September, 2010
All aboard the QE2 – double or quits
To sail upon the great world cruise of QE2, or not? – that is the Fed’s question.
One thing that is sure, the FOMC’s policy statement on Tuesday opened the door to the option of more quantitative easing in the near future.
El Erian: The Fed, as expected…
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, examines the Fed’s central message in Tuesday’s FOMC statement and notes the next few days in the markets will reveal more about its impact.
Further reading
Elsewhere on Wednesday,
- An oversight on oversight.
- The education of a trader.
- Predicting the Nobel.
- Replacing Summers.
- Home equity is the giant elephant in the room.
- The ghosts of earnings past.
Pink picks
Comment and analysis from Wednesday’s FT,
Martin Wolf: Wen is right to worry about China’s growth
“In the case of China, there is a lack of balance, co-ordination and sustainability in economic development.” Who dares to make such a downbeat assessment of the world’s most dynamic economy at a gathering of influential foreigners in the heart of China itself?,
Snap news
Breaking pre-market news on Wednesday,
- Xstrata closes $4bn revolving credit facility — statement.
- Western Coal reaffirms intention to list on main market — statement.
- Redhall acquires Mount Engineering for £16.42m — statement.
FOMC follow-up
It didn’t take long for a narrative to emerge in the aftermath of the FOMC statement: the Fed is preparing to pursue fresh QE measures soon in spite of not having done so this time round.
The market seems to agree with this,
The view from investors
Sure, the NBER says the recession ended more than a year ago, but we all know the economy remains in uncertain territory.
And what do investors think? According to Bloomberg’s latest quarterly poll,
FOMC statement
The FOMC’s new statement is out, and the only real change from the August version has to do with inflation, which is “below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.”
Petropavlovsk & Sons
Petropavlovsk is a curious company.
On Tuesday the Russian miner issued the prospectus for the listing of its non precious metals business on the Hong Kong stock exchange. This, remember, is a business the company has already spun off once (on the London Stock Exchange) and bought back so the parent company could access its cash.
Further reading (for the IBC)
More bedtime reading for the UK’s Independent Banking Commission; this time from research house Autonomous.
The report was referenced in Tuesday’s Wall Street Journal as a curtain raiser to the publication on Friday of the IBC’s ‘Issues Paper’.
[Modern Football Finance] Something rotten in British football
A speech by Paul Marshall, the co-founder of Marshall Wace, (and Manchester United fan) to the Liberal Democrat autumn party conference on Monday night.
(Warning — it’s long.)
——
We are convening in the home town of one of the greatest English football clubs – in fact I would go as far as to say the second greatest.
Those bund-lengthening pension funds
You remember the summer’s flattening of the yield curves, don’t you?
It was especially pronounced on bunds — as late as August 25, for instance, the 2-year and 30-year parts of the German yield curve flattened to about 215bps:
God loves, man fiddles
Someone hasn’t been reading Matthew 6:24. From Reuters on Tuesday:
The head of the Vatican bank Ettore Gotti Tedeschi has been placed under investigation by Rome magistrates for suspected money-laundering by the bank,
Mmm, Greek yield moussaka
This was an interesting Greek debt revelation on Tuesday:
(Reuters) – Foreign investors bought most of Greece’s issue of 3-month T-bills auctioned on Tuesday, the head of the country’s debt agency (PDMA) told Reuters.
Markets Live transcript 21 Sep 2010
Markets Live chat transcript for the chat ending at 11:18 on 21 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHello there NHand welcome to Markets Live
Betfair is, well, a fair bet
Now here’s an online-based IPO that sane investors could actually consider backing.
From RNS on Tuesday morning:
Betfair today announces its intention to apply for admission to the premium listing segment of the Official List of the UKLA and to trading on the main market of the London Stock Exchange (“Admission”) and to proceed with an initial public offering of Shares (“the Offer”).
Ireland’s debt sale — well received, thank you very much
Results of Ireland’s highly watched bond auction are out, and the news is double-edged.
Yes, Ireland did get €1bn of 2018 and €500m of 2014 bonds sold, but the country had to pay handsomely to get the debt away.
Guess the bidders – Wellstream edition
At last — some de-equitisation.
From RNS on Tuesday:
The Board of Wellstream has noted the movement in its share price and confirms that it has received a number of preliminary approaches regarding a possible offer for the Company.
Further reading
Elsewhere on Tuesday,
- The shocking lack of gold volatility.
- Brooklyn meets Berkshire.
- Seven more years of hard times?
- Threshold effects.
- Interview with the president.
- Is the new Vix pit a contrary indicator?
- On the irreconcilable differences between the US and Japanese household.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Hysteria will not help Roma
The EU has plenty to worry about: debts, wobbling banks, declining influence, a war in Afghanistan,
Snap news
Breaking pre-market news on Tuesday;
- Wellstream has received a number of takeover approaches — statement.
- Betfair announces intention to float on LSE; reports adjusted EBITDA of £53.5m for the year to April 30,
Choppiness continues for CRE
Moody’s on Monday released the latest update of its commercial property price index. According to the rating agency’s proprietary index, June’s woes continued through July and prices have nearly fallen back to their recession lows:
Staying on target
The FOMC meets on Tuesday, and a discussion has broken out among the commentariat over the potential efficacy — and political viability — of the Fed’s setting a higher inflation target.
Tyler Cowen argues an inflation target of 3 per cent would effectively boost spending and reduce the real value of debt,
The once and future sovereign crisis
From the annals of is-that-really-the-story-here Bloomberg headlines:
Europe Debt Crisis Abates as Traders See Yield Spreads Narrow
Talk about a fisking opportunity. Needless to say, the crisis isn’t abating.
The Great Recession was so 2009
The Business Cycle Dating Committee of the National Bureau of Economic Research has arbitrarily declared something of little real import announced that the Great Recession in the US officially ended more than a year ago (emphasis ours in all excerpts):
The descent into global C-H-A-O-S
It’s Monday and time for another helping of doom and gloom from Albert Edwards.
This week SocGen’s ‘strategiste global’ is in particularly bearish mood, arguing that all of the ingredients are now available for a meal of global chaos.
Access denied?
Is that what Goldman’s Erik Nielsen means when he talks about losing access to the market?
The Irish 10-year bond yield has reached danger record levels on Monday:
Meanwhile, Patrick Honohan,