November, 2010
Why QT, not QE, is the risk
A plan for a plan is not a plan, says HSBC on Friday.
And this is the reason why QT is the risk now, not QE.
Quick explainer: QT is what HSBC’s senior FX strategist Daniel Hui et al are calling quantitative tightening — a.k.a.
You’re invited to…
Update: Neil Hume will be at the venue from 5pm for any early birds out there.
More venue information this way…
The return of Godzilla QE – this time it’s unneighbourly
Willem Buiter is back — with more criticism of Japan’s monetary policies.
They are, Citi’s chief economist writes on Friday in an 88-page note, simply too small to fight off that decade-long deflation.
Pomo-postponed [Updated]
This is probably not what the market wanted this Friday.
Adding to the back-and-forth uncertainty of the Irish will-they-or-won’t-they-get-a-bailout spiel — CNBC is reporting that the Federal Reserve has experienced a technical glitch in its inaugural QE2 operation scheduled for this Friday.
The Spitzer settlement for mortgages
Cast your minds back to early 2003.
Wall Street was still at war with the pre-Dupré, New York state attorney general Eliot Spitzer — a man hellbent on exposing financials’ conflicts of interest. On April 28 of that year,
REQUEST FOR URGENT BUSINESS RELATIONSHIP
A reader writes…
Dear Sir,
Good day and compliments. I am Dr (Mr) Benjamin Bernanke, Chairman of Federal Reserve of United States of America. This mail will surely come to you as a great surprise,
Touching negative basis in Ireland
Whoops, missed this.
Ireland joined Greece this week in the negative basis club. That is, the five-year asset swap spread for Ireland outpaced movement in equivalent credit default swaps. So (in basic terms) spreads in the CDS market were trading lower than in the cash market for Ireland.
Markets Live transcript 12 Nov 2010
Markets Live chat transcript for the chat ending at 12:18 on 12 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHGood morning NHHola NHBonjour
Commodities investing is against God, apparently
We just received the following note from the Interfaith Center on Corporate Responsibility:
I’m writing to share a story that might be of interest to your readers.
As active shareholders, members of the Interfaith Center on Corporate Responsibility (www.iccr.org) have been working with top U.S.
Another banking curate’s egg
Let’s start with positive news from Friday’s Bank of Ireland trading update.
First, earnings look to be in line or ahead of market expectations and there hasn’t been a large increase in bad debts:
Our Corporate Banking loan book has begun to benefit from the general improvement in world economic conditions.
That seeping Irish confidence – 1% per day
It’s not just the Irish sovereign that’s experienced a — erm — market deterioration.
From Suki Mann, credit strategist at Société Générale:
As a testament to the virulence of the sovereign weakness,
Towards a future financial crisis resolution mechanism
What’s that? Could it be the sound of Germany and France frantically rowing back as they realise that their plans for a son of EFSF were somewhat misjudged.
Looks that way.
Statement issued by the finance ministers of France,
Shanghai shocker
Related link:
Shanghai plunges 5% on tightening fears – Global Market Overview
Further reading
Elsewhere on Friday,
- Jeremy Grantham has already started to sell.
- How government austerity crushed Cisco’s earnings.
- Commodity prices: Is the bulk carrier half-full, or half-empty?
- Want a job at Goldman? Beware,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Turkey’s challenge to Old Europe
Turkey’s president Abdullah Gul was in London this week. He picked up the prestigious Chatham House prize from the Queen and had talks with David Cameron.
Snap news
Breaking pre-market news on Friday,
- Bank of Ireland sees underlying operating profit down 35-40 per cent on 2009 — statement.
- Rolls-Royce says problem with Trent 900 engine confined to specific component in the turbine area;
Further further reading
For the commute home,
- More cross-border takeovers by Chinese companies are inevitable.
- ProPublica reports that the US has a spent a fraction of the $50bn pledged for loan modifications.
- How political regimes affect economic policy uncertainty.
The other currencies matter too
Econbrowser recently posted an interesting guest article by Willem Thorbecke, a research fellow at the Asian Development Bank Institute.
Thorbecke argues that the US shouldn’t ignore the exchange rates of other East Asian countries as it pressures China to let the RMB appreciate.
Supertrap
Just when you thought Goldman Sachs could not come up with a more ludicrous valuation for a retailer, the investment bank that brought the world Ocado surpasses itself with this report on SuperGroup:
SuperGroup offers a unique opportunity to invest in the early stages of a compelling growth phase,
A different way of looking at debt – and the developed world
Matt King — the god of credit strategy at Citigroup — has a block-buster note out on debt — tackling everything from balance sheet recessions to bubbles and busts.
Let’s start with the basics; what does Matt King reckon debt has to do with current market uncertainty? As it turns out — a lot.
US-China relations explained, yo
The latest diplomatic spin coming out of the G20 conference in Seoul:
Obama is pushing for specific commitments from other G20 leaders at this summit to tackle global imbalances — shorthand for the massive U.S.
Towards a full European economic federation…
Bring it on, says John Taylor. And quick
The chairman of FX Concepts — one of the world’s biggest currency hedge funds — has put pen to paper this week — with the the eurozone and commodities firmly fixed in his sights.
Remember that other sovereign crisis?
It seems there’s been some further developments in the sorry saga of the Palm Island state on Thursday.
According to Reuters sources, Dubai Group — a unit of the Dubai Holdings conglomerate owned by Dubai,
Moody’s didn’t get the memo re: China
Thanks.
At exactly the moment when the absurd but hilarious battle of cross-border ratings agencies could have really escalated, Moody’s decides to spoil the fun:
Moody’s Investors Service has today upgraded the Chinese government’s bond rating to Aa3 from A1 and is maintaining its positive outlook.
Top of the bond yield to you – continued (and updated)
Presented without comment — the Irish 10-year yield topping 9 per cent:
And the shorter dated paper:
And the Oscar for ‘best supporting C.banker’ goes to…
First, it was Robert Zoellick.
And now former Federal Reserve chairman Alan Greenspan is at it.
Both have been and still are ruffling feathers in the FX market with relatively provocative commentary.
A not-so-CLOooo recovery
Structured finance world, rejoice. Banks too.
Early this week Standard & Poor’s announced a mass (and we mean mass) round of positive news for Collateralised Loan Obligations (CLOs) — those sliced and diced bundles of corporate loans.
From Ireland to €2,000bn of eurozone contagion
Let Ireland default? Not a chance.
With Irish 10-year yields approaching nine per cent — RBS’s Jacques Cailloux has come down firmly on the other side of the ‘what to do about Ireland?’ argument — advocating more eurozone intervention.
Cisco blues
The sell-off in Cisco Systems, which plunged more than 14 per cent on Wednesday evening after the US tech giant reported better-than-expected 1Q earnings, speaks volumes about investor perceptions – not just about the direction of the US tech giant and corporate bellwether,
Markets Live transcript 11 Nov 2010
Markets Live chat transcript for the chat ending at 12:26 on 11 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHMorning Rabble NHit’s 11:03am NHand time for Markets Live