November, 2010
The parliamentary Foundation X-files [updated]
Words … kind of fail here.
Thanks to blogger Hopi Sen, we present — without too much comment — the following, from a recent speech in the House of Lords by Lord James of Blackheath:
For the past 20 weeks I have been engaged in a very strange dialogue with the two noble Lords [Sassoon and Strathclyde],
Price-level targeting and the signaling problem
We’ve written in some detail about price-level targeting and how it would differ from targeting the inflation rate — and also about our frustration with Ben Bernanke’s refusal to discuss it despite some support for the idea from within the FOMC.
Toxic Pub Co. meets toxic bond insurer
You won’t find Ambac mentioned in Punch Tavern’s most recent annual report.
But it’s there. Hovering — waiting — in the background.
The zombie US bond insurer began guaranteeing some of the British (toxic) pub co.’s formidable securitisation programmes back in 2003.
Bund pancake
Eurozone flight to safety? Escape from QE2-reflation? However you explain the German yield curve on Tuesday – the 10-year-30-year portion has now flattened to late-2008 levels (chart via Bloomberg):
Pfannkuchen,
Everything’s rising in eurozone peripherals…
… And not in a good way either.
On Wednesday, Portugal managed to sell all €1bn worth of its planned auction of three-month and 12-month bills. Yields, however, continued their inexorable rise.
The three-month bills were sold at an average yield of 1.818 per cent,
Markets Live transcript 3 Nov 2010
Markets Live chat transcript for the chat ending at 12:10 on 3 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHMorning rabble NHand welcome to Markets Live
Beyond QE – to central bank credibility
“A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years).”
Hello Kitty!
That’s kitty in both the ‘pool of money’ and Japanese cartoon character sense:
As Société Générale noted on Wednesday:
Developed equity markets were reawakened by record strong inflows into Japanese equity markets ($5.3bn in the last four weeks).
Judgment day
As if we didn’t all know it already — today is Judgment Day for the Fed.
So, will they or won’t they save humanity from Skynet ongoing economic malaise with a healthy fresh round of quantitative easing?
All will be clear at 6:15pm London time/2:15pm in New York.
Some of our diggers are missing
Well, well, well.
Much to the surprise of no one, Petropavlovsk has slashed its production guidance on Wednesday morning.
And it’s all because of the weather and those missing diggers, according to chairman Peter Hambro.
Further reading
Elsewhere on Wednesday,
- Hayek and Keynes — resurrected to rap at the Buttonwood Conference.
- And is Barack Obama a Keynesian?
- The world’s top 50 banks — in bubbles!
- Just in time for Christmas — the Lloyd Blankfein doll.
Pink picks
Comment, analysis and other things from Wednesday’s FT,
Martin Wolf: Current account targets, back to the future
The debate on “global imbalances” has gone back to the future, writes the FT’s Wolf.
Snap news
Breaking pre-market news on Wednesday,
- Socgen rules out capital hike, Q3 beats forecasts – statement.
- Next warns clothing prices will have to rise because of speculative bubble in cotton — statement.
Further further reading
For the commute home,
- Jamie Dimon beset by bad WaMu loans.
- The Comment period for the Volcker Rule ends this Friday.
- The US elections have been influenced by more than just the economy.
- Legrain:
SEC charges doctor with insider trading
If you need something to distract you from all the hype regarding the elections and QE2, here is a nominee for the category of unusual insider trading cases (emphasis ours):
Washington, D.C., Nov. 2,
Trouble at Turquoise… [updated]
Something very murky indeed went on in the London Stock Exchange’s flagship Turquoise trading system on Tuesday.
We know that because the LSE told us (via Reuters):
RTRS-LSE SAYS TRADING DISRUPTION TO TURQUOISE MAY HAVE OCCURRED IN “SUSPICIOUS CIRCUMSTANCES”
FT Alphaville: Macro Live
FT Alphaville is introducing a new feature to the site, and we’re calling it Macro Live.
Similar to Markets Live, our daily discussion of share price moves and other financial news, Macro Live will
Bolton’s special situation
Here’s a nice problem to have.
Via a stock exchange announcement from Anthony Bolton’s Fidelity China Special Situations (FCSS) investment trust:
Due to the consistently high levels of market demand,
Charts du jour: US elections edition
We won’t know anything for sure until Tuesday night, but here’s the latest update from the Intrade prediction markets, where investors are currently banking on the same outcome everybody was already expecting (as of 9:55am in New York):
Allied Irish and a pension fund fail
To have one bank trash your sovereign standing may be regarded a misfortune; to do it again with another one looks like carelessness.
And Oscar Wilde was Irish, natch.
Here’s a Markit chart of five-year CDS on Allied Irish Banks subordinated and senior debt over the last year.
Currency war goes covert
Ding dong, the dollar’s dead — against its Asian and Antipodean counterparts, anyway.
That’s the USD reaching parity with the Australian dollar this Tuesday.
Indeed the US currency has even been weakening against its basketcase continental cousins — the Great British Krona and the euro — ahead of Wednesday’s probable QEasy announcement from the Fed.
Masked men at Hациональный резервный банк
This is the scene at London newspaper tycoon Alexander Lebedev’s Национальный резервный банк — a.k.a. the National Reserve Corporation bank — in Moscow on Tuesday:
Pictures courtesy of Google Maps, ura.ru and Ria Novosti.
When capital controls are the only QE antidote
Are capital controls the most unwelcome comeback since the one-piece jumpsuit?
HSBC’s top analysts and economists look into the issue on Tuesday and slightly beg to differ. Not only have they been more common throughout the recent past than most would care to remember,
Markets Live transcript 2 Nov 2010
Markets Live chat transcript for the chat ending at 12:34 on 2 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHOK NHmorning markets rable NHit’s 11.03am
Back to earth – the UK GDP rocket
Remember that forecast-busting UK GDP reading? You know, the one boosted by a particularly strong performance from the construction sector.
Well, Tuesday’s purchasing managers survey puts it into context.
Decoding the Lloyds IMS (updated)
There’s not much granular detail in Tuesday’s trading statement from Lloyds Banking Group, the part-nationalised British bank.
Hard numbers are few and far between (there’s just nine excluding repetitions),
Turkish stocks falling? Blame Mark Mobius
On Tuesday evening, October 26, Mark Mobius — the most wanted man in the world — put into effect his dastardly plan to crush the Turkish economy.
Mobius — whose previous schemes included plotting to increase the value of his own gold stocks by detonating a dirty nuclear bond inside the US Bullion Depository at Fort Knox,
Rates on the rise in Asia
It’s central bank action month, or at least, central bankers are grabbing the limelight – even as government leaders and policy makers from around the world prepare to discuss ‘currency wars’ and other issues at the G20 and Apec gatherings later this month.