October, 2010
Chinese FX intervention in perspective
One way FT Alphaville has been covering the great Currency War of 2010 is by keeping a running list of recent sovereign interventionists.
But one issue that comes up time and again in doing so, is just how you treat the impressive array of constant interventionists — i.e.
Taxing times for MBS
Back in the 1980s — when Lewis Ranieri was still fighting for the legal status of MBS — something seminal happened for the mortgage securitisation market.
The Tax Reform Act was passed by the US in 1986,
QE-stion marks
QE-stion: when is quantitative easing not quantitative easing?
Answer: when it’s quantitative policy.
Some interesting thoughts on QP from UBS today, saying that the distinction matters (emphasis ours):
Sacrificing servicers on the altar of Hamp
We like to think of the foreclosure scandal as Hamp on super-steroids, with a hefty dose of litigation and structured finance for added fun.
Recall that the US administration’s mortgage modification program was aimed simply at keeping people in their houses.
JP Morgan Q3 EPS beats expectations at $1.01
JP Morgan kicked off the third-quarter bank earnings season on Wednesday with a better-than-expected set of results.
Earnings per share came in at $1.01 versus a market consensus of $0.90, largely down to lower loan losses in its retail and credit card units.
The $560m question
From ‘who is it?’ to ‘who are they?’ and ‘how much?’
After a period of sending a piffling $60m a week to one European bank at its regular dollar tenders, the European Central Bank has now provided $560m to two institutions:
Markets Live transcript 13 Oct 2010
Markets Live chat transcript for the chat ending at 11:18 on 13 Oct 2010. Participants in this chat were: Neil Hume, FT Joseph Cotterill NHhola NHit’s 11.03am NHand welcome to Markets Live
Stump it up, Bob
Related link:
Standard Chartered is off to the capital races – FT Alphaville
25 interventions in a one week band, redux
Keeping up with currency wars can be a busy business.
It’s time, therefore, to give our already extensive intervention list, originally compiled on September 28, an update. And check out the emerging market entrants.
Standard Chartered is off to the capital races
Sheesh. How much money does one bank need?
Out on Wednesday — a £3.25bn rights issue from Standard Chartered.
It’s rather a surprise. StanChart undertook a £1bn share issue, also for capital-raising purposes,
The acrid stench of burnt fingers – Falklands oil edition
Investing in small-cap oil stocks is not for the faint-hearted.
The price action in Falklands explorer Rockhopper on Wednesday morning:
Can’t you just smell those burnt fingers?
The reason for the sell is a Competent Persons Report on Rockhopper’s Sea Lion discovery,
Further reading
Elsewhere on Wednesday,
- Hedge fund transparency – be careful what you wish for.
- Solutions to the foreclosure scandal.
- More than you probably ever wanted to know about MERS
- Barney Frank,
Pink picks
Comment, analysis and other offerings from Wednesday’s FT
Martin Wolf: Why America is going to win the global currency battle
Currencies dominated this year’s annual meetings of the International Monetary Fund.
Snap news
Breaking pre-market news on Wednesday,
- Standard Chartered announces £3.25bn rights issue, terms are 1-for-8 at £12.80 a share — statement.
- Terry Smith to retire as director of Collins Stewart — statement.
Inflation targeting and the FOMC
The FOMC minutes didn’t reveal much new about the committee’s asset-purchasing plans for November. They indicated that a consensus had formed around the need for more, but the markets already knew that.
FOMC minutes
The Federal Open Market Committee has released the minutes from its meeting on September 21.
That was the meeting in which the Fed changed its language on inflation levels, writing that they were “below those the Committee judges most consistent,
Small business outlook: still grim
Not much surprising in the NFIB’s small business survey for September — the main optimism index moved up slightly but remained in roughly the same (recessionary) range as it’s been for more than a year.
Gold-man Sachs: ‘We love gooooooold’
Sorry, we struggle to remember. Did Goldman Sachs have a longstanding QE2 view?
Oh yeah, right. Silly us. How could we have forgotten any of the following*:
Goldman calls for QE2.
Goldman anticipates QE2 dollar weakness.
Quote du jour, central bank uncertainty edition
Oh, there’s some sort of typo in this speech from Bank of England monetary policy committee member, David Miles. And right at the interesting — inflationary — bit.
The thinking man’s dash for Euro-yield
Having told investors to buy up high-yielding Irish sovereign debt in September, Nomura’s analysts have come up with more discerning approach to protecting yield in a world of low, QE-struck core rates.
The rush to EM
Here’s a chart that can be a source of either encouragement or worry — or both:
Courtesy of Real Time Economics, the chart shows the growth of Chinese and Brazilian credit card balances:
In 2009,
The non-accountant at the IASB
Call off the search. After a year-long global quest and the examination of more than 300 applications, the International Accounting Standards Board has found its man.
And he’s not an accountant. He’s this man:
The killing joke
This can’t be real, can it? Although — please let it be real. At any rate, behavioural finance mavens should enjoy this one.
From the abstract of a recent SSRN paper from Gabriele M. Lepori of Copenhagen Business School (emphasis ours):
The MBS mess from the beginning – the deal docs
Mike Konczal at Rortybomb, has a quick rebuff for anyone who thinks the foreclosure scandal is creating a mountain out of a molehill (of mortgage paperwork).
It’s this pooling and servicing agreement for GSAMP Trust 2006-FM1.
Considering a commodity investor’s break-even rate
Olivier Jakob analyst at Petromatrix notes on Tuesday that open interest in overall crude oil futures on both the Nymex and ICE exchanges reached an all-time high of more than 3m contracts last Friday:
The QE2 passenger list
Via RBS on Tuesday, and ahead of September’s FOMC minutes — a handy chart guide to the Fed board’s QE-easy inclinations:
… and a reminder that the doves pretty much have the votes sewn up.
QE-easy on commodities too
We’ve already posted about how investors are front-running the Fed, which is to be expected, but have they gotten ahead of themselves as well?
In agreement with those queasy Barcap analysts, economist James Hamilton thinks the market is already pricing in a huge amount of extra asset purchases (emphasis ours):
Deutsche on the liquidity trap – and the last hurrah
Quantitative Easing v2.0 is almost entirely expected, at this point.
But it’s also something else, according to Deutsche Bank. It’s one last chance to avert a real liquidity trap and — intriguingly — to avert a retirement industry crisis.
Markets Live transcript 12 Oct 2010
Markets Live chat transcript for the chat ending at 11:24 on 12 Oct 2010. Participants in this chat were: Tony Tassell Joseph Cotterill TTGood morning all TTa special session of markets live today
No respite for Autonomy
Shares in the software company were down again on Tuesday in London. In fact, they were the biggest faller in the FTSE 100 at pixel time:
One factor behind the latest slide is a downgrade from Deutsche Bank.