February, 2011
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Ian Bremmer: J-curve hits the Middle East
No one could predict that the death of a Tunisian vegetable vendor would spark revolts across the Middle East,
Snap news
Breaking pre-market news on Thursday,
- BNP Paribas reports Q4 results; takes €534m hit on value of stake in Axa — statement.
- Nestle says emerging markets demand helped offset rising raw material prices — statement.
Further further reading
For the commute home, or while you’re denying to the SEC that you comment on Alphaville,
- “Financial Crisis Cause No. 2: The moral collapse of the American working class.” Michael Lewis. Satire. Read.
Labour force follies
A striking chart from McKinsey’s new report on US productivity:
Forecasts play a big role in these comparisons, and you know how we feel about those, but it is still an intriguing look at where the US economy now finds itself.
Charts du jour, muni edition
Worried about public pensions liabilities? Well, look away now.
In a report out Wednesday, The Center for Retirement Research at Boston College tried to isloate the factors that influence (1) the spreads on municipal bond yields,
FOMC minutes from the January 25-26 meeting
Just a few items to note from the minutes of the FOMC’s meeting on January 25-26.
– The Fed staff gave a presentation on the level of structural unemployment, which the participants then debated:
Among the factors cited that could affect the level of structural unemployment were demographics,
Cutting out the muni middle man
Here’s a novel idea for municipalities: ignore the prickly muni bond market and accept help from your local Wall St bank.
From the WSJ on Wednesday:
J.P. Morgan Chase & Co. is devoting billions of dollars to direct loans this year to both refinance deals and for new projects,
Dear fellow Actelion investors…
Just why are there no friggin’ deals An excellent opportunity awaits to ask management to explain their long-term strategy for creating shareholder value, says Elliott Advisors…
Courtesy of the FT’s hedge fund correspondent and former FT Alphavillain Sam Jones,
China’s quirky little bubble-makers
They are in the middle of a rather large bubble. They are feeling the pinch of tightened bank lending.
They are Chinese property developers.
And it would generally be very nice to find out how their cashflow and credit factors work.
LSE prices oddness, the continuing story
Click to enlarge (image via a friendly source):
Here’s what the text, from the broker TD Waterhouse, says:
Due to technical changes at the London Stock Exchange (LSE) last weekend there is an issue affecting the execution of UK Stop Loss Orders.
Moody’s puts Antipodean banks on review
Fresh from Moody’s — a threat of bank downgrades Down Under (sorry).
The start of the rating agency’s statement:
Sydney, February 16, 2011 — Moody’s Investors Service has placed on review for possible downgrade the Aa1 long-term,
China’s yuan-child policy
Surely it was hard enough being a Chinese man without being held responsible for a global currency war.
This is, roughly, the usual US-China currency war logic: (1) Chinese officials intervene aggressively in the currency market,
Inflation Chartology
Yes, that’s a y-axis change in the just-released February report…
Markets Live transcript 16 Feb 2011
Markets Live chat transcript for the chat ending at 12:15 on 16 Feb 2011. Participants in this chat were: bryce.elder Joseph Cotterill BEGood morning part II. JC…Hello?
Basel III blurs
Here’s a capital curio for investors in Credit Suisse’s Monday-announced CoCos issue.
It’s probably not a surprise that a transition from the Basel II to Basel III regulatory regimes might create some scope for capital confusion.
SocGen on depleted Spanish bank loan loss buffers
For some months now, all the Spanish banking concern has been focused on funding and net margin issues. Worries about loan losses (so 2009) have ebbed away.
On Wednesday, Société Générale’s banking team says it’s time to revisit the issue.
A eurozone timeline by Fitch
Oh the newsflow! Fitch Ratings has come up with a timeline of upcoming events that will “help shape the direction” of eurozone sovereign credit quality. Here it is:
Jumping JGB rates
Never short a Japanese government bond — no matter what you think of the country’s debt-to-GDP ratios, demographics, savings and the like. The JGB market can stay irrational longer than you can stay solvent etc.
Sanofi-Genzyme: end of a saga?
Could it be? Could one of the most protracted bid sagas in recent memory have lurched to its denouement?
News came on Wednesday morning that Sanofi-Aventis has finally clinched its deal to buy Genzyme after raising its offer to $20.1bn for the US biotech business.
Further reading
Elsewhere on Wednesday,
- A Paul Krugman post [template].
- Bear Stearns, Viacom and ghosts from the past.
- (Fiscal) rules are there to be broken.
- Madoff gives his first interview from prison.
Pink picks
Comment, analysis and offerings from Wednesday’s FT,
Martin Wolf: Egypt has history on its side
I do not believe the triumph of democracy is inevitable in the world or in Egypt, writes the FT columnist.
Snap news
Breaking pre-market news on Wednesday,
- Sanofi agrees to buy Genzyme for $74 in cash per share – statement.
- Societe Generale posts full-year net income of €3.9bn – statement.
- BHP Billiton half-year Ebitda up 60 per cent to $17.3bn – statement.
Further further reading
For the commute home, and to help you score your travel budget,
- The return of structural unemployment concerns.
- Why small IPOs matter.
- Moving beyond the GSEs.
- Retail sales up, inflation edition.
Emerging resistance
Here’s a chart that might spook investors in emerging markets, at least those in equities:
It comes via RBC (HT FT Tilt), which in a new report lists a compendium of worries about EM asset classes for the first half of 2011:
Table du jour: world food price menu
In the latest Food Price Watch, the World Bank reports that its food price index climbed 15 per cent between October and January, driven largely by “increases in the price of sugar (20%), fats and oils (22%),
A gurgling sound in Chinese cashflow
Revealed alongside (massaged?) Chinese inflation data on Tuesday: sharply lower bank lending growth.
Which — given that China’s lending restrictions may well be more effective than rate hikes at halting liquidity — was quite an odd drop all round,
Regulators and hedge funds in muniland
From the Municipal Securities Rulemaking Board on Tuesday, a little bit more light for all those new investors in the metamorphosising municipal bond market:
For new issues of securities beginning February 14,
I name this premier global exchange group…
Time to think like a brand consultant and come up with a name for this:
Winner gets a bottle of nice champagne.
Usual rules apply: ie Taxloss can’t win, prize must be collected from FT HQ in London.
Raging bulls
And the overwhelming theme of the latest BofA Merrill Lynch fund managers survey is…
Complacency.
From record equity and commodity overweights…
Equities & Commodities Rule
Asset allocation is straightforward and extreme: