on Tuesday,
- G’day, Julia.
- The faults of limited liability.
- Who’s the Old Maid in global trade?
- Shadow banks, out of the shadows.
- A downer on commodities diversification.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Sweep economists off the throne
When Paul Krugman, a Nobel prize-winning economist, clashed with Niall Ferguson, a famous historian (and FT contributing editor),
Snap news
Breaking pre-market news on Tuesday,
- Connaught shares suspended; BBC says company on the bring of administration – statement, statement and report.
- Barclays says Robert E Diamond Jr to be its new CEO – statement.
Why yes, August was rubbish
File this one in the (bulging) ‘no one ❤ stocks’ archives.
August in London, according to the London Stock Exchange:
In August, 15.6 million trades were carried out across the Group’s equity electronic order books,
Crash and burn, or when F1 meets FX
Vroom!
That’s the speed at which retail punters can be parted from their money on one of the many forex trading platforms that have sprung up in the past decade.
And now you, dear readers, are being offered a slice of the action.
More Anglo Irish candour
Spot the odd one out in this bevy of Irish credit spreads on Monday — chart and data courtesy of Markit:
That’ll be Anglo Irish Bank CDS taking off towards 700bps, leaving both peers and sovereign behind — and opening another exteeeended issue in Irish banking.
Making BP and big oil beautiful
Those of uncharitable disposition might sum up BP’s strategic response to the Gulf of Mexico disaster as follows: remove the Brit with the funny accent and install a Yank as CEO. (And, of course, flog off some assets to help pay for the spill).
Back to the future in shorting Spain
Back in May, at the peak of the European sovereign debt crisis, the Spanish stock market regulator announced it would ramp up rules on the disclosure of short positions on Spanish stocks from June onwards.
Markets Live transcript 6 Sep 2010
Markets Live chat transcript for the chat ending at 11:23 on 6 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHand welcome to Markets Live
Macquarie Bank: desperately seeking swagger
That old affluent sparkle seems rapidly to be wearing off Australia’s once seemingly teflon-coated Macquarie Bank – especially after the unthinkable happened and MacBank, once dubbed the “millionaires’ factory”
Pondering last week’s bond sell-off
Could it be that the epic run in government bond prices has finally come to an end?
For example this was the action in the yields of US, German and UK government ten-year debt last week:
But as Marc Ostwald of Monument Securities notes in an early Monday email,
A revisionist history of the week begining Aug 30, 2010
There’s no pleasing some people.
You might have thought last week was a good one for data what with the ISM and payrolls numbers beating expectations. But it wasn’t, according to Jan Hatzius, the chief US economist at Goldman Sachs,
Further reading
Elsewhere on Monday,
- Krugman says it’s all downhill from here.
- How dead economic theories persist.
- Here we go again on the European debt crisis.
- Print money and be damned!
- Roubini says there’s no defence against a double-dip.
Pink picks
Comment, analysts and other offerings from Monday’s FT,
Wolfgang Munchau: Don’t believe talk about European solvency
While the Europeans are celebrating the end of the financial crisis, something strange is happening in the bond markets,
Snap news
Breaking pre-market news on Monday,
- India’s GTL cancels tower merger plan with Reliance – via Reuters.
- France Telecom’s Polish unit hit with €396m fine — statement.
- Clapham House Group says offer talks still ongoing — statement.