December, 2010
Spain: a prisoner in its own citadel
It seems that not everyone was left woozy and starstruck by Monsieur Trichet’s delphic purrings.
Despite Thursday’s European Central Bank bond purchases and the announced extension to April of its liquidity function,
Further reading
Elsewhere on Friday,
- How likely is an imminent eurozone default?
- More eurozone crisis thoughts.
- Hangover theory and morality plays.
- Bailout data point of the day: Morgan Stanley edition.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Lessons in a $3,300bn surprise from the Fed
When the US Congress passed the monstrously large Dodd-Frank financial reform bill last summer,
Snap news
Breaking pre-market news on Friday,
- Rio Tinto extends Channar joint venture with Sinosteel; forms new JV with Chinalco for Chinese exploration — statement and statement.
- Premier Foods says Quorn sale talks at ‘an advanced stage with two parties’ — statement.
More bad news for Greece
Fresh out of S&P this evening:
* We are assessing the credit implications of the proposed European Stability Mechanism (ESM) that may govern EU sovereign bonds beginning in July 2013.
* Specifically,
Further further reading
For the commute home,
- Morgan Stanley wants to reinvent itself as Wall Street’s client-friendly firm.
- A Q&A with Trichet after the press conference.
- The Fed hasn’t disclosed everything:
Maybe it’s working, and maybe it isn’t
It was dove vs hawk on Thursday as two Fed district presidents — James Bullard of St Louis and Charles Plosser of Philadelphia, respectively — gave separate speeches sharing their views on the efficacy of QE2 and the economy.
Cross-border M&A and EM flows
Following this morning’s $4.1bn acquisition of Russia’s Wimm-Bill-Dann by Pepsi, Reuters updates the year’s international M&A numbers:
- Pepsi’s $4.1 billion acquisition of Russia’s Wimm-Bill- Dann brings the volume of US acquisitions in the emerging markets to $23.8 billion,
If not the ECB, whom?
We don’t quite understand why the bond market seems so weirdly blasé over what the ECB has (not) revealed on its sovereign debt strategy.
On the one hand, we give the ECB points for the market signal it sent via buying Irish and Portuguese bonds even as President Trichet was saying that the Securities Markets Programme would be ‘ongoing’.
Slightly less deficient deficit commission [updated]
Despite narrowly losing to Jean-Claude Trichet in today’s global debt-ridden excitement stakes, the National Commission on Fiscal Responsibility and Reform continues to stumble towards a final vote on Friday.
Euro confusion
RTRS-TRICHET-EXCESSIVE FX VOLATILITY NOT WELCOME
Weekly claims and a payrolls preview
Only periodically do we write about weekly initial unemployment claims — it’s an erratic number and subject to big revisions. So when we do, we tend to emphasise the 4-week moving average as opposed to the individual weekly reports.
Look into my eyes… I am Jean-Claude Trichet
When’s the best time to start buying peripheral bonds?
ECB press conference time of course!
FT Alphaville hears that while the world was focused on ECB president Jean-Claude Trichet dodging questions about more government bond purchases…
Markets Live transcript 2 Dec 2010
Markets Live chat transcript for the chat ending at 14:43 on 2 Dec 2010. Participants in this chat were: Neil Hume, FT Joseph Cotterill Izabella Kaminska NHHola NHand welcome to this special session of Markets Live
Trichet special — Markets Live at 1330 GMT
The ECB President is speaking on the euro crisis at a highly critical edition of his regular press conference this Thursday — and we’ll be following along in real-time in an impromptu Markets Live Session.
Markets Live transcript 2 Dec 2010
Markets Live chat transcript for the chat ending at 12:33 on 2 Dec 2010. Participants in this chat were: bryce.elder Neil Hume, FT BETesting, testing. BEOne two. One two one two one two.
Spain’s problem, Italian job
On the eve of another crisis-hit ECB policy meeting, here’s a WSJ story that’s rather telling, following Wednesday’s hints that the Bank will buy more sovereign debt from a panicked market in the coming weeks:
Zapatero’s Blunders-bank
The European Instability Mechanism, as we’ve noted before, is courting chaos in Eurozone debt markets due to it signaling uncertainty about fiscal unity in Europe. Namely, that Germany prefers to see bond holders take haircuts rather than offer support to distressed co-members.
No nuclear announcement from the ECB
There’s really only one thing on the agenda this Thursday – the ECB’s meeting and subsequent press conference.
But few in the City expect President Trichet to surprise the markets with a shock-and-awe style bond-buying blitz.
Google and Groupon: Smart or stupid?
With its talks to buy the fast-growing US electronic coupon company Groupon for as much as $6bn, Google has analysts wondering whether it’s being very smart or very stupid.
As the FT reports, analysts are sharply divided over “whether a deal would represent a coup for Google,
Further reading
Elsewhere on Thursday,
- The biggest CEO screw-ups of 2010. – Reign of (economists’) error.
- The junk-bond time bomb.
- China’s warning signs.
- The rough politics of European adjustment.
- America,
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Why the iPad should rival the web
Richard Branson and Rupert Murdoch are entrepreneurs with an admirable record of ignoring conventional wisdom,
Snap news
Breaking pre-market news on Thursday,
- JJB Sports says sales remain extremely challenging and below expectations, likely will breach Bank of Scotland covenants by January 2011 – statement.
- Desire Petroleum finds oil! — statement.
Further further reading
For the commute home,
- Hangover theory and morality plays, by Steve Randy Waldman.
- Careful not to overpraise Tarp: we don’t know its actual cost.
- A long story in Euromoney about mortgage putbacks and securitization,
A surprise bullish turn
Goldman has updated its forecast for the US, expecting real GDP growth of 2.7 per cent next year and 3.6 per cent in 2012:
As always, we find the forecasts themselves less meaningful than the information contained in them.
Not-so-TAF-tastic
The Fed’s Term Auction Facility — started in 2007 to boost short-term liquidity amongst commercial banks — carried a number of caveats.
This was one of them:
Under the program, the Federal Reserve auctioned 28-day loans,
The moment of truth is here, perhaps
Make sure your grandkids are wearing bibs.
The preamble to Wednesday’s long awaited Deficit Commission report includes a harsh warning from Senator Tom Coburn: “We keep kicking the can down the road,
Beige Book #8: not bad
We’re a gloomy bunch here at FT Alphaville, so the renewed optimism in the US economy is making us nervous — especially since it reminds us of that blissful early spring, just before the effects of Greece and a long stretch of terrible employment reports gave lie to those prematurely triumphant magazine covers.
No, Uncle Sam isn’t bailing Europe out
Either US Treasury officials (or Reuters ledes) are supreme masters of subtlety, or markets are very stupid.
We’re going with the latter.
We want you to carefully note the following wording of this Reuters report: