December, 2010
Buiter: ‘European sovereign debt kerfuffle’
Just as New York turns cold, our old friend Willem Buiter goes and warms us right back up.
We posted some fairly bombastic extracts from Buiter’s sovereign debt crisis essay on November 30. And at a Citi roundtable event on Wednesday,
FCIC-ya later
Depending on your point of view, this is either sad, funny, weird, pathetic, or just idiotic:
The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday,
Europe’s stress test was RIGHT
Ancient Greek mothers would often finish mythic tales told to their children (wholesome stuff like Oedipus, Electra and so on) with ‘…and then the story came true’, goes an apocryphal historical canard.
CSC tells Simon to come back with a proper offer
Capital Shopping Centres has responded to Wednesday’s highly indicative 425p per share cash offer from Simon Property Group with a resounding no – and asked the Takeover Panel to make the US mall operator Put Up or Shut Up.
An Irish bailout – barely
Fresh off the wires:
DUBLIN, Dec 15 (Reuters) – Ireland’s parliament voted in favour of an 85 billion euro EU/IMF bailout on Wednesday, paving the way for the IMF to approve its portion of the funds later this week.
‘A new era of Treasury price volatility’
Last week’s US Treasury sell-off; deficit despair or recovery-related optimism?
What about a not-so-secret stimulus encouraged by Fed chairman Ben Bernanke?
Former Lehman Brothers trader and now prolific Twitterer,
CPI yawn
The November CPI came in roughly as expected, with the headline number increasing 0.1 per cent, slightly less than in October as rises in energy prices slowed.
And after four straight months of remaining flat,
HM Banks ad infinitum
Calling experts in placing shares — a lot of shares:
… Your Majesty needs you.
That’s a chart from the National Audit Office’s just-released report on British taxpayer exposure to UK banks rescued during the crisis.
Salgado the shrewdie
When the Spanish economy minister sounds exactly like a day trader dispensing market-savvy tips on government bonds:
RTRS-SPAIN’S ECON MIN SALGADO SAYS WITHIN THREE MONTHS SPAIN’S RATINGS OUTLOOK WILL TURN POSITIVE
RTRS-SPAIN’S ECONOMY MINISTER SALGADO SAYS VOLATILE SPREADS DUE TO LOW YEAR-END VOLUME
Well,
King of the WikiLeaks – and global bailouts
WikiLeaks is making for all sorts of financial fun.
Especially where it concerns Mervyn King.
Earlier this month we learned that the Bank of England governor had some naughty things to say about the then-future UK chancellor and prime minister.
Markets Live transcript 15 Dec 2010
Markets Live chat transcript for the chat ending at 12:26 on 15 Dec 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHHola Rabble NHwelcome to Markets Live
SuperTramp
Ouch.
Stock market darling SuperGroup has come back to earth with a bit of a bump on Wednesday morning:
The reason (aside from some understandable profit taking) is a warning in today’s half year results from the fast growing fashion retailer that rising raw material prices – ie cotton – may affect gross margins in the year to April 2011.
Mucho euro negativity
You have Moody’s to blame for euro volatility this morning:
On Wednesday the euro dropped again after Moody’s put Spain on review for a downgrade. But you can see pressure on the euro in other market corners too (again).
Good luck, Mr Gross
Pimco’s Bill Gross last week poured $4.4m of his own money into the municipal bond market in the States — which would be, you know, that thing that’s been tanking ever since the Build America Bond programme looked set to expire.
Simon says, we’ll bid for Capital Shopping Centres…
… but there are lots of strings attached and the bid is probably 15-20 pence short of what shareholders want.
Highlights from another letter sent by Simon Property Group (SPG) to the board of Capital Shopping Centres (CSC) on Wednesday morning:
Spain: the storm clouds gather
From Moody’s early on Wednesday morning:
Moody’s puts Spain’s Aa1 ratings on review for possible downgrade
Short-term ratings are affirmed at P-1; FROB’s Aa1 rating also placed on review for possible downgrade
London,
Further reading
Elsewhere on Wednesday,
- Commodities: An amateur’s guide.
- Best Christmas card picture, ever.
- Live-blogging GE’s annual meeting.
- The unintended consequences of US monetary policy.
- The top reason to be scared right now:
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why rising rates are good news
Terrified by irresponsible fiscal and monetary policies, the bond market vigilantes are out in force,
Snap news
Breaking pre-market news on Wednesday,
- Simon Property Group makes highly conditional 425p a share cash offer for Capital Shopping Centres — statement.
- Novartis to take full control of Alcon after sweetening bid — statement.
Further further reading
For the commute home,
- Does inequality cause economic crises?
- Wall Street holiday party watch.
- Correlation between the “poor sales” component of the NFIB survey and unemployment.
- Economists are upgrading their Q4 growth forecasts after strong retail sales.
Primary concerns with secondary markets
Secondary transactions — sales of private stock by company shareholders via private exchanges or placements — have received increased attention in the last few months.
And for good reason. NYPPEX numbers obtained by FT Alphaville claim that the secondary market for privately held companies is worth $9.6bn in 2010,
Risk retention and RMBS
The San Francisco Fed has a new paper that tries to answer the question of whether mandatory risk retention for securitisers of RMBS is a good idea.
The short answer is ‘yes’. But for those among you who get excited by this kind of thing (we know you’re out there),
FOMC statement
UPDATE: In our haste we posted the statement from December 3 earlier. Apologies.
Here is the right one:
Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing,
Small biz outlook: less grim, still not great (like everything else)
Looks like the US economy is now in the age of Indicators That Are Improving But Remain Historically Weak For A Recovery.
On top of this morning’s retail sales and PPI releases, there was also the latest monthly index of small business optimism from the NFIB — and it appears to follow suit:
The beast with two backs
We mean the greenback and the redback, naturellement.
USD/CNY will likely be concentrating more than a few minds in 2011, with investors looking for ways to play the reflation trade, and thus, a rebalancing trade,
Not convinced by CoCos? How about COERCs?
Forget CoCos.
Those squirrely Contingent Convertibles — bonds which would automatically convert into equity once a bank’s capital ratio falls below a certain trigger — are still riddled with question marks.
From Hamp footnote to Hamp legacy
A footnote, from the US Treasury’s Hamp programme.
The Home Affordable Modification Plan was created in the spring of 2009 with the stated goal of keeping delinquent homeowners in their houses. It’s now widely regarded as a failure — with just 519,648 permanent modifications completed.
Retail sales and PPI warm-up for the FOMC
You wait all morning for the 0.8 bus and then three come along at once.
Three US indicators were released on Monday all showing 0.8 per cent increases in advance of the final FOMC meeting of the year.
The corroding core
Belgium has six months. The rest of the eurozone core has a problem.
Standard & Poor’s didn’t shift the Belgian sovereign’s AA+ rating from a stable to a negative outlook on Tuesday for the usual reasons you might expect with,
Central bank SOS
Or, the ECB provides another reason to steer clear of Hungary.
This legal opinion on proposed government changes to the Hungarian central bank (the Magyar Nemzeti Bank, or MNB) looks like a pretty big red alert to us: