November, 2010
FOMC composition and future monetary policy
Just a few things to note, somewhat belatedly, about the latest reservations expressed by three FOMC members — Kevin Warsh, Richard Fisher, and Thomas Hoenig — towards further QE measures.
But first,
Make European defaults – not bailouts, think tank says
The Germans are fast picking up support for their Sovereign Debt Restructuring Mechanism (SDRM) — along with new acronyms. So please welcome the ECRM.
Bruegel, a Brussels-based think tank, announced on Tuesday that “one of the main benefits of creating an ECRM would be the public acknowledgement that the default of a government on its debt is a real possibility in the euro area.”
Chasing the dragon with Anthony Bolton
Solved. Anthony Bolton’s nice-to-have Chinese problem.
From Fidelity’s China Special Situations fund on Tuesday afternoon:
In the period from admission to trading on the London Stock Exchange on 19 April 2010 to 8 November 2010,
Macro Live 3: G20 preview edition
FT Alphaville’s new, dynamic feature, Macro Live, will be given another airing this Wednesday — ahead of the G20 meeting.
So join us at 3.30pm London time (10:30am in New York) on Wednesday for an hour or so of live,
Taking the temperature on housing
From the latest monthly survey of housing by the Royal Institute of Chartered Surveyors (Rics) — highlighting the direction of change for house prices:
But wait — Rics also reports that while there was a drop in new buyer enquiries for the fifth consecutive month,
Hayward admits banks stopped lending to BP
A hat tip to our colleagues over at FT Energy Source for bringing this to our attention:
It’s a preview of the BBC’s Money Programme special on BP’s ‘$30bn blowout,’ which is set for broadcast later this Tuesday.
Markets Live transcript 9 Nov 2010
Markets Live chat transcript for the chat ending at 12:23 on 9 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHHola NHMarkets Rabble NHwakey wakey
FX still mopping up excess volatility
We wrote last week how ‘Bernanke’s put’ was potentially transforming into ‘Bernanke’s genie released’ over in the FX markets.
On Tuesday, it seems, that offloading of volatility was still very much going on.
More bond buying please Mr Trichet
On Monday, we picked up on news that the ECB had returned to the bond market last week to to snap-up ailing Irish bonds. In its first purchases since early October, the European central bought a total of €711m worth of eurozone paper.
Taking the corporate hospital pass
Yell has a new chief executive. His name is Michael Pocock and in a previous life he was the boss of Polaroid* which he managed to nurse back to profitability and eventually sell.
Presumably he will
Frankenstein’s ETFs for hedge funds
We return to Monday’s Kauffman Foundation ETF report, with a note on what the authors say about bespoke structuring of securities for the specific trading needs of hedge funds and banks’ internal market-making and risk management operations:
Further reading
Elsewhere on Tuesday,
- The (real) top of the Chinese property market.
- Money is not a tangible thing, it is a concept.
- Ethics for economists.
- Return of the risk arbs.
- Tracking bank failures:
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: The G20’s seven pillars of friction
As the leaders of the world’s biggest powers gather for a Group of 20 summit, their South Korean hosts talk hopefully of the organisation as a “steering committee of the world”.
It’s official: Ambac files for Chapter 11
Not with a bang, but a whimper.
Emphasis FT Alphaville’s:
Ambac Financial Group, Inc. (NYSE: ABK) (Ambac or the Company) announced today that it has filed for a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”).
It’s a QE2 backlash, doncha know – continued
More critics to add to the list. These are a little closer to home, however.
First up, Dallas Fed President Richard Fisher’s address to the Associate for Financial Professionals on Monday.
Via IFR:
Return of the bond-buying ECB
There were rumours that the European Central Bank had returned to the bond market last week, to snap-up those ailing Irish bonds. And now we know it’s true.
The ECB announced on Monday that it bought €711m worth of eurozone bonds last week — its first bond-purchase since early October.
Let them eat Petroplus refineries!
That’s the share price of Swiss oil refiner Petroplus holding on Monday.
According to Reuters, the company’s stock fell as much as 9.5 per cent on the days as concerns the company could be forced to breach loan covenants grew following deterioration of one of the company’s key refining benchmarks.
Dick Bove on QE2 as a bank-less “financial war with China”
We all know Dick Bove ♥ banks — sometimes to a fault.
But the Rochdale Securities analyst brings up an interesting QE2-related point in his latest note. The Federal Reserve’s first round of quantitative easing,
It’s a QE2 backlash, doncha know
And so it begins.
First there were rumblings from Asia:
BEIJING, Nov. 5 (Xinhua) — A senior Chinese foreign affairs official said Friday that the United States should explain its latest round of quantitative easing,
It was only a matter of time…
As of Monday, Irish five-year CDS is being quoted at 605 basis points — which means it’s managed to surpass one other suspect sovereign — Argentina. Via Markit:
(H/T Bond Vigilantes)
Behold the ETF arbitrage fund (updated)
Fed up with index arbitrageurs making all that money from ‘arbing’ the indicative net asset value of ETFs’ component baskets versus the underlying?
Then the Aviva Investors’ new Index Opportunity Fund could be the ETF arbitrage fund for you.
Markets Live transcript 8 Nov 2010
Markets Live chat transcript for the chat ending at 12:30 on 8 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHGood morning Rabble NHand welcome to a new week
The likely cost of Ireland’s bank bailout
Ireland’s five-year CDS has risen above 600 basis points on Monday morning and anyone who has read Morgan Kelly’s frightening article in the Irish Times will know why.
The UCD professor pulls no punches in his latest piece.
When Latvian interbank rates trade through Euribor
Here’s an interesting datapoint unearthed up by BNP Paribas’ emerging markets deak on Monday.
The Latvian interbank rate — Rigibor — is trading through Euribor for the first time in four years…
…
For sale: one tarnished fund management group
More over Ocado, make way Promethean World, fund management group Gartmore has cemented its position as the worst UK IPO of recent years with a truly shocking statement.
In fact Monday’s third-quarter trading update is so bad it’s difficult to know where to start.