September, 2010
And it’s goodbye from Eric
Hankies at the ready.
Eric Daniels is leaving Lloyds. As the bank said in a release on Monday:
Eric Daniels, Group Chief Executive of Lloyds Banking Group, has informed the Board of his intention to retire in a year’s time.
Still stubbornly inverted
Joseph Abate at Barclays Capital sure loves a mystery.
Recently, he puzzled over why US GC repo rates were trading stubbornly higher than US unsecured rates…
But in his latest note, he points out that the Fed’s most recent balance sheet update not only fails to answer these questions — it also doesn’t explain surprising further shifts in the US repo market,
Markets Live transcript 20 Sep 2010
Markets Live chat transcript for the chat ending at 11:18 on 20 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder Paul Murphy NHHola NHAnother week, NHand another session of Markets Live
Homework for the Independent Banking Commission
Here’s some reading for the UK’s Independent Banking Commission, ahead of its first public appearance on Friday.
It’s an in-depth report from JP Morgan on the profitability of Lloyds Banking Group’s retail operations.
The renminbi’s release is speeding up
Now here’s a renminbi mystery.
Not only did the People’s Bank of China fix the USDCNY cross-rate lower for the eighth time running on Monday at 6.7110, versus Friday’s 6.7172 — the longest run of low fixes since October 2007.
Further reading
Elsewhere on Monday,
- In praise of inflation.
- Duration and perpetual debt.
- The U-shape of correlation.
- Finding alpha in REITs.
- A cameo for Nouriel Roubini.
- The gas-crude spread,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Tea with little sympathy for US
The Tea Party’s startling win in the Delaware Republican primary is a cruel blow to Grand Old Party hopes of gaining control in the US Senate,
Snap news
Breaking pre-market news on Monday,
- Safran confirms $1.09bn cash acquisition of L-1 Identity — statement.
- BAE acquires L-1′s counter-terror unit for $295m — statement.
- Petra Diamonds posts $70m pre-tax profit – statement.
FTfm on AV
Some highlights from Monday’s FTfm.
iShares launches swap-based ETFs
Until now, iShares has focused on delivering returns to investors by buying the constituents of a benchmark index. The new approach,
Guest post: El-Erian on an interesting week ahead
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, argues that this week will show Europe’s debt crisis and the global configuration of currencies returning to the fore.
________
This coming week will be an interesting one.
Can an ETF collapse?
By Andrew A. Bogan, Ph.D., Brendan Connor, and Elizabeth C. Bogan, Ph.D.
——-
Like many innovations in finance that emerge from nowhere to explode in popularity with unknown consequences, exchange-traded funds (ETFs) have gone from obscurity when they were first invented in 1993 to making up more than half of all the daily trading volume on American stock exchanges today.
Housing preview
You already know about the FOMC meeting meeting on September 21. Courtesy of Credit Suisse strategists, here is a quick preview of other things to watch for next week:
The majority of data next week predominantly focuses on the housing market,
Why does everyone hate Tarp?
Ahead of Tarp’s expiration on October 3, a number of commentators and bloggers this week have been discussing its failure — not the failure of its performance, but of its public image to reflect its performance.
A year in the life of sovereign CDS
With Ireland spreads widening on Friday, it’s an apt time to turn to Fitch’s latest edition of its annual survey of credit derivative traders.
Not least because it offers some revealing insights on how sovereign CDS contracts are actually used in the market. Or at least,
An Irish covered-bond warning
This is why Barclays Capital’s warning over Ireland’s medium-term debt sustainability matters. Note that phrasing. Ireland will not be going to the IMF tomorrow — but there’s more uncertainty in the next few years.
Inflation offers no excuses
The August consumer inflation numbers for the US have arrived, and they look a lot like July’s:
No surprises here. As we commented in August (and as IMF research has shown), this kind of disinflationary trend — scraping against the boundary of deflation but not quite plunging through it — is common after prolonged growth slumps.
Dear Paulson investor… et al
Boing. This month, through to the 10th:
Paulson Advantage +5.03%
Paulson Advantage Plus +7.5%
Just in… some more ambulance chasing August equity market victims:
Lansdowne UK Equities – $7.5bn - (3.03%) ytd:
When Irish spreads are widening, redux
From the annals of great Reuters flashes:
RTRS-IRISH PM COWEN SAYS WILL BE A BIT MORE CAUTIOUS ABOUT HOW HE CONDUCTS HIS SOCIAL LIFE
Although Brian Cowen probably has more pressing concerns by now.
Markets Live transcript 17 Sep 2010
Markets Live chat transcript for the chat ending at 11:23 on 17 Sep 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHTFIT NHIt’s 11.03am
China, 1789 and potash
What caused the 1973 spike in oil prices? The Opec embargo?
Wrong, according to SocGen’s Dylan Grice — who reckons it was merely the trigger. The cause was actually structural: a rapid surge in the import needs of the USA:
They think it is all over…
… it is now.
Well, sort of.
We are hearing KNOC and its advisers Merrill Lynch swept the market for a 29.9 per cent stake in Dana Petroleum on Friday morning. The trades haven’t printed yet but they will.
Desperately seeking income
In common with many investors, pension funds have a problem, which can be summed up in the following two graphics from UBS:
For a variety of reasons (two bear markets in a decade, the boom in liability driven investing and so on) pension funds and other institutional investors have slashed their weightings of equities and bulked up in bonds in the past quarter of a century.
No sovereign is safe
Some consolatory reading for the Greek… Irish… and Portuguese finance ministers on Friday. Citigroup chief economist Willem Buiter has taken a long hard look at other developed sovereigns — and has used the opportunity to remind that no sovereign is safe.
PotashCorp MBO, or the ‘white platypus’ solution?
One “can’t help but marvel at the convolution of the bid being assembled for Potash Corp of Saskatchewan,” notes DealJournal, citing a report in Canada’s Globe and Mail newspaper on moves to assemble a Chinese-led consortium “with touches of Canadiana”
Brent’s got its problems too
We’ve documented the problems associated with the Nymex WTI crude contract regarding the onset of contango and Cushing syndrome in the US .
But as the CME Group — owner of the Nymex — has pointed out to us (in defence),