December, 2010
How to save the eurozone, by JPMorgan
Forget debt restructuring. Or E-bonds. Or US-style quantitative easing.
JPMorgan have found a different way out of the European crisis.
The bank’s Joseph Lupton and David Mackie have switched some
A Christmas turkey
A late entry for worst UK flotation of the year… Madagascar Oil.
Just three weeks after its shares started trading on the junior Aim market at 95p, the exploration company has dropped this bombshell:
The privatisation of liquidity ops
FT Alphaville has been researching the issue of so-called ‘liquidity transfers’ ever since we first came across the matter in Life & Pension Risk in October.
As Risk noted at the time, there’s been
Buffering up at the Bank of England
The Bank of England can always be expected to bang on about banks’ financial health. But with the eurozone slowly imploding on its doorstep and — as the FT notes, with the global financial crisis still vivid in the memory,
Further reading
Elsewhere on Friday,
- Jargoniest business jargon of the year.
- It’s official, Wells Fargo is biggest US bank by market cap.
- Wall Street starts eating itself.
- Another day, another rating-agency fail.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Lorenzo Bini Smaghi: Europe cannot default its way back to health
Among the many things we have learnt from this crisis is that governments and financial markets find it difficult to understand each other,
Snap news
Breaking pre-market news on Friday,
- Uralkali confirms talks over reverse takeover by Silvinit — statement.
- Draka ‘remains concerned’ over financing of Xinmao offer; due diligence close to completion — statement.
Further further reading
For the commute home,
- The impact of a weakening USD on individual states.
- The Fed unveils a bold new proposal on interchange fees.
- Why should we care about initial unemployment claims?
- Dominique Strauss-PanglossKahn says Spain and the euro should be just fine.
High yield — up against the wall, eventually
Another day, another story about the ongoing boom in junk debt. This time from Bloomberg:
The extra yield investors demand to own high-risk debt rather than government bonds has dropped 82 basis points this month to 540 basis points,
Grannies are NOT the latest providers of ECB collateral
Hands-up.
FT Alphaville — in our eagerness to bring you breaking news — have mistaken eurosystem fixed-term deposits for bank fixed-term deposits. Our confusion was sparked by the fact that the ECB seemed to have begun accepting term deposits as collateral in the spring,
Housing and jobs – a bit better but still bad
The two ugly sisters of the US economy’s fairytale recovery reared their heads in data releases Thursday morning.
First up, housing starts. Release from the Commerce Department:
NEW RESIDENTIAL CONSTRUCTION IN NOVEMBER 2010 The U.S.
Could Exxon bid for BP?
Yes, says Fred Lucas of JPMorgan, who notes that BP is trading on an implied reserve multiple that’s 30 per cent below its peers and equal to ExxonMobil’s long run finding and development costs:
Who also says investors should not overreact to news that BP could face penalties of $21bn-plus if found libale for damages over the Macondo oil spill.
Going up — inflation expectations
Following on from CPI and RPI inflation figures earlier this week, comes the Bank of England’s quarterly gauge of public attitudes to inflation — and it’s showing public expectations of inflation for the coming year at their highest level since August 2008:
Ireland: less doomed
Well, this is a turn-up for the books.
Amid strong scepticism about the ability of future Irish growth to offset Ireland’s post-bailout austerity programme — the economy managed to post its first quarterly increase since late 2007 in Q3 2010,
The Eurozone ‘Convergence Carry Unwind’
Or, winners and losers in Europe’s debt crisis.
Goldman Sachs’ global markets guys — Thomas Stolper and Constantin Burgi — have the details:
1. With Spanish bond yields briefly hitting new highs yesterday after the Moody’s announcement,
What the ECB’s bond-buying has lost
What does this Barclays Capital chart remind you of?
Tips of the iceberg? Vertiginous, frigid, Arctic depths?
That might be appropriate. Those figures show that eurozone central banks have lost €5bn on the European Central Bank’s sovereign debt-buying,
The west’s Chindian nightmare unfolds
Chindia seems to be the theme of the week in Asia.
But apart from spurring a bilateral Sino-Indian deal frenzy, the arrival of Chinese premier Wen Jiabao in India on Wednesday seemed also to have stirred confusion and some very odd recriminations.
Markets Live transcript 16 Dec 2010
Markets Live chat transcript for the chat ending at 12:17 on 16 Dec 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHmorning Rabble NHwelcome to Markets Live
Basel III has landed – for real
It’s here — some 200 pages of new capital rules for banks from the Basel Committee.
Click below to get the 77-pager Basel III framework doc:
And below for government guidance in implementing the countercyclical buffers:
Waltzing towards the next, inevitable implosion
Much head scratching in the latest note from Albert Edwards.
The SocGen perma bear says he hasn’t got a clue what is going in financial markets at the moment or why investors believe the economic recovery is sustainable.
Merkel’s nine-point plan
Ahead of that all-important Thursday meeting of eurozone finance ministers in Brussels — German chancellor Angela Merkel has been outlining her nine-point plan for “Wirtschaftsregierung” (literally economy-government) in Europe.
The (not so) curious case of the 9.85m bbl crude oil draw
Wednesday’s weekly EIA oil inventory data is worth coming back to on Thursday.
Not only did the EIA report an exceptionally large and unexpected crude draw, it turns out the draw was the largest of its kind for this time of year since 1989.
Further reading
Elsewhere on Thursday,
- Debunking the silver myths.
- Time’s person of the year.
- The third annual Meanie Awards.
- Different shades of crony capitalism.
- Here come the sans-culottes.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Madoff was Wall Street’s problem
On any measure but profitablity, it has been another miserable year for Wall Street, concluding with Mark Madoff,
Snap news
Breaking pre-market news on Thursday,
- Simon Property Group welcomes decision by Capital Shopping Centres to delay EGM — statement.
- Misys to return £145m to shareholders — statement.
- BG Group makes another discovery in the Tupi field — statement.
Further further reading
For the commute home,
- Economic indicators in the US keep getting better, but unemployment remains the wild card.
- Economists disagree over the future path of inflation.
- The US Senate passes the compromise tax cut deal.
Great Recession not that great after all, apparently
It’s amazing how little a few trillion dollars gets you these days.
We like a wee bit of historical perspective here on FT Alphaville, and this week’s edition compares the costs of the recent financial crisis with those of its antecedents.