February, 2011
The Bank of England makes a supranational transition
Here’s one that slipped by us on Friday.
The Bank of England quietly changed some of its collateral requirements for UK banks. It wasn’t anything huge — all the assets that are currently eligible for things like the BoE’s open market operations and discount window will remain so — but there are a few changes to the haircuts required by the central bank.
Credit Suisse’s $6.2bn Swiss finish
Credit Suisse says it just gave the latent CoCo market a $6.2bn shot in the arm.
On Monday morning the Swiss bank announced it would issue Chf 6bn ($6.2bn) of Contingent Convertible securities — or debt that will convert into equity once a certain trigger is reached.
Further reading
Elsewhere on Monday and at the weekend,
- 100 most respected companies.
- ‘Triumph of the City’, a review.
- Cross-border banking: why nationality matters.
- Wall Street’s dead end.
- Cheap oil is gone for good.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: Draghi can lead the eurozone out of danger
It is generally good practice for columnists not to endorse candidates for high office.
FTfm on AV
Some highlights from Monday’s FTfm.
Developed world returns set to weaken
Future returns from developed world equities and bonds will not match those of the past 110 years, two heavyweight reports say,
An exchange for the bigger, not the better
Reuters is reporting that the board of NYSE Euronext will hold a meeting on Sunday to discuss the potential merger with Deutsche Börse AG.
Details of what the NYSE Euronext board might discuss or what it might vote on were unclear.
SEC charges IndyMac execs with securities fraud
Is Chuck Schumer a happy man tonight?
The SEC on Friday charged three former IndyMac executives with securities fraud. The regulator accuses former CEO Michael Perry and former CFOs Scott Keys and Blair Abernathy with deliberately misleading investors about the mortgage lender’s worsening capital and liquidity conditions in the run-up to its collapse in July 2008.
Further further reading
For the commute home or while watching Al Jazeera
- First CDS traded and cleared under Dodd-Frank rules
- Cupid = Keynes?
- Pettis on Chinese stock markets and European politics
- iPad slap-down;
The end of the home ownership “dream”
Government reports don’t normally make for interesting eulogies, but this one is an exception.
The Treasury-HUD report to Congress on the future of the US housing market is out and generating qualified praise (though little surprise).
Philly Fed forecaster survey catches up to reality
Yes, we know, we know — forecasts are nonsense. It’s practically our motto around here.
But we post the Philly Fed’s quarterly survey of professional forecasters to keep track of shifts in sentiment among private-sector economists,
Dear Level Global investor…
‘While others zigged, we zagged’. The Feds — steamrollered.
Click for the full letter from Level Global to its investors, notifying them that it will be winding down due to ‘the ongoing Government investigation’:
Goodbye for good, Mr Mubarak
In the name of God the merciful, the compassionate, citizens, during these very difficult circumstances Egypt is going through, President Hosni Mubarak has decided to step down from the office of president of the republic and has charged the high council of the armed forces to administer the affairs of the country.
Running for covereds
A chart to end a week full of talk of haircuts for senior bank bondholders. The below is from Citi’s Hans Lorenzen — showing senior unsecured financial issuance suffering:
And a hat tip to Hans for the title too.
World’s best bank (2006 vintage)
It has long been known that consulting firm Oliver Wyman crowned Anglo Irish the world’s best bank in 2006 — just when Anglo was actually… well, you know the story.
Sadly, the report that bestowed this fateful distinction has (quite unaccountably!) vanished from the Oliver Wyman corporate site.
FCIC audio and a forgetful Fuld
The Federal Crisis Inquiry Commission has released the audio interviews to go along with its 662-page potboiler. We’re talking hours and hours of stuff to listen to here.
And there are some big names — Goldman’s Lloyd Blankfein,
Has the Fed’s exit strategy been Basel-ed?
A piece of the Fed’s exit strategy in tatters because of Basel III? Perish the thought.
Yet RBC Capital Market’s Mike Cloherty certainly seems to think so in a short note published late on Thursday.
Markets Live transcript 11 Feb 2011
Markets Live chat transcript for the chat ending at 12:22 on 11 Feb 2011. Participants in this chat were: bryce.elder Joseph Cotterill BEGood morning everyone. BEAnd welcome to another Markets Live
US default risk is 0.05 per cent, Moody’s says
Once upon a time, credit default swaps on US sovereign debt hovered around 2 basis points. They’ve since gone up to a record 100bps and are now at about 40bps:
So the credit market’s pricing in higher default risk,
Man strolls back into burning platform
Actually — less ‘man jumps off burning platform’, more two elephants romping on an ominously squelching water bed.
Or as Nokia put it on Friday:
- Plans for a broad strategic partnership with Microsoft to build a new global mobile ecosystem;
Central bankers, mad as hell…
What happened to the discreet, decorously shadowy world of the central banker?
The publicity and consternation generated by this week’s news of the exits of Axel Weber from the Bundesbank and the Federal Reserve’s Kevin Warsh are rare public indicators of internal dissent and cental banker-discontent.
Project Merlin’s (unprofitable) magic wand
The UK coalition government waves its magic (Project Merlin) wand over the nations’ banks — and presto — less bonus-y, more responsible, £190bn-lendier banks.
It’s worth remembering, though, why banks have tended to veer away from lending to small- and medium-sized businesses in recent years.
Webvan Celeste
Related link:
John Lewis pensions trust sells remaining stake – RNS
Further reading
Elsewhere on Friday,
- “Portugal appears to be on the chopping block and we all know it.”
- Lists and ranking economic data.
- And the world’s most influential economists.
- Has financial development made the world riskier?
- Lehman’s indefensible mortgage modifications.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: All aboard for a two-speed Europe
Europe is on the move, writes the FT columnist. After years rusting in the sidings, the Franco-German locomotive has chugged back into view.
Snap news
Breaking pre-market news on Friday,
- Nokia announces new leadership, new financial targets and new strategic partnership with Microsoft — statement and statement.
- John Lewis pension fund sells remaining stake in Ocado — statement.
Treasury targets LCB, Hizbollah and used car salesmen [corrected]
Correction: The fifth paragraph originally included a reference to the Daedong Credit Bank, rather than Banco Delta Asia. This was a mistake — as the links to the Treasury site and New York Times article show,
Further further reading
For the commute home,
- Mubarak speech on Al Jazeera English right now.
- A list of finance and investing podcasts.
- On core vs headline inflation: James Hamilton and David Leonhardt.
- Kevin Warsh will resign from the Fed Board of Governors.
Monthly foreclosures start climbing again
Maybe we were too early in trying to assess the potential economic impact of the foreclosure slowdown, as the trend has come to a halt:
RealtyTrac®, the leading online marketplace for foreclosure properties,