October, 2010
Magnus vs Donovan: The emails
Here’s an interesting promo for the new book by UBS senior economic adviser, George Magnus.
To drum up a bit of attention for ‘Uprising: Will Emerging Markets Shape or Shake the World Economy?’ the Swiss bank has released a selection of internal emails between UBS economists (that would be Paul Donovan and Magnus,
Supporting Greece, for longer
Ancient Greece famously had a few wars that went on a bit longer than any one really planned for. Peloponnesian Wars, Trojan Wars and so on.
Modern Greece, of course, has its debt crisis and bailout.
Markets Live transcript 18 Oct 2010
Markets Live chat transcript for the chat ending at 11:12 on 18 Oct 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHola NHand welcome to Markets Live
AIBaiting
Irish bank bail-out outrage du jour comes courtesy of Guido Fawkes.
The British political blogger has unearthed a purported copy of Anglo Irish’s foreign bondholders as of October 15 — quite a feat given Ireland’s finance minister Brian Lenihan once said he was unable to do the same.
The Kurdish cash guzzler
It’s an expensive business drilling for oil, particularly in Kurdistan.
Having raised $165m less than four months ago, Gulf Keystone Petroleum has tapped its shareholders for more cash – this time it $170m at 140p a share.
Bienvenue en France (mais, nous sommes fermés)
Is there or isn’t there going to be enough fuel for Paris’ Charles de Gaulle airport to keep functioning after Monday?
A near-national strike was set to grip France for another day on Monday. Truck drivers,
Further reading
Elsewhere on Monday,
- There’s more than one tool for the Fed.
- Why economists disagree.
- The Tea Party weighs in on ‘fraudclosure.’
- In two minds about the mortgage mess.
- “This crisis could spell the end of the mortgage business altogether.”
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Felipe Larraín: Both US and China at fault in currency war
China’s exchange rate policy is currently the predominant issue in global economics,
Snap news
Breaking pre-market news on Monday,
- Blue Asset Management recommends 485p a share cash offer from Royal Bank of Canada – statement.
- Gulf Keystone Petroleum confirms £109m equity fund raising to accelerate its ‘active’ drilling programme – statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Controls on currencies ‘doomed’
Political intervention to try to stem a flood of foreign investment into emerging market currencies and bonds is doomed to fail, according to fund managers active in the sector,
Further reading, weekend edition
- The permabear to English translation guide.
- Currency wars, Big Mac index edition.
- Gideon Rachman notes that protectionism is gaining respectability from some unexpected sources.
- The psychological science behind financial crises.
What Bernanke left out
As we noted earlier, the only exciting bit of the FOMC minutes released on Tuesday was this:
Participants noted a number of possible strategies for affecting short-term inflation expectations, including providing more detailed information about the rates of inflation the Committee considered consistent with its dual mandate,
On the ho-hum inflation report
So that’s that:
Headline US CPI inflation climbed just 0.1 per cent (seasonally adjusted) from August to September, and the core number stayed flat. And as you can see in the chart above, the 12-month core number actually ticked down slightly to 0.8 per cent.
The Fed is the biggest seller of volatility
Correlation has purportedly come down a bit since its peak levels achieved earlier this summer.
Nevertheless, it is still running way above historic norms.
Meanwhile, all sorts of factors — ranging from index funds to volatility — have been blamed for the rising trend.
A stab at securitisation
Some weekend foreclosure scandal, securitisation-related reading.
It’s based on a 159-page class action lawsuit, filed in Kentucky on behalf of all Kentuckian homeowners, and against MERS and several financials.
Nikkei 63,000,000
And to think the market shorthand has always been Japan = deflation.
Trust Société Générale strategist Dylan Grice to think of the Japanese future a little, um, differently. From Friday’s Popular Delusions note:
Oil explorers pass round the hat (updated)
It’s all go in London’s small cap oil sector.
The talk in the market is that Gulf Keystone, the Kurdish explorer, is trying to raise $175m fund raising pitched at 140p a share. Mirabaud Securities is believed to handling the share placing.
El-Erian: What did Bernanke tell us this morning?
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, argues that Federal Reserve chairman Ben Bernanke’s latest speech has strengthened the case for QE2 – but also highlighted its costs .
Overheard in the Long Room
The members of FT Alphaville’s private forum, the Long Room, enjoy (and regularly engage in) spirited debate. Here’s a selection of what’s been said and posted just recently:
- There’s a history lesson on the limitations of monetary policy.
Presenting the incredible shrinking share price
When will Autonomy rally? And what will be the trigger? A massive acquisiton perhaps? Spurs winning the Premier League?
Monetary Policy Objectives and Tools in a Low-Inflation Environment
Here’s the text of Ben Bernanke’s just-released speech at the (deep breath) ‘Revisiting Monetary Policy in a Low-Inflation Environment’ conference in Boston.
And it should pretty much put an end to the debate about whether the Fed is going to launch QE2 or not,
The POMO effect, charted
Permanent open market operations (POMO) by the Fed restarted on August 17, 2010.
Those who are reluctant to admit that these operations may have resulted in an almost instant asset boost via dollar devaluation worldwide,
Markets Live transcript 15 Oct 2010
Markets Live chat transcript for the chat ending at 11:16 on 15 Oct 2010. Participants in this chat were: Neil Hume, FT Izabella Kaminska Tracy Alloway NHHello there NHwelcome to Markets Live
From foreclosure to writedowns
Foreclosure worries are now (finally) seeping into bank shares and credit.
Four US financials — Bank of America, JP Morgan Chase, GMac/Ally, PNC — have halted foreclosures in all or some US states while they sort out technical deficiencies in their paperwork process.
What’s going on inside the FSA?
Well, this is worrying. When even Britain’s Financial Services Authority acknowledges its own personnel problems, it must be serious.
From a memorandum the FSA recently sent to the Treasury Select Committee,
Duster! (updated)
What’s that?
Yep, is the unmistakable whiff of burnt fingers.
From Falklands explorer Desire Petroleum on Friday morning:
Desire Petroleum plc (AIM:DES), the oil and gas company wholly focussed on the North Falkland Basin,
Further reading
Elsewhere on Friday,
- ‘Twitter mood predicts the stock market.’
- More hellhounds, please.
- Only the weak survive.
- Just who is in charge in China?
- The distant sound of rushing water.
Pink picks
Comment, analysis and other offerings from Friday’s FT
Analysis: A Swiss survivor
In the financial earthquake that followed the collapse of Lehman Brothers in 2008, bankers were gripped by one question: