September, 2010
The legacy of fat bloke finance
This is London’s Centre Point tower, a (cough) architectural icon from the 1960s that sits at one end of Oxford Street.
Its owner is Targetfollow, a Norwich-based company that Lloyds Banking Group could force into administration as soon as Friday.
The Fed cometh like a thief in the night
It’s increasingly not if, but when, as far the market is concerned over the Federal Reserve’s most recent pronouncements on reviving quantitative easing.
But when is when? And what might answering that tell us about inflation?
Morgan Stanley’s monetary analysts — long-time inflation contrarians — had a helpful if cautious guide to the first question on Thursday:
R.I.P. European unsecured lending
FT Alphaville has talked about the vaporisation of unsecured lending in Europe, as well as the consequent impact on quality collateral via the rush towards collateralised lending.
But in case you didn’t believe us,
Existing home sales rebound from disastrous July
The NAR’s existing-home sales figures for August are out, having climbed after last month’s catastrophic report revealed one of the lowest monthly levels on record (for July).
But by historical standards,
More on the ‘Irish panic’
“Liability management” (or buying backbonds to capitalise on the fact they are trading at a fraction of face value).
That’s a phrase we could be hearing more of as the Irish government prepares to deal with Anglo Irish Bank’s €1.7bn of “controversial”
Katabasis in the market
In which the Greek crisis meets the perils of indexing.
The FTSE did its annual shuffling of world stock indices on Thursday.
This process firstly involved promoting the Czech Republic, Malaysia and Turkey to ‘advanced’ from ‘secondary’ emerging markets,
Money market funds meet moral hazard
Cast your minds back to August 2007, when money market funds were experiencing their first major crisis. It was far less sexy than what was to follow in September 2008 — when Reserve Primary notoriously broke the buck and sent money markets into panic — but it was one of the earlier manifestations of the credit crunch.
Hindenburg sighted… on Bloomberg
Oh, the humanity! Oh, the HIND <GO>! Which function gets you, err, this when you tap it into your nearest Bloomberg terminal, as of Thursday:
Which are, of course, the components of the Hindenburg Omen indicator — allowing you too to watch for signs of a market crash.
The Ashes of O’Austerity
In addition to what’s now being called the ‘Irish Panic’ — after the market punched Ireland credit default swaps in the face on Thursday, following fears that Anglo Irish will be brought down by its subordinated debt — here’s another Gaelic headache.
Markets Live transcript 23 Sep 2010
Markets Live chat transcript for the chat ending at 11:18 on 23 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHSpivs NHGamblers
What price Betfair?
What valuation will the market put on Betfair when the online betting exchange lists on the LSE in a month’s time?
Based on the numbers released on Tuesday, a market capitalisation of £1.5bn looks very optimistic.
Ireland’s subordinated bond ATTACK!
Ireland may have forsworn a default on senior bank bonds — but the subordinated stuff could turn out to be a rather different story.
On Thursday morning, Irish bank CDS shot sharply up on [UNCONFIRMED] chatter of an imminent “Allied Irish default”
The great race (to the bottom)
Some further thoughts on the topic du jour — competitive currency devaluation and the race to the bottom.
In the wake of Tuesday’s FOMC statement, RBS FX analyst Gregg Gibbs reckons the chance of a major meltdown on the currency markets is increasing as investors seek the relative safety of higher growth regions — or ones that are not dropping notes from helicopters:
Frank Timis and the binary bet
Frank Timis might do a lot of good work for charity but that doesn’t mean the Chinese are going to sink $1.5bn into his iron project in Sierra Leone.
Oh no.
From RNS on Thursday morning:
African Minerals Limited (AIM:AMI),
Further reading
Elsewhere on Thursday,
- Do the RBS chicken dance.
- Lehman clutchbag, anyone?
- Vince was right!
- Why Ireland really is in trouble (but America isn’t).
- Hamp dies on the vine.
- The problem with century bonds…
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Shrink Germany’s problem banks
There are good banks, there are bad banks, and there is Westdeutsche Landesbank, writes the FT’s Gapper.
Snap news
Breaking pre-market news on Thursday;
- Frank Timis’ African Minerals says Tonkolili investment deal delayed – statement.
- Songbird Estates, owner of Canary Wharf, announces plans to raise £140m via equity issue — statement.
CRE-failed bank nexus, ongoing…
FT Alphaville has long been chronicling the damage that non-performing CRE loans have done to the balance sheets of small banks — contributing to an increase in bank failures, tighter lending standards,
US housing update
The FOMC and Larry Summers have been dominating the headlines, but this is also a busy week of news for the US housing market — so here is a brief overview of what we’ve learned so far.
On Monday, the National Association of Home Builders announced that its national housing market index,
The spirit is willing, but the banks are weak
“We need to … recognise, that in finance and economics, ill-designed policy is a more powerful force for harm than individual greed or error.”
— Lord Adair Turner, FSA chairman
Although perhaps there’s no policy more ill-designed than one that relies upon the judgement (and thus,
Now! That’s What I Call Capital Increase 2010
Deutsche Bank’s capital increase is turning out to be an increasingly big ‘issue’ for the German banking giant.
First, let’s point out that the bank is even branding the move “Capital increase 2010″
Potash sues BHP Billiton
Never mind what the Chinese are or aren’t doing with a counter-bid — here’s an odder twist in the tale of BHP Billiton’s hostile takeover battle concerning PotashCorp.
The target’s now filed a complaint in a Chicago court seeking to prevent BHP from carrying on with its offer,
Flowers: The decline of a dealmaker
It’s almost enough to make you wonder just how savvy those high-flying uber-deal makers of the 1990s and early 2000s really were — as opposed to how lucky.
Times change and so do the deals. But even with the chips down and the odds distinctly discouraging,
FSA reopens the Lehman files
Remember the just-who-is-a-sophisticated-investor debate around the Abacus case against Goldman Sachs earlier this year?
Here’s a strange UK coda.
The UK’s Financial Services Authority dished out not one but three fines on Wednesday to advisers which failed to give suitable guidance on structured products backed by Lehman Brothers.
Did nobody ever consider that indexing was dangerous?
Here’s one for a spirited debate.
A new paper from the National Bureau of Economic Research by Jeffrey Wurgler, Nomura professor of finance at New York University, discusses the potentially overlooked perils of indexing.
Mmm, Portuguese yield stew
Oh look, another European debt auction that was never going to fail.
Results from Wednesday’s Portuguese debt auction, via Reuters:
RTRS-PORTUGAL SELLS 450 MLN EUROS OF OCT 2014 BONDS IN AUCTION-IGCP
Markets Live transcript 22 Sep 2010
Markets Live chat transcript for the chat ending at 11:11 on 22 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHhola NHsalut
The $60m question
Someone, somewhere in Europe appears to have a dollar liquidity problem.
Consider Wednesday’s breaking news:
ECB ALLOTS $60M IN 7-DAY REFI OPERATION AT FIXED 1.18%
And then put in context.
(HT friendly broker).
24 hours in the sovereign debt market
Remember that ‘successful’ Irish bond auction on Tuesday?
Thought not.
Sovereigns – Greece 820bp (+15), Spain 240bp (+6), Portugal 385bp (+20), Italy 200bp (+8), Ireland 467bp (+33), Belgium 144bp (+1),