January, 2011
Snap news
Breaking pre-market news on Friday,
- Capital Shopping Centres revises terms of Trafford Centre acquisition; claims NAV is up to 625p a share — statement and statement.
- H&T Group to report forecast busting figures due to strong growth in gold purchasing business — statement.
Five (hundred) questions on the Facebook flogged horse
There’s something ickily uncomforting about the Facebook/Goldman mash-up — and not just the scars of a well flogged horse. A well flogged horse going public with financial information by 2012, no less.
Further further reading
For the commute home,
- The Daily Show for MBAs.
- Why Facebook and others don’t want to go public.
- Goldman’s Facebook pitch or Nigerian email ‘opportunity’?
- Lloyd Blankfein’s secret Facebook feed.
The Fed in 2011
We noted a few weeks ago that the futures market was probably getting ahead of itself in predicting that the Fed would begin tightening policy sometime after August of this year.
This passage from the minutes of the last FOMC meeting…
Japan: land of rising contrasts
Oh dear.
From Bloomberg on Thursday:
Japan’s top government spokesman said the country’s fiscal situation is “approaching the edge of a cliff,” underscoring Prime Minister Naoto Kan’s call for a national debate on raising the 5 percent sales tax.
The Belgians are still waffling
It’s Day 207 in the Big Belgium waffle house:
RTRS-BELGIAN GOVERNMENT MEDIATOR STEPS DOWN AFTER PROPOSAL FOR COALITION TALKS FAILS-PALACE
17:01 06Jan11 RTRS-BELGIAN GOVERNMENT MEDIATOR STEPS DOWN AFTER
What the China risk is
There’s been a bit of (somewhat post hoc?) concern in recent days over the cash crunch in Chinese interbank markets.
The one-week Shanghai Interbank Offered Rate went up, up… and then came down. Same stuff in the seven-day repo rate,
President Trichet are you watching? [updated]
Because it looks like it might be time to fire up the Securities Markets Programme again.
RTRS-PORTUGUESE/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD WIDENS FURTHER TO 414 BPS, 26 BPS WIDER ON DAY
RTRS-PORTUGUESE/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD HITS WIDEST SINCE DECEMBER 1
RTRS-SPANISH/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD WIDENS 18 BPS TO 258 BPS,
Burdensharing for bank bondholders is here!
It’s arrived! Straight from the European Commission — the much-anticipated consultation paper on haircuts for (dum dum dum) investors in future bank debt.
The press release, with our highlights:
Following the publication of a Communication on 20 October 2010 on a European crisis management framework for the financial sector (see IP/10/1353),
Thomas Hoenig: Why I dissented
Thomas Hoenig, Kansas City Fed President — who is retiring next year — obviously feels a bit hard done by when it comes to how his role as an FOMC dissenter was portrayed by the press.
The full extract of his Wednesday speech to the Central Exchange,
Lowering claims, lowering expectations
Another day then and another round of jobs numbers to put the cautiously into cautiously optimistic.
Payrolls are out Friday and with them a better idea of the extent and pace of improvement — Reuters reports that nonfarm payrolls are expected to have increased 175,000 last month,
Claiming less
One labour market indicator that has steadily improved in the last several months is initial weekly unemployment claims.
There was a slight increase last week, but as we normally point out, this is a volatile number and we pay more attention to the four-week average,
Shadow inventory backlog still growing
From S&P’s latest shadow inventory report, released earlier this week:
Because of the volume of distressed homes either on the market or waiting to be remarketed for sale, our estimate for how long it will take to clear the backlog continues to grow.
The problem with Europe’s bail-ins
Here’s something to ponder while we wait for the European Commission’s consultation document on haircuts for senior investors in Europe’s banking debt.
It’s what all this talk of Basel III — plus burdensharing,
Victims of Greek austerity – Greek clubbers
The Greek government’s crackdown on tax evasion has taken it all the way to…
… Some nightclubs in Athens.
Fresh from the Hellenic Republic’s Ministry of Finance:
The Financial and Economic Crime Unit (SDOE) of the Ministry of Finance has proceeded to suspend the operation of a number of bars and night clubs in the broader Athens area for tax offences.
Markets Live transcript 6 Jan 2011
Markets Live chat transcript for the chat ending at 12:30 on 6 Jan 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHRight NHwe are back NHand that looks much better
Does RBS need to take an Irish hit?
Will RBS be the next bank to increase bad loan provisions for Ireland?
That’s the question traders are asking on Thursday morning after KBC followed Lloyds Banking Group and warned of a deterioration in its Irish loan book (alongside irregularities in a British leasing subsidiary).
Waiting for a senior bank bond haircut…
Here’s the action in European financial CDS as the market waits for the European Commission to release a consultation paper outlining its plans to haircut senior bank (not sovereign) bondholders. According to Ambrose Evans-Pritchard of the Telegraph this will happen today,
Portugal bond-buying estimates du jour
From a Goldman ‘one year on’ note on the euro crisis on Thursday (emphasis ours):
While the pros and cons of external technical assistance (and a break from market funding) are being debated, the ECB remains the main buyer of Portuguese government securities. Of the latter,
Europe’s 2011 pressure points
Courtesy of Nomura — some possible European ‘stress’ dates to look out for this year (just think of 2010′s Irish guarantees in September or Spanish redemptions in July):
Print, cut and paste on your desk.
Further reading
Elsewhere on Thursday,
- Biggie on business: The 10 Crack Commandments.
- Goldman’s secret Facebook pitch — or Nigerian email opportunity?
- For every Facebook to toast there’s an Amp’d mobile to mourn.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Robert Zoelick: Free markets can still feed the world
The answer to food price volatility is not to prosecute or block markets, but to use them better,
Snap news
Breaking pre-market news on Thursday,
- Draka recommends €17.5 a share offer from Prysmian; says no contact with Chinese bidder Xinmao since December 20 — statement and statement.
- Mothercare warns on profit;
Another good day for Disney
Like a modern day Aesop’s tale, Mickey Mouse is outfoxing a bull market.
The Walt Disney Company was the biggest mover on the Dow Jones on Wednesday, up a smidgen over two per cent at pixel time.
Further further reading
For the commute home,
- The world’s riskiest debtor nations (and USA states).
- Is the commercial mortgage market healing?
- A bizarre US labour market — in which Mike Mandel predicts a massive rise in employment this year.
James Hamilton on the strange politics of the debt ceiling
One thing we didn’t bring up in our previous post about House Republicans’ backpedaling on their deficit-reduction pledge is the ongoing meme that they might refuse to raise the debt ceiling.
We’re not exactly sure how serious a problem this is,
More yuan appreciation…for real?
A report Wednesday morning from Reuters, which spots an article in a Chinese-language newspaper:
China will let the yuan rise about 5 percent against the dollar in 2011 to combat inflation, an official newspaper said on Wednesday,
New Congress, old deficit
Like its predecessor, the 112th Congress has proven it’s possible to shoot oneself in the foot while putting it in one’s mouth.
House Republicans said in their Pledge to America that:
With common-sense exceptions for seniors,
When is the SPY ETF’s value not really its value?
Here’s a market curio for Wednesday.
The following chart shows the historical indicative net asset value (iNav) of the SPDR S&P 500 ETF versus its actual net asset value at the end of the day:
As can be seen in the comparative performance at the bottom of the chart,