January, 2011
Markets Live transcript 19 Jan 2011
Markets Live chat transcript for the chat ending at 12:27 on 19 Jan 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHhola NHmorning NHetc
China’s bond purchasing games
Beyond the spotlight glaring on China’s leader Hu Jintao as he kicks off his US visit are some intriguing movements in Beijing’s foreign reserves management.
First, we had China’s pledge to buy eurozone bonds amid its recent charm offensive in Europe.
The bid story that won’t go away
More on those Smith & Nephew bid rumours, this time from Merrill Lynch, whose investment bankers have reportedly been trying to put the medical devices group together with a heavily indebted US rival.
Confirmed, the HMV credit crunch
In light of recent comment on credit insurance cover, HMV Group wishes to clarify that, following the peak trading period, credit insurers are reviewing the level of cover they provide on the Group.
What price Europe? Or, just the EFSF bond
In less than a week the first tranche of the new EFSF bond will price.
Excited yet? Perhaps you should be.
As Citi pointed out in a Tuesday note, the debt will effectively act as a proxy for the fiscal state of the eurozone.
Further reading
Elsewhere on Wednesday,
- Are parts worth more than the whole?
- With sterling, beware of quicksand.
- Some great investing mea culpas.
- A video guide to asset-pricing theory.
- Now playing in America:
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: East and west are in it together
Size matters. If we look only at China’s average level of development, we see a country with much the same standard of living as Thailand,
Snap news
Breaking pre-market news on Wednesday,
- Pearson raises 2010 profits guidance to £850m — statement.
- Kesa Electricals says weather had 2 per cent impact on sales — statement.
- ASOS retail sales up 59 per cent – statement.
Municipal nut, meet your sledgehammer
What’s good enough for GM is apparently good enough for California and Illinois.
That’s the argument made by University of Pennsylvania law professor David Skeel in an op-ed in Tuesday’s WSJ:
Governors across the country are making similar promises [to balance budgets],
Further further reading
For the commute home,
- A Freddie Mac review finds that Citigroup is still selling defective mortgages.
- Hyperbolic interpretations of Hu Jintao’s comments on the USD.
- On Goldman’s decision to offer Facebook shares only to foreign investors,
Volcker rule — coming, slowly, to a bank near you
Look on the bright side, we now know which rules the rulemakers will follow to get us to the Volcker rule. Some of them, at least.
The Financial Stability Oversight Council on Tuesday released its six-month study into the Volcker rule and held its third public meeting.
The full story of the Ibanez case
Back in 2005 in Springfield, Massachusetts…
What happened next currently has the mortgage and housing market palpitating.
US Bank filed a foreclosure complaint on the above loan, but soon found itself embroiled in a legal battle which would become known as the ‘Ibanez’ case.
Is this the beginning of the end for HMV?
I have been told by two music and entertainment companies that they can no longer get credit insurance for additional sales to HMV. Here is an extract from an e-mail sent by the “head of credit and collections”
Not a fat finger, just falling US Treasuries…
The spike in 10-year US Treasury yields just after November TIC data came out:
There was talk of a fat finger on Tradeweb, but the company has since quashed it. Well that’s comforting (ahem, not).
Silver shortage rumours abound [updated]
The blogosphere has been all-a-flurry with talk of silver bullion shortages this week — although mainly down to one particular website.
Zerohedge.
On Monday, the anonymous blog stated that the UK was the latest region affected by growing silver shortages after the small-scale British bullion dealer ‘Bullionbypost’ notified clients that the company had no remaining silver bars in stock.
Doing more with less (EFSF), part two
What’s left if we’re not going to get a full-blooded expansion of the eurozone’s sovereign bailout fund?
Um, not a lot, it looks to us. A ragbag of rejigged credit enhancements; lower loan rates; possibly a small programme of buying up distressed sovereign debt markets.
Doing more with less (EFSF), part one
There was definitely yesterday a discussion about increasing [the European Financial Stability Facility] to more than 440 billion [euros], so increasing the total [to] 750 billion, but the Eurogroup has yesterday rejected that idea.
The mechanics of Irish euro-printing
The Irish Independent last week drew attention to a much-missed detail in the execution of Ireland’s emergency loan programme.
As it turns out, the Irish central bank has been partly financing the programme’s loans with the printing of its very own euros.
Apple and Steve Jobs
There’s really no need to worry says Birinyi Associates.
AAPL is currently down 4.6% after CEO Steve Jobs announced he will be taking medical leave. This will be his third leave of absence since 2004.
Chinese inflation through surging online searches
Inflation in (simplified) Chinese is 通 货膨胀.
Standard Chartered are back with another ‘wisdom of China’s online crowds’ piece, or a look at Chinese consumer trends through internet searches. There’s a difference this year though.
Markets Live transcript 18 Jan 2011
Markets Live chat transcript for the chat ending at 12:25 on 18 Jan 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola NHand welcome to Markets Live
Record-breaking, forecast-busting UK inflation
Hitting the tape now, some uncomfortable reading for the Bank of England’s Monetary Policy Committee.
Via Reuters:
RTRS-UK DEC CPI +1.0 PCT MM, BIGGEST EVER MM RISE; +3.7; PCT YY (CONSENSUS +3.3 PCT YY),
IG’s disastrous Japanese foray
Well, this is pretty embarrassing.
Spread better IG Group has taken a full write down of the goodwill associated with its Japanese business FXOnline — its biggest operation outside of the UK.
From a company press release (emphasis ours):
Chinese consumers, going platinum
One for super-cycle fans and/or commodity bulls. A chart from a Citi note on metals and mining, arguing that slower industrial growth in China’s new five-year plan (and the one after that) will be replaced by lots and lots of commodity-munching Chinese consumers:
Further reading
Elsewhere on Tuesday,
- The crucial thing to watch when investors dump Apple on Tuesday.
- Why the SEC should make Steve Jobs talk.
- The emerging markets-commodities disconnect.
- ‘Sorry about that’:
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Francis Fukuyama: US democracy has little to teach China
What is the Chinese model?, asks Fukuyama, author of the End of History and the Last Man.