February, 2011
Further further reading
For the commute home,
- China to create the world’s largest city.
- The SEC has proposed new rules for what defines Swap Execution Facilities.
- “Our directive was ‘to help companies decrease and manage their risks.’ Often we did just that.
Household deleveraging and consumer-led growth
The onslaught of chart porn begins with the changes in the US personal savings rate for the last five years, updated to reflect Monday’s income and outlays report from the BEA:
The decline in the December savings rate,
‘The Middle East convergence trade’
Pricing political risk in a crisis is hard. Exhibit E: the “orderly transition”.
1. Hosni Mubarak says he will not run for re-election. Reuters flash at 9am GMT (H/T FT Tilt):
Egypt debt insurance costs fall sharply-Markit
2.
US bank earnings: a wrap
Just passing along a few highlights from KBW’s latest analysis of Q4 earnings for the 131 banks they cover (emphasis theirs):
Banks continue to beat or meet expectations. For our sample of 131 banks, on an operating-per-share basis,
IFS: beware the UK labour market
If policy wonks had their way, the publication date of the IFS Green Budget would be a national holiday.
We exaggerate — slightly — but for an arid testament to the prose potential of Excel spreadsheets,
Markets Live transcript 2 Feb 2011
Markets Live chat transcript for the chat ending at 12:04 on 2 Feb 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHMorning rabble NHWelcome to ML NHa short edition today
When Irish eyes are crying
Coming soon — Michael Lewis, of Liar’s Poker fame, does Ireland in the March edition of Vanity Fair. Click on the link for a Q&A preview:
Quantifying corruption risk in India
Egypt’s grabbed all the headlines in the ‘emerging market risk’ category so far this month, but there’s been a touch of controversy elsewhere in the EM category too.
India’s been rocked by a series of corporate and political scandals.
M&A matchmaking
There’s been an outbreak of fantasy M&A this Wednesday morning.
Credit Suisse reckons Anheuser-Busch InBev should respond to the continuing ills of the US domestic beer market by making a blockbuster bid for SABMiller:
The impact of inflation is ‘greatly exaggerated,’ MS says
In the current environment of growing “inflation anxiety”, particularly in Asia, Morgan Stanley strategist Gerald Minack looks at the extent to which inflation affects equity values.
And in his view,
More and more macroprudential
In case you were unsure — macro-prudential is the new policy buzzword.
From a just-published working paper on the topic, by the BIS:
The term first appeared in the late 1970s, in a meeting of the Cooke Committee,
Dear Nokia and Microsoft CEOs
Required reading ahead of next week’s make-or-break strategy day at Nokia:
Further reading
Elsewhere on Wednesday,
- Michael Lewis does Ireland.
- When and how gold will begin its bubble.
- You can blame private equity for junk debt.
- The Great Afghan Bank Heist.
- Wikileaks vs Wall St in a battle for our souls.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Nouriel Roubini: Stagflationary risks from the Arab street
The upheaval in Tunisia and now Egypt has important economic and financial implications,
Snap news
Breaking pre-market news on Wednesday,
- BBVA announces 9 per cent rise in full year profits, says bad debts stable — statement.
- Roche forecasts low single digit sales growth in 2011 — statement.
Further further reading
For the commute home or for enjoying with a cool glass of Sakara beer
- The melting pot qualities of cities
- Looking ahead to a new Egyptian economy
- Hamp fail; direct negotiations win
- States are in better fiscal shape
- More on what to do about Fannie and Freddie
- Don’t panic about $100 oil
- The most influential economists
- Roubini:
The Terra Firma response — IN FULL
After three years and a £1.75bn loss, is that it?
Terra Firma is pleased that EMI’s debt burden has been reduced through Citi agreeing to write down a substantial proportion of EMI’s debt.
Hmm.
Chart du jour, US tax cuts edition
A bit of eurozone-US fiscal divergence, anyone?
In a post on Tuesday the IMF blog compares its current projections for fiscal consolidation in advanced economies with those it made in November 2010.
Meredith Whitney and the muni fifth dimension
Bloomberg has tracked down Meredith Whitney, bought her scrambled eggs, and demanded an explanation.
In an article out on Tuesday, Whitney is asked about her prediction that “You could see 50 sizable defaults,
Guy Fawked [updated]
Hands-free at last, etc. Terra Firma — boss: one Guy Hands — just lost control of EMI to a Citigroup manoeuvre. Click for full statement (PDF):
(H/T to Bryce Elder for headline)
Update (7:05pm GMT) — Terra Firma issued this slightly pithier statement on Tuesday afternoon:
A week is a long time… for the UK economy
The 10-year gilt yield hit an eight-month high on Tuesday…
As has the five year…
And the two year…
Meanwhile the pound has moved higher against the dollar.
The main catalyst for those moves had been a very strong UK PMI manufacturing report for January.
Value for money, with the FSA
The Financial Services Authority (FSA) has today announced its proposed Annual Funding Requirement (AFR) for 2011/12. The AFR for 2011/12 is £500.5m, up from £454.7m in 2010/11, a gross increase of 10.1% in overall funding.
John Kemp: There is no global output gap
It’s no secret we at FT Alphaville ♥ John Kemp.
And we output gaps. Or at least, certain policymakers’ over-reliance on them.
So it’s with some joy that we read the latest from the Reuters columnist,
Another reason to flee north
It’s probably safe to say the Norwegian krone has already been pretty well tipped in 2011, given a certain well-known correlation:
But there’s more to Norway than just oil.
Via Simon Derrick of BNY Mellon:
Goldman’s Tourre says show me the inexperience!
Fabulous Fabs is back, and this time he has a subpoena.
The Goldman Sachs trader is still fighting SEC litigation alleging he failed to tell investors in the Abacus CDO that hedge fund Paulson &
Six scenarios in search of a eurozone solution
Chart via Andrew Garthwaite’s global equities team at Credit Suisse:
Click to enlarge. Here’s a sentence that’s brimful of confidence:
Peripheral Europe has to undergo more deflation than we think clients realise…
Markets Live transcript 1 Feb 2011
Markets Live chat transcript for the chat ending at 12:24 on 1 Feb 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola NHIt’s 11.03am NHand time for ML
Will nothing deter Mrs Watanabe?
Mrs Watanabe — Japan’s famous retail currencies investor — laughs in the face of emerging market political instability. In fact, she laughs then invests some more.
From Yunosuke Ikeda at Nomura’s global FX team: