October, 2010
Snap news
Breaking pre-market news on Friday,
- Desire Petroleum finds no hydrocarbons at the Rachel prospect in the North Falklands Basin — statement.
- Segro says chief executive to retire in 2011 — statement.
Your guide to US bank earnings season
Jamie Dimon can act as nonchalant as he wants about the foreclosure mess/scandal/crisis/catastrophe-in-the-making, but clearly the market stopped buying it on Thursday. But if what you really want is to hear management squirming over all this,
No wonder everybody’s been refinancing
This pretty much speaks for itself — from Freddie Mac, with thanks to Calculated Risk for the pointer:
Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®),
The small business credit crunch
We’ve already discussed in some detail the difficulty of discerning how much of the decline in small business lending is driven by the balance sheet constraints of lenders vs how much is from businesses simply not needing loans.
CPI preview
Yet another freaking economic indicator that you can file under “getting more attention than unusual because it’s the last one before QE2 blah blah fine great” is Friday’s consumer price inflation index for September
We’ll start with a couple of new graphs from the Cleveland Fed,
RepoCDSed
Fears of an extended foreclosure crisis put sizeable pressure on US bank spreads.
WFC five-year CDS is at 128bps (+10) according to Markit prices, Citi at 175bps (+11), and JPM at 96bps (+7). BAC is up 18bps to 197bps — its widest level since July 2009.
What’s the ETF settlement fail issue?
We’re sure the ETF experts will have a perfectly plausible explanation for the following, but at the moment we don’t know what it is.
Why is it that ETF settlement fails far outweigh any other securities listed on US exchanges,
The QE-20 is now in session
Now for some upside to ‘the crisis upon us.’
Here’s a bold vision of the post-G20 international order, courtesy of Morgan Stanley’s inflationista-inclined analysts — meet the QE-20.
Plain old QE2 is already ruffling feathers ahead of the next set of G20 negotiations,
A rumour of (currency) war
Never mind asset prices — looks like QE even has the power to distort good old market rumour mills.
Here’s the gist of a certain Chinese whisper going round various research desks, brokers and hedge fund managers on Thursday:
The ECB’s epic ode to monetary analysis
Life is surely too short for this.
Out on Thursday — Almost 500 pages (well, 480) of European Central Bank discourse on why monetary analysis should be included in monetary policy decisions.
Believe it or not,
Trade deficit back to (ab)normal
Only a few things to note about Thursday’s announcement from the US Census Bureau that the United States trade deficit had climbed back to $46bn:
Nearly all of the increase in the deficit from July was down to a rise in goods imports,
The little match problem
As most European investors would have noticed, Euronext markets suffered a 45-minute outage just ahead of the close on Wednesday.
According to the FT’s Jeremy Grant, the halt was due to a “human error”.
Risk on, risk off, risk on, risk off, risk … ruptured
Nomura’s fixed income team reckon ‘risk on, risk off’ is too simple.
In fact, they say the recent bout of QE2-inspired herding of risk is breaking down.
You can see the divergence, analysts Owen Job and Saeed Amen say,
UBSoiled all over again
Because the first 50-page report into shareholders’ subprime losses, released in April 2008, was not enough. UBS have now published a 76-page “Transparency report to the shareholders of UBS.”
This Swiss bank is a sucker for subprime pain.
Currency wars – ‘The crisis is upon us’
We’ve already commented on the rampant descent of the dollar on Thursday.
But here’s a scarily convincing argument from Marc Ostwald at Monument Securities about what all these QE-related currency war shenanigans could really be indicating.
Markets Live transcript 14 Oct 2010
Markets Live chat transcript for the chat ending at 11:15 on 14 Oct 2010. Participants in this chat were: Neil Hume, FT Tony Tassell NHHello there NHIt’s 11.03am NHand time for Markets Live
About those Yahoo buyout rumours
Shares in Yahoo are blazing in pre-market trading:
That’s $17.21 per share versus a Wednesday close of $15.25 per share …
…after the Wall Street Journal reported that several private equity companies are mulling bids:
Time gentleman please [updated]
How’s this for full disclosure of potentially price sensitive news?
It’s from pub company JD Wetherspoon, announcing the departure of its chief financial and chief operating officers on Thursday morning.
Dollar meltdown
This is getting a bit much, isn’t it?
The dollar suddenly lurched down across the board on Thursday.
First, cable flying past $1.60 (all charts via Reuters):
While the euro settled down to life after $1.40:
A yen for history
‘I can’t go on. I’ll go on’. That would appear to be the Bank of Japan’s Beckettian motto, as the yen hit a 1995 high against the dollar with no intervention in sight on Thursday (chart via Reuters):
We’re well under September’s Y82 intervention level now.
Moody’s looks to Finland – to explain Ireland, Spain
Want to know the shape of things to come in Ireland? Spain?
Look no further than … Finland.
That particular Nordic nation experienced an almighty financial boom in the 1980s. In 1990 came the the bust — led by a slowdown in the global economy,
Further reading
Elsewhere on Thursday,
- Pity the fool, uh, goldbug.
- The FX-shaped hole in FinReg.
- ‘Burger King kids’.
- What can QE accomplish?
- And is Ben having second thoughts?
- Ucits,
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: The best bet to curb too big to fail
Two years after the collapse of Lehman Brothers, regulators are working on ways to prevent it happening again.
Banking on Brics
Bank earnings season is now underway, and here’s a trio of charts from the Economist Intelligence Unit showing that most of the banks whose shares outperformed the Bloomberg World Banks Index in the past year are in the Brics.
JPM on foreclosures, MERS
Calculated Risk beat us to it, but we think it’s worth highlighting the parts of this morning’s JP Morgan conference call where CEO Jamie Dimon and CFO Douglas Braunstein answered questions from analysts about the foreclosure scandal.
You start a QE conversation, you can’t even finish it
The more central bankers comment ==> the more QE2 gets priced in, these days. Exhibit A: recent post-FOMC statement reaction.
No wonder that some central bankers want to rejig those comments to include more (how should we put it?) robust inflation targets,
Ireland, Portugal join sovereign risk elite
The latest quarterly sovereign risk report from CMA Datavision is out, and wouldn’t you know — Ireland and Portugal have cracked the top ten of the world’s riskiest sovereigns:
Meanwhile, the constituents of the top ten safest sovereigns stayed unchanged,