February, 2011
Do you believe in coincidence? [updated]
Via Reuters on Wednesday afternoon:
RTRS-D.BOERSE<DB1Gn.DE> SHARES SUSPENDED – REUTERS DATA 15:21 09Feb11 RTRS-D.BOERSE<DB1Gn.DE> SHARES SUSPENDED FROM TRADING IN FRANKFURT – REUTERS DATA
And Dow Jones:
‘The real sugar community’ vs ‘parasitic computer-based traders’
The FT reported on Wednesday that an industry body representing big sugar traders has launched an attack on their high-frequency and algorithmic-based counterparts — along with the New York-based futures exchange that hosts both groups.
Where did Ireland’s secret liquidity go?
Eonia went a bit doolally at the end of January.
Many blamed a lack of front-loading in bank liquidity management as they watched Europe’s key overnight lending rate drift above one per cent for the first time since June 2009.
The inflation disconnect, charted
Atlanta Fed President Dennis Lockhart was talking about discrepancies between Americans’ view of inflation and that of the US central bank in his Tuesday ‘disconnect’ speech. But you can see that disconnect most clearly in the discrepancy between market interest rate expectations and the Fed’s actual rates.
The earnest importance of being systemic
It’s the question that’s seemingly stumped Tim Geithner: how to identify a priori systemically important non-bank financial institutions.
The Federal Reserve on Tuesday suggested further rules regarding who might be considered for attention by the Financial Stability Oversight Council (FSOC) as per section 113 of Dodd-Frank.
Irish bank bond haircuts by the numbers
With talk of haircuts for holders of senior Irish bank bonds swirling among politicians and the market, here’s a number-laden note from Goodbody Stockbrokers.
The Irish house has crunched some bond-specific figures in a blockbuster piece of research sussing-out Ireland’s debt sustainability.
Markets Live transcript 9 Feb 2011
Markets Live chat transcript for the chat ending at 12:39 on 9 Feb 2011. Participants in this chat were: Neil Hume, FT Joseph Cotterill bryce.elder NHMorning Rabble NHwelcome to ML
‘Nokia, our platform is burning.’
Perhaps Nokia chief executive Stephen Elop is going to ditch the Meego OS and go with Windows Phone 7 after all.
Breaking on Reuters this Wednesday morning:
NOKIA <NOK1V.HE> ENDS FIRST MEEGO PHONE PROJECT BEFORE LAUNCH -SOURCES
NOKIA <NOK1V.HE>
LSE/TMX – a defensive merger?
The London Stock Exchange does not have a great track record of consummating deals (remember the proposed Deutsche Borse transaction of the 2001?) or grabbing big strategic opportunities.
So will its’s proposed merger with TMX Group,
The times they are Xchanging [updated]
Where to begin with Wednesday’s car crash statement from business process outsourcer (whatever that means – Ed.) Xchanging?
The profit warning? The massive goodwill write down? The two ‘one-off’ hits to the P&L account? The departure of the CEO? The scrapped dividend? Or the market reaction?
Let’s start with the market reaction.
Anglo Irish, 2006-2011, in memoriam
Presenting Anglo Irish in 2006 (‘Managing for growth in a complex environment’):
Record funding growth…
More than 350 interbank relationships…
No surprises on asset quality…
Further reading
Elsewhere on Wednesday,
- ‘Delete ur bbm chatr.’
- How do you bail out a central counterparty?
- What Shanghai’s property bubble has cost.
- Hedge funds: vain, arrogant, and status-obsessed.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Britain’s experiment in austerity
Between 2010 and 2015, the UK is forecast to have the third largest reduction in the share of government borrowing in national income among 29 high-income countries:
Snap news
Breaking pre-market news on Wednesday,
- London Stock Exchange and TMX agree to £3.7bn all-share merger of equals — statement.
- Xchanging warns on profits, scraps dividend, CEO quits, takes £100m goodwill hit — statement.
Further further reading
For the commute home,
- Research or insider trading? A guide, in chart form, by Downtown Josh Brown.
- Why employers aren’t hiring is still a mystery.
- Mind vs machine.
- Small biz optimism hits a 3-year high in the US.
Jeffrey Lacker’s inflation disconnect
Richmond Fed president Jeffrey Lacker’s speech on Tuesday morning inspired quite a bit of commentary because of his recommendation that the Fed consider stopping QE2 before its scheduled completion. (See Real Time Economics,
Insider trading investigations, continued
The insider trading investigations continue — and move beyond expert networks. From the FT on Tuesday:
Federal prosecutors have charged three hedge fund portfolio managers and a hedge fund analyst with insider trading.
BoI refuses to go quietly
Bank of Ireland won’t bow to the inevitable.
Monday after (stock) market hours statement:
The Bank is discussing a number of structures with the State to raise the requisite Core Tier 1 capital by 28 February 2011.
Ireland’s secret liquidity is unbelievably cheap
This, from the Irish Independent, is very interesting:
IRISH banks are paying an interest rate of less than 3pc on the €51bn of ‘emergency liquidity assistance’ (ELA) that has been sanctioned for them by the Central Bank of Ireland.
The missing bits from Merrill’s Ireland note
Last week, Michael Lewis brought you his take on Ireland, a Vanity Fair epic on the nation’s real estate and banking bust. He also brought us the story of Philip Ingram, a zoology student and former Merrill Lynch banking analyst.
China’s lunar rates rise
Everyone was expecting a China rate rise at some point. But today? Tuesday?
Officials at the People’s Bank of China just announced they’ll increase the one-year yuan lending rate to 6.06 per cent from 5.81 per cent,
In Pharaoh’s currency markets
Noted at pixel time — direct (and rather impressive) intervention by Egypt’s central bank in the Egyptian pound, just two days after banks reopened:
Not a great sign for capital flows, is it?
Markets Live transcript 8 Feb 2011
Markets Live chat transcript for the chat ending at 12:25 on 8 Feb 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola Rabble NHwelcome to another ML
On benchmarks creating bubbles
Here’s an interesting thought for a relatively quiet Tuesday: Does the investment industry’s tendency towards cap-weighted indices cause bubbles?
We arrive at it slightly tangentially via Steve Johnson’s FTfm story on investors considering a move towards fundamentally-weighted indices.
The new strongmen of Asia’s looming currency wars
Some intriguing movements are afoot on the currency front in Asia, where the Taiwanese dollar, the Indonesian rupiah and the Korean won have lately been the region’s strongest performers.
It’s all part of a steady intensification of regional inflation jitters — and a looming cycle of back-to-back interest rate increases and possibly,
A $55bn bid for Colgate?
Here’s something for Markets Live guest Jean-Marc Huet to consider over his mid-morning Marmite rice cracker – should Unilever launch a $55bn cash offer for Colgate Palmolive?
It’s a mega-deal that’s been rumoured in the past,
What lies in Greek RMBS
Greece has lots of problems.
Yet unlike Ireland or Spain, a collapsed housing market (even under austerity) isn’t one of them. But…
This is Grifonas Finance No. 1.
Grifonas is a Greek RMBS transaction launched in 2006 (here’s the prospectus).
Further reading
Elsewhere on Tuesday,
- ‘The fall back position is for QE3′.
- If only BP had used oobleck…
- On taking your triple-A for granted.
- The spectre of releveraging.
- Just how useful are initial weekly claims?
- Sarah Palin vs.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Which revolution will Egypt choose?
Events in Egypt are so dramatic that it is tempting to regard each day as a potentially decisive turning point,