December, 2010
Competition time! [we have a winner]
Courtesy of Nomura, we have a pair of tickets to give away for this year’s Varsity Match.
So we’re asking for a suitable caption on this:
Tickets go to the best entry submitted in the comment section below.
Further further reading
For the commute home,
- No, people are not collecting 13 more months of unemployment insurance.
- Private equity wins, creditors lose.
- Why employees got the payroll tax cut.
- Hiring will rise in 2011.
Risky business in correlation and volatility
Don’t short schadenfreude yet – it’s still tough at the hedgies.
From Reuters on Tuesday:
The average hedge fund inched up 0.2 percent last month [on the Hennessee Hedge Fund Index] after gaining 1.95 percent in October,
BABs expiration: still on schedule
Monday night’s compromise on extending the Bush tax cuts and unemployment insurance also kept alive policies that were introduced in the 2009 stimulus package — but one was conspicuously left out.
From Bloomberg Businessweek:
An unbalanced take on imbalances
Unbalanced, and thus blisteringly honest.
Fred Goodwin, “Mr Macro” strategist at Nomura, unplugged:
Is there any justice?
When a child misbehaves, parents send them to their room and take away Facebook privileges.
A balanced take on imbalances
What does this chart mean to you?
For central bankers such as Ben Bernanke and Mervyn King, these international imbalances were partially to blame for the financial crisis. Reverse capital flows smashed open a proverbial Pandora’s box of financial fun:
Treasuries ditched
The 10-year US Treasury on Tuesday:
And the 30-year:
Bloomberg attributes this to the tax deal, and the subsequent combination of better expected economic performance in the US and its contribution to the deficit problem.
Send for the chimp
The S&P 500 appears to be at its highest intraday level since September 2008:
Which means it’s time for …
Building a better European stress test
Peaking over the horizon this Tuesday — some more European banking stress tests.
Via Reuters:
Dec 7 (Reuters) – The European Union will begin a new round of tougher stress tests for banks in February as part of its response to dealing with the debt crisis,
There’s something about the Italian interbank market
Here on FT Alphaville, we’ve often written about the increasing trend towards backing interbank trades with quality collateral.
So far it’s come across as an ad hoc response to post-crisis credit risks,
Desert(ing) CDS
The world of credit default swaps = one huge, amorphous, indefinable ocean of trillions worth of contracts, right?
How ’bout a dwindling, drying, puddle, instead?
Citi credit analyst Michael Hampden-Turner is worried about short-term climate change,
Goldman hedges its bets
Having announced with much fanfare last week a new, more positive view on the US economy, Goldman Sachs is back-tracking ever so slightly.
Now, the bank still thinks real GDP growth of 2.7 per cent next year and 3.6 per cent the year is the most likely outcome,
Markets Live transcript 7 Dec 2010
Markets Live chat transcript for the chat ending at 12:17 on 7 Dec 2010. Participants in this chat were: Neil Hume, FT bryce.elder NHMorning Rabble NHwelcome to Markets Live
BIS wars over Ireland
If the European crisis has taught us anything, it’s that …
… BIS banking statistics are open to interpretation.
Last Thursday, the FT used BIS numbers from June to illustrate that Irish banks are among the most exposed to some of the other weaker eurozone nations.
Glencore’s floating ambitions
The Telegraph has become the latest observer to kick along speculation that Glencore is gearing up for a mega-float in the City, reporting on Tuesday that the secretive Swiss-based commodities trader is understood to be preparing for a £31bn City listing as early as next April.
Fiscal pooling in the eurozone?
European peripheral bonds are little changed on Tuesday morning:
Now that’s somewhat surprising given the news flow of the past 24 hours.
In that time Chancellor Merkel has ruled out the idea of shared bond issuance in the eurozone,
Let’s all go on a European margin holiday
Here’s something to ponder after what seems to have so far been an unproductive meeting of European finance ministers in Brussels.
Deutsche Bank’s Gilles Moec is putting the ‘Plan B’ in the ECB — with a suggestion for a shiny new eurozone liquidity mechanism.
Further reading
Elsewhere on Tuesday,
- Trough to peak on everything.
- Bank of New York Mellon’s (accounting) spin.
- “The problem is the handouts demand more austerity.”
- And budget day — revenge of the Irish?
- Bill Ackman on how to make a fortune — with US housing.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: No escape from Europe’s debt woes
The unpleasant truth emerging from a World Economic Forum meeting in Dubai this week is that the whole world would be shaken by an economic meltdown within the EU,
Snap news
Breaking pre-market news on Tuesday,
- HSBC placing 6m Icap shares for chief executive Michael Spencer — statement.
- Tesco reports 3.6 per cent like-for-like sale growth in Q3 — statement.
- Xstrata to spend $23bn on new mines by 2016 — statement.
Further further reading
For the commute home,
- The chairman and founder of the New York Hedge Fund Roundtable thinks a compensation cap on hedgies would “deprive the media of a great punching bag they have”.
- A paper on the ongoing disinflation in the US by the San Fran Fed.
Taxing times
The FT reported earlier today that a deal on the extension of the Bush tax cuts is imminent:
President Barack Obama has given his explicit approval for a deal that would allow all Bush-era tax cuts to be extended for two years as long as unemployment benefits were also continued,
Private equity wins again
We said previously that the private equity industry, in addition to having a decent year in dealmaking, was probably relieved for having come through financial reform with hardly a scratch.
Although we doubted anything would happen,
DoJ launches assault on mini-Madoffs
Question — was Operation Broken Trust:
a) An unusually self-referential piece of nomenclature from US government officials;
b) Likely to have sent traders at certain hedge funds somewhat white-faced when whispers of a big DoJ announcement hit newswires on Monday;
Bernanke and the real costs of QE2
We’ve said a few times that there are right ways and wrong ways to criticise QE2. One of the wrong ways, it seems to us, is to say that the policy hasn’t had its intended effect on markets.
The goal
Danube flotsam, jetsam, and junk
This is another appeal to readers.
FT Alphaville has looked — and looked hard — for reasons to invest in Hungarian government bonds. We can’t find any. Nor can we quite see why Hungary isn’t among the European sovereigns being mauled by a bond market currently on the prowl.
Madoff performance was “magic,” according to HSBC
Bejesus. The Madoff trustee complaint against HSBC makes for good reading.
For background: the court-appointed trustee for Madoff’s failed investment business is suing HSBC for $9bn — claiming, as in the JP Morgan case,
More confessions from a banknote printer
So much for De La Rue’s claim that the bid approach from French rival Oberthur was highly preliminary and opportunistic.
Oberthur Technologies’ press release.
Francois-Charles Oberthur Fiduciaire S.A.