February, 2011
Snap news
Breaking pre-market news on Tuesday,
- HM Treasury raises bank levy target to £2.5bn — statement.
- UBS Q4 results disappoint — statement.
- BG Group reports forecast beating Q4 figures; provides strategy update — statement and statement.
The Puerto Rico pensions debacle
And you thought that Illinois pensions were enough to keep the SEC busy.
From Bloomberg on Friday:
UBS AG may be sued by the U.S. Securities and Exchange Commission over the sale of mutual funds that bought $1.5 billion in bonds Switzerland’s largest bank had underwritten in Puerto Rico.
Further further reading
For the commute home, and while you’re waiting for AOL to become cool again,
- Can we trust TIPS to reliably predict future inflation?
- Commercial real estate prices are rising, except in places where they’re falling.
Harbinger exits Inmarsat
Proving once again that lock-up arrangements with big investment banks aren’t worth the paper they’re written on, news reaches the FT Alphaville desk that Philip Falcone’s Harbinger Capital Partners is placing its remaining 14 per cent stake in Inmarsat.
M&A, high yield update
Courtesy of Thomson Reuters:
The value of worldwide mergers and acquisitions totals $309.6 billion through year-to-date 2011, a 69% increase over last year at this time and the strongest start for M&A since 2000,
Economic forecasting delusions, cont’d
Regular readers of FT Alphaville know our fascination with — and deep skepticism of — macroeconomic forecasting.
To keep the meme going, we pass along three recent entries on the topic from around the econoblogosphere.
Hands back once again
None other than Guy Fawked himself.
Breaking on Sky News:
Guy Hands, the private equity tycoon who last week lost control of EMI, the music company, is in talks to buy Chaucer Holdings, the Lloyd’s of London insurer,
Merrill’s scrubbed Ireland note
It was here. But Merrill wanted it taken down. Bye By, Philip Ingram’s research.
From the FT mailbag
A particularly amusing rant from respected chartist Brian Marber:
Dear Sir
I know you wont’t publish this letter, because from past experience I know that you never do publish anything of worth about technical analysis in any section of the ‘paper,
An accounting boost for CoCos
How regulators can build a market for reasonably-cheap-to-issue Contingent Convertible capital, by Barclays: Step 1) Eliminate mark-to-market accounting to ensure that asset price swings never result in a CoCo trigger being reached…
A senior haircut precedent in … Denmark
Something is interesting in the state of Denmark.
Over the weekend, Amagerbanken, a smallish Danish bank filed for bankruptcy. Its assets now have to be transferred to Denmark’s bad bank curating-company Finansiel Stabilitet (FS),
Gold is good to go at JPMorgan repos
JPMorgan, one of two tri-party clearing banks in the US, will now accept your bullion.
From a February press release:
Gold can now be used as collateral to satisfy securities lending, repo, pledge and other obligations with counterparties.
King Mervyn
Via the New York Times, which is apparently trying to explain Bank of England governor Mervyn King to an audience of Martians:
To Mr. King’s defenders, however, those who raise such fears do not know the heavy burden of running the Bank of England from its palace-like base on Threadneedle Street at the heart of the City,
EFSF mission creep, a collateral story
Is it just us, or what?
Increasingly, Europe’s bailout fund is starting to work like a great general-purpose bucket of high-quality collateral for the eurozone.
As in: peripheral sovereign bonds don’t have collateral attached,
Merrill’s missing Ireland note
One of the most damning bits of Michael Lewis’ “When Irish eyes are crying” article concerns a zoology student, ‘business relationships’ and a missing Merrill Lynch note.
Here’s the extract via Barry Ritholtz over at Big Picture:
Markets Live transcript 7 Feb 2011
Markets Live chat transcript for the chat ending at 12:23 on 7 Feb 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola markets Rabble NHand welcome to ML
The pre-emptive UK rate hike
Citigroup’s Michael Saunders and Ann O’Kelly, on this week’s Bank of England rate decision:
We expect that the MPC will leave rates on hold at the upcoming [February 10] meeting. However, we believe it may well be a much closer call than many expect,
UK rate rise jitters
What’s this? Some pre-MPC nerves in the government bond market:
RTRS-UK 10-YEAR GILT YIELD RISES TO 9-MONTH HIGH AT 3.865 PCT
HuffPo proves there IS (a lot of) money in blogs
It’s a question that has plagued bloggers since – well, since the industry began its hitherto short life. Some manage to sell much more advertising than others but the Truly Big Moment comes when a big entity walks in and puts a pile of cash on the table.
The $29bn problem with one-way CSAs
That’s $29bn for just five banks with derivatives deals covered by one-way credit support annexes (CSAs).
For the entire financial system it might be closer to a whopping $150bn, according to Risk’s clever Duncan Wood.
Further reading
Elsewhere on Monday,
- ‘I’d take 1973 over today in a heartbeat.’
- The five quadrillion dollar asset.
- When AOL bought Arianna.
- Or was HuffPo bought to be sold?
- Something odd in US manufacturing…
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Egypt tells us a thing or two about Obama
Barack Obama’s handling of the Egyptian revolution has not been widely praised, writes the FT’s US columnist.
Snap news
Breaking pre-market news on Monday,
- AOL to buy The Huffington Post for $315m — statement.
- Julius Baer to buy back shares; annual profits rise — statement.
- Takeover target 888 Holdings says annual results will be in line with City forecasts — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Group of big managers lose pension mandates
A number of large asset managers lost pension fund mandates last year after being engulfed in reputational issues or suffering poor performance,
Further further reading
For the commute home, have a great weekend:
Part I: Making sense of the odd payrolls report
- Lies, damn lies and (job) statistics
- Free Exchange has one, two, three goes at it
- The Atlantic makes do with two
- Rosenberg is stumped
- So too is the FT
- Fed forecast fail
- The report is so confusing it needs FAQs
Part II:
A guide to Super Bowl speculation
FT Alphaville’s British contingent was already giddy in anticipation of Sunday’s Black Eyed Peas concert — and now we learn there’s also a game of “football” scheduled.
The Super Bowl, as the FT’s Gary Silverman reminds us,
SEC joins the municipal madness
Seems everyone is interested in munis these days.
From Friday’s FT:
The Securities and Exchange Commission has opened an investigation into Rhode Island’s bond offerings, as the regulator steps up scrutiny of the $3,000bn market where states and municipalities raise money.
The hot money speaks on emerging markets
Efforts by emerging market governments and central banks to shut out hot money to protect their economies are doomed to fail – or so says the hot money.
Bart Turtelboom and Karim Abdel-Motaal, who run the emerging markets hedge fund at GLG,
A brief history of Greek debt collateralisation
Earlier, we considered whether the Republic of Greece is turning into a giant collateralised debt obligation.
This is because proposals to have the EFSF back a Greek government bond buyback appear to introduce some element of collateralisation to Greece’s debt.