February, 2011
Illinois pension bond sale – not a disaster
From the WSJ on Wednesday afternoon, provisional details of Illinois’ delayed $3.7bn pension bond sale:
Initial indications on the deal Tuesday showed $6.1 billion in orders, with around a fifth of those coming from international investors,
Ireland LLC
Here’s an unexpected press release from the Irish Funds Industry Association:
Irish Funds Industry Continues Expansion
TOTAL assets under administration in Ireland have reached a record high and are fast approaching the €2 trillion mark.
Barbarians, back at the gate
KKR announced Wednesday that Q4 2011 net income rose 39 per cent to $714.6m from $515.3 m in Q4 2010. This nudged us into thinking back to 2007:
In a note out on Tuesday, Citi analysts reckon we’re due for a rerun of the heady LBO days.
Why you really can’t swap Libyan oil for Saudi
Apart from the prospect of $220 a barrel…
Much discussion on Wednesday of whether Opec could pump more oil from the Arabian peninsula to make up for Libya going offline — so we thought these pointers from Barclays Capital’s Amrita Sen might help:
Nomura’s $220-a-barrel crisis oil call
Talk about an oil shock.
Nomura’s commodity analysts, led by Michael Lo, are calling for oil at $220 a barrel, if both Libya and Algeria were to stop oil production. Oil’s currently around $108.
Here’s the summary:
Citi sees free lunch in Greek basis (almost)
That would be free μεσημεριανό in Greek.
And it’s not our translation — Citigroup credit strategist Hans Lorenzen actually uses the word in his latest note. In it, Lorenzen recommends investors jump on the negative basis which currently exists between Greek bonds and CDS on those bonds.
Diplomacy by US Treasuries
Here’s a year-old quote from the Inner Workings blog of the Asia Times:
Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE),
Russia, the oil opportunist
From Nomura’s Jim McCormick, net exports of oil as a percentage of GDP for a range of emerging markets. No wonder Russia plans to sell that Eurobond on Thursday.
Markets Live transcript 23 Feb 2011
Markets Live chat transcript for the chat ending at 12:22 on 23 Feb 2011. Participants in this chat were: bryce.elder Joseph Cotterill BEGood morning BEAnd welcome to another Markets Live
Boosting Saudi supply
Supply of government cash to hose down dissent, that is.
While many argue that Saudi Arabia and its oil reserves remain in little danger of being rocked by unrest, King Abdullah perhaps disagrees.
Via Al Arabiya,
Markets Live: Special edition
Save the date.
On Monday, February 28, Robin Freestone, the chief financial officer of our parent company Pearson, will be appearing on Markets Live.
He’s agreed to take your questions on Pearson’s annual results (which will have been published earlier in the day) and the education/media industry.
The third dissenter
The much-awaited February Bank of England minutes are out — and lo and behold — it looks like Monetary Policy Committee member Andrew Sentance was right.
They were more interesting than usual.
Meet the new club of dissenters in the Bank’s most recent rate decision (a hold):
Ants, grasshoppers and Spanish banks
Here’s one to add to the Spanish banks about to lose their loan buffers theme.
Joseph Dickerson, bank analyst at Espirito Santo and last seen on FT Alphaville quoting Woody Allen and slapping a big buy on Lloyds,
Monetary policy in a time of natural disaster
Here’s a counter-intuitive policy suggestion, if ever there was one.
On Tuesday, after a 6.3 magnitude earthquake hit the New Zealand city of Christchurch, the swap market doubled-down on bets the country’s central bank would cut interest rates.
Miner jelly beans
Our eyes are bleeding:
(From a Nomura note on miner capex and project growth)
Further reading
Elsewhere on Wednesday,
- Spot the villain in currencies’ grubby secret.
- Japan’s Phillips Curve looks like… Japan!
- Oil price shock: Pandora’s Box is opened.
- When unsecured creditors are unequal.
Pink picks
Comment, analysis and offerings from Wednesday’s FT,
Martin Wolf: Ireland needs help with its debt
“If I were you, I wouldn’t start from here.” Never can the punchline from the well-known Irish joke have been more apposite,
Snap news
Breaking pre-market news on Wednesday,
- Commerzbank returns to profit; posts net income of €1.4bn in 2010 – statement.
- Rio Tinto receives $340m Imersys offer for talc assets — statement.
- AP Moller-Maersk says 2011 weak for tanker business — statement.
Further further reading
For the commute home or while relaxing about your kid’s future,
- Monitor the latest in Libya.
- Historical housing starts from peak to trough.
- The Wisconsin fire-sale.
- Really? The market reforms the CRAs.
Gaddafi’s market – US edition
Spotted: Vix, the ‘fear gauge’, up nearly 28 per cent on Tuesday.
A 2011 Egyptian revolution-encompassing high. (Though still way below 2010 eurozone-crisis levels.) According to VelocityShares,
Citi’s new meme: 3G or ‘Global Growth Generators’
In a whopping report out Monday, Citi’s Willem Buiter and Ebrahim Rahbari call time on ‘Emerging Markets’ and ‘BRIC’ labels.
And not a moment too soon, we reckon.
Instead, the authors propose — you guessed it — a new meme:
US housing double-dip, continued, again
Ouch, nearly everywhere.
The Case-Shiller house price numbers are out for December — and as always, they show a three monthly average (in this case for October, November and December) with a two month lag.
Life in the Gaddafi oil market
Breaking at pixel time — Reuters quoting an Italian government source that ‘informal’ Opec talks have begun on raising output if Libyan supply collapses (only for the Saudi oil minister to deny that Opec will consider extraordinary talks.)
Which is precisely what the supply has been doing (the country’s gas exports aren’t looking too hot either).
Ireland’s (stylised) sovereign-bank loop
How to separate the fortunes of a nation from those of its failed banks has become one of the biggest questions to come out of the recent financial crisis.
And no more so than in Ireland — which has seen its off- and on-balance sheet liabilities rise with almost every added layer of bank bailouts and financial guarantees.
Doubting the data, US home sales edition
Here’s something the US market may have missed on Monday.
It’s the battle of the housing data providers — with CoreLogic challenging the National Association of Realtors on their recent home sales figures.
Credit Suisse on alert for credit cycle turn
2011 has so far been kind for credit markets. Could that be about to change?
William Porter, head of European credit at Credit Suisse (and of ‘eurozone as a giant CDO’ fame) muses on the subject in the bank’s latest European credit flash.
Markets Live transcript 22 Feb 2011
Markets Live chat transcript for the chat ending at 12:14 on 22 Feb 2011. Participants in this chat were: bryce.elder Tony Tassell BEGood morning BEAnd welcome to another Markets Live
The new, increasingly mysterious, BP
Here’s a big table for institutional investors to pore over on Tuesday:
It’s Citigroup’s list of the asset sales and acquisitions made by BP since the start of 2010 — so it includes stuff unloaded when the company had to raise cash to pay its legal bills after the Gulf oil spill.