January, 2011
Presenting the Irish bailout bond…
Results from the issuance of the European Union’s first ever AAA-rated collective EFSM bond are in.
And here they are (via the market):
***EU 5YR PRICED – €5BN AT MS+12BPS ***
Issuer………….European
Great mysteries of our time
No, not birds falling out of the sky in Louisiana, but this…
… the recent share price performance of Webvan 2.0.
So what (if anything) can explain the move above and beyond the internet retailer’s 180p flotation price?
A bid approach from Wm Morrison? Highly unlikely.
Casualties of the currency war
This is ironic, Brazil.
That’s a Nomura chart showing the Brazilian government as the biggest ‘loser’ of the currency war. You know the war we’re talking about: Brazil was the first and loudest to declare it in 2010.
Hank Greenberg takes on the government, Goldman, taxpayers
Oh, Hank.
In Wednesday’s Wall Street Journal, the AIG godfather inquires “why did we nationalise AIG?”
He’s puzzled, but thinks that the government and Goldman Sachs may have the answer (our emphasis):
ADP surprise
Wow:
Private-sector employment increased by 297,000 from November to December on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from October to November was revised down but only slightly,
Sovereign debt burden-sharing, and free-riding
Collective action clauses in eurozone sovereign debt.
What if they don’t work?
The spectre of CACs has been haunting investors in euro government bonds, ever since the EU proposed revising its current mechanisms for bailing out sovereigns.
An unjustified WTI distortion?
JBC Energy has picked up on the ongoing problem of the WTI-Brent forward curve disconnect on Wednesday.
In a nutshell, while Brent futures prices have been jostling nicely into a flattish curve structure (and even a touch of backwardation at the very front end),
Markets Live transcript 5 Jan 2011
Markets Live chat transcript for the chat ending at 12:25 on 5 Jan 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHright NHlet’s try again NHlooking good
Forget non-performing loans, how ’bout performing ones?
Non-performing loans — those defaulted or nearly-defaulted loans — have naturally grabbed headlines during the US housing crisis. In fact, they tend to be a focus for nearly every bond or bank investor in gauging investment risk.
Where now for HMV?
The price action in HMV on Wednesday:
Now, that’s something of an achievement.
Why you may ask? Well, the City was braced for a dismal Christmas trading update from the troubled books and DVD retailer but Wednesday’s statement,
Further reading
Elsewhere on Wednesday,
- 10 educated guesses, or hopeful stabs, on themes for 2011.
- The rise and rise of capital controls.
- Six reasons most traders fail.
- Talk bearish, invest bullish.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: In the grip of a great convergence
Convergent incomes and divergent growth – that is the economic story of our times, the FT columnist writes.
Snap news
Breaking pre-market news on Wednesday,
- Next confirms full earnings guidance in spite of tough Christmas — statement.
- HMV to close 60 stores after poor Christmas trading; warns on profits and flags concerns about banking covenants — statement.
Further further reading
For the commute home,
- Calculated Risk’s outlook for US housing prices this year.
- A less sunny outlook for jobs creation in the US.
- Mark Zandi of Moody’s brings the (US economic) optimism.
Chart du jour, BofA edition
Bank of America shares since yesterday morning against both the S&P 500 and the KBW bank index:
You already know why.
As Reuters explains, the deal cut with the GSEs is separate from BofA’s ongoing negotiations with private investors and the monolines,
“Risks” for 2011
Under ‘U’ in the Panglossary (our happily optimistic reference portmanteau) one must surely find “upside risk”.
On Tuesday, Bob Doll, BlackRock’s bullish Chief Equity Strategist, showcased his predictions for the year ahead.
Minutes of the December FOMC meeting
The minutes from the FOMC’s meeting on December 14 are out.
At first glance there appear to be no hidden nuggets of insight, and the discussion of where the economy stood near the end 2010 makes for familiar reading:
SEC pokes – and friends – secondary markets
Facebook – as you well know – has friended Goldman Sachs and seemingly poked the SEC into investigative action.
Whilst FT Alphaville was tagging holiday photos from awkward family gatherings, Facebook received a Christmas present from Goldman Sachs and DST Global in the form of a $500m investment via a private,
SNB collateral, an Irish and BP non-love story
Hat-tip to Lorcan for this — the Swiss National Bank no longer accepts Ireland’s government bonds as eligible collateral in its repo operations.
It’s probably not earth-shaking for holders of Irish government bonds,
Risks for 2011
The Eurasia Group, a political risk consultancy, has come out with its list of Top Risks for 2011. We don’t agree with every item, but it’s an interesting overview of the geopolitical tensions to watch this year.
Issuance isn’t the eurozone’s big problem
As far as 2011 tail risks go, everyone’s eyeing heavy, costly, issuance waves of risky debt from vulnerable eurozone sovereigns.
But the problem isn’t the issuance. It’s the asset.
Planned eurozone bond sales are actually down 14 per cent in 2011,
Dirty cash
Fight, fight, fight, fight.
The battle between De La Rue and its French suitor has just turned very nasty.
Oberthur claims De La Rue has lost its most important contract and reckons the publicity shy banknote printer should let the market know.
Inflation in the eurozone
Here’s an interesting datapoint from the eurozone on Tuesday.
According to Eurostat figures, inflation in the euro area increased to 2.2 per cent in December 2010. That was just over consensus expectations of 2.1 per cent.
Markets Live transcript 4 Jan 2011
Markets Live chat transcript for the chat ending at 12:22 on 4 Jan 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHMorning Rabble NHwe’re back NHand welcome to 2011
M&A league tables: what’s in a few numbers?
Isn’t it nice when arch rivals in the unseemly scramble for M&A business can both kick off the new year claiming they’re on top?
The main arbiters of the all-important annual league tables for investment banking deals,
Does Carlos Slim really ❤ silver?
Here’s some juicy stock market RAW to kick off 2011 — Carlos Slim, the world’s richest man is looking to enter the silver market in a big way.
And that big way, according to KingWorldNews, is a bid for Fresnillo,
Un-Desire-a-ble
For Desire Petroleum, 2011 has started the way 2010 ended — with another duster.
This time it’s the Dawn prospect that is dry (last week it was Jacinta and before that Rachel and Liz).
Oh dear:
The plucky Falkland Islands explorer is planning to drill one more well.
Is BP being Shelled?
BP shares opened more than 4 per cent higher on Tuesday after the Daily Mail reported that Shell had come close to making a bid for the distressed oil major during the peak of its Gulf of Mexico oil-spill crisis last summer.