September, 2010
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Why 9/15 changed more than 9/11
America commemorates two grim anniversaries this month: 9/11 and 9/15. Almost a decade has passed since the Twin Towers attacks transformed America’s relations with the world;
Unemployment and the labour force
The San Francisco Fed looks at an issue that is important to understanding the US unemployment problem but often is neglected in broader debates over cyclical vs structural influences.
The labour force participation rate is the percentage of the total working-age population that is employed or looking for work.
A nightmare scenario
Here is a disturbing, though not unfathomable, possibility envisioned by Economics of Contempt:
Let’s say the European sovereign debt crisis flares up again, and one or two Euro banks fail. (Not a bank like UBS or Deutsche Bank,
Momentum, value, and the long term
Included in last week’s thoughtful paper by Andrew Haldane, the Bank of England’s executive director of financial stability, was this chart:
The chart purports to show the advantage of a momentum investment strategy against a value strategy with a one-month holding period,
Whatever happened to the Hindenburg Omen?
It’s now been just over a month since the first sighting of the Hindenburg Omen — the fearsome indicator which supposedly foretells stock market crashes.
It does so by counting the number of NYSE stocks making new highs and new lows simultaneously.
We are all ostriches now
More on global demographic time-bombs, this time from Deutsche Bank, which has stumbled upon a potential answer: mass migration from the developing to the developed world.
Writing in the latest edition of Deutsche’s Long-Term Asset Study,
Basel, behind the Maginot Line
It’s not the capital, it’s the liquidity. It’s not the Maginot Line; it’s how many Panzers are pummelling through the Ardennes beside it.
And thus it’s not Basel III; it’s what banks will do — and where they will find the liquidity and the counterparties to do so — to get around it.
HP heads back unto the (M&A) breach
Ho hum. Another day, another Hewlett-Packard bid…
The acquisitive US tech giant is nearing a deal to buy US security software maker ArcSight, fresh from its $2.35bn victory in a bidding war against Dell for data storage company 3Par,
Instability, greed and selfishness and the City (updated)
Here’s an entertaining rant from veteran City fund manager Barry Olliff.
It can be found in the annual results statement of City of London Investment Group, as Olliff spells out why the guidelines on pay in the Walker report are wrongheaded,
MOST: Why you should be buying dividend futures
FT Alphaville noted last week how dividend futures were still clawing back ground they’d lost on the back of the May 6 flash crash.
With this in mind, Graham Secker’s team at Morgan Stanley have put out a note suggesting there’s currently a strong investment case for index dividend futures or swaps.
Basel III — the analysts react
The FT Alphaville inbox is getting chock-full of analysts reacting to the confirmation of Basel III’s new rules revising bank capital ratios.
So here — in due fashion — is the best of the best for our readers.
Markets Live transcript 13 Sep 2010
Markets Live chat transcript for the chat ending at 11:24 on 13 Sep 2010. Participants in this chat were: Neil Hume, FT Joseph Cotterill NHgood morning NHand welcome to a Markets Live
Short term capital management
From Morgan Stanley’s global banking analysts on Monday morning.
A big positive for US and other strongly capitalized banks and suggests buybacks could be larger and occur sooner than currently expected.
Why increased correlation could be bad for IBs
JP Morgan’s most recent note on the future of investment bank wallets is so good, we’ve decided to quote some other interesting findings from it. (It does, after all, run to 176 pages.)
One area that analyst Kian Abouhossein looks at,
Breaking up Pru is hard to do
Prudential is sitting at the top of the FTSE 100 leaderboard on Monday morning:
The rise has been triggered by a Sunday Times article which claimed a group of Chinese investors are considering a break up bid for Pru.
Bob’s Petroleum
The incoming boss of BP has been striking a confident tone in recent meetings with City analysts.
The message that Bob Dudley has been keen to convey is that BP is financially sound, the provisions made against the costs of dealing with the aftermath of the Macondo spill should cover the liabilities,
News Corp’s little bundle of joy
We’ve said before that getting this deal done wouldn’t happen any time soon, even in Europe.
But there are signs that News Corp’s bid to buy out BSkyB might end up ruffling feathers closer to home — and this time could end up getting it blocked altogether.
Jobs and the City…
Whether you’re an increasingly impecunious chief executive at a mid-ranked UK company, or one of the City’s increasingly flush “AVPs” (assistance vice-presidents), some – interestingly timed – reports on Monday are telling us a few things.
Further reading
Elsewhere on Monday and at the weekend,
- Basel III arrives, the Salmon view.
- What ‘Ace’ (Greenberg) said about ‘Jimmy’ (Cayne).
- Macro strategists soon won’t matter any more.
- China, Japan,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: We have failed to muffle the banks
If US President Barack Obama and the Democrats are punished as brutally in the mid-term elections as seems likely,
Snap news
Breaking pre-market news on Monday,
- Tullow Oil confirms major oil find off Ghana – statement.
- Unicredit says has received potential offer for MCC unit – statement.
- BAE Systems mulls platform solutions sale – statement.
FTfm on AV
Some highlights from Monday’s FTfm.
SWFs eye domestic advantages
Sovereign wealth funds are increasingly seeing themselves as sovereign development funds and are exploiting their overseas investments to contribute to economic development back home.
Basel III has landed — full details
It’s here, finally. With a minimum bank capital ratio of 7 per cent.
The world’s central bankers and regulators confirmed new capital and liquidity standards for the banking system on Sunday.
Here are the all-important details on both the reforms’ substance and their implementation dates, via the Basel Committee release.
BP: not good enough for FTSE4Good
A slap on the wrist for BP on Friday, from index compiler FTSE:
(Reuters) – BP is to be evicted from the FTSE4Good ethical investment index due to its Gulf of Mexico oil spill, index compiler FTSE said on Friday,
Testing the sovereign-bank loop
As we watch for signs of reawakening European sovereign fears, here’s an interesting pair of charts to ponder, courtesy of Markit:
And as Markit credit data analyst Lisa Pollack observes,
2010: the year of collateral
Since the Lehman crisis, collateralisation has never really been the same.
On the one hand more attention than ever is being paid to the quality of collateral being pledged by institutions; and on the other hand,
More reasons to kill the old
A companion piece, of sorts, on the merits of killing the old.
Morgan Stanley’s analysts recently made a diverting little demographic case against deflation ever entrenching itself in the West. While this did happen in Japan,