March, 2011
Clear and present danger
This is barking — but rather readable if you’re the sort of person who enjoyed Oliver Stone’s JFK.
It’s a report commissioned by the Department of Defense Irregular Warfare Support Program which claims the US is facing an ‘Economic Pearl Harbor’ and the attack has entered its third and most critical phase.
This is not normal ECB tightening
In which ‘strong vigilance’ = ‘token gesture’.
Three charts on the European Central Bank and the euro periphery, from Credit Suisse’s global equities team on Monday:
In the midst of a permanent oil-equity correlation breakdown?
Harry Tchilinguirian at BNP Paribas observes the curious breakdown in correlation between oil and equities of late:
As can be seen, the last time there was as sharp a breakdown in the correlation was in the fourth quarter of 2008 — after which a period of extended correlation was observed.
Markets Live transcript 7 Mar 2011
Markets Live chat transcript for the chat ending at 12:38 on 7 Mar 2011. Participants in this chat were: bryce.elder Neil Hume, FT BEGood morning. BEAnd welcome to Markets Live
LVMH: One brand’s pariah is another one’s shiny knight
As Luxist blog remarked on Monday: “We’ve been so busy watching the drama as luxury mega-conglomerate LVMH Moët Hennessy Louis Vuitton makes moves on French luxury brand Hermès that we didn’t even see them sneaking up on Bulgari”.
The big four ‘known unknowns’ for oil
Citi analysts raised their Brent oil estimate to $105 and $100 for 2011 and 2012 respectively, from $90/barrel, on Monday.
That’s as Brent crude sits tight around the $115 per barrel mark, with WTI not far behind at $105 per barrel.
Shoot the messenger [updated]
How’s this for an ad hominem:
RTRS-GREECE SAYS MOODY’S DOWNGRADE COMPLETELY UNJUSTIFIED -FIN MINISTRY
RTRS-GREECE SAYS TIMING, SIZE OF DOWNGRADE ARE INCOMPREHENSIBLE, RAISES QUESTIONS
RTRS-GREECE SAYS MOODY’S DOWNGRADE SHOWS NEED FOR TIGHTER REGULATION OF RATING AGENCIES
Incidentally,
Forth Ports opens its books
Better late than never.
Forth Ports has finally got around to confirming Friday’s takeover rumours.
From RNS:
Forth Ports announces that, following an approach from Arcus’ European Infrastructure Fund 1 L.P.
Moodys downgrades Greece to B1 from Ba1 [Updated]
Moody’s has downgraded Greece to B1 from Ba1 on Monday, a move which follows Greek five-year credit default swaps hitting 1049 basis points last Friday.
Here’s the statement:
London, 07 March 2011 — Moody’s Investors Service has today downgraded Greece’s government bond ratings to B1 from Ba1,
Further reading
Elsewhere on Monday,
- A falling demand for brains?
- Europe’s very special relationship with the Middle East.
- From “Plan B” to “Plan V” for the UK.
- “So…why not a massive extension of National Savings?”
Pink picks
Commment, analysis and other picks from Monday’s FT,
Wolfgang Münchau: Trichet’s real motives
If you take your inflation target seriously and literally, as the European Central Bank does, the decision to pre-announce an almost-certain rate increase is internally consistent,
Snap news
Breaking pre-market news on Monday,
- Arcus European Infrastructure makes indicative £16.30p a share cash offer for Forth Ports; due diligence commences – statement.
- LVMH buys Bulgari for €3.7bn in shares — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Shareholder rights ‘hurt listed property companies’
New York-based Cohen & Steers is calling on shareholders to voluntarily surrender pre-emptive rights that
Further further reading
For the commute home, or while rocking out to Paradise City, or while shielding yourself from the November Rain, or while chasing your Rocket Queen, or while exercising Patience; and because you Don’t Cry,
Death bonds’ unique risks
Victoria’s the Age newspaper on Wednesday published an interesting investigation into a bad life settlements investment by the Australian state’s quasi-SWF.
It alleges that it uncovered:
details of a new $500 million loss that was only entered in the corporation’s accounts at the end of last year and the mistakes that led to that loss – the lack of due diligence,
Interesting, odd and odious sovereign debt ideas
Idea No. 1, from ECB board member Lorenzo Bini Smaghi:
More generally, this crisis has shown the vulnerability of public finances to volatile structures in the economy. In good times, volatile sources of income,
Nicholas Levene: Has-Beano?
From the wire of the Serious Fraud Office, London on Friday:
Nicholas Levene has today been charged with offences of fraud, forgery, money laundering and false accounting,. Mr Nicholas David Levene (DOB 23.
[Rolling updates]: Nonfarm payrolls up 192,000
We’ll continue to have updates as we make our way through the report, so keep checking back:
1) At a glance, a decent report, very close to expectations, and after upward revisions to December and January (each by close 30,000),
Algo trading and the Nymex
On Thursday, Reuters reported a very interesting new statistic.
The proportion of trade driven by computers on the New York Mercantile Exchange (owned by the CME Group).
According to the CEO of the CME,
Navigating the Gaddafi asset freeze
Underlining the complexity of managing the Gaddafi financial asset freeze on Friday, HM Treasury has carved out an exception for any traders dealing with ‘non-Libyan financial institutions’:
(H/T Natsuko Waki of Reuters)
Effectively it’s a licence to continue trading with British-Arab Commercial Bank,
Markets Live transcript 4 Mar 2011
Markets Live chat transcript for the chat ending at 12:26 on 4 Mar 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola markets Rabble NHwelcome to ML
The global economy is critically ill
It’s a SocGen double header on FT Alphaville this Friday morning.
You’ve had the apprentice (Dylan Grice) and now it’s time for the Dark Sith Lord (Albert Edwards).
The global economy is critically ill.
Mean-reverting US government bonds
Here’s an arresting chart from SocGen strategist Dylan Grice.
It shows gross interest payments as a share of US government revenues under two scenarios.
The black line is the most interest and shows what would happen if the US government had to pay a 5.8 per cent yield for its debt – the average of the last 200 years.
US payrolls preview
The consensus is pegging 180,000 as the magic number, with the unemployment rate ticking up slightly to 9.1 per cent. Via Bloomberg:
No fewer than five economic releases this week — ADP employment,
On the back of a (plain) fag packet
Attention, traders, brokers, entrepreneurs and financiers — there could soon be plenty more space to scribble things on the back of a fag packet.
Speculation is mounting that the coalition could announce – as soon as next week – plans for generic (or plain) packing for cigarette packs.
ECB, after ‘vigilance’
Much musing — and some shell-shock in financial markets — on Friday over the ECB’s bold new direction, or as its Thursday statement asserts, its “strong vigilance”.
As FT Alphaville noted, the surprise suggestion on Thursday by ECB chief Jean-Claude Trichet of an April rate rise “went down a treat in the foreign exchange markets”,
Further reading
Elsewhere on Friday,
- The barbarians are back.
- The world’s most admired companies.
- Half a century of large currency appreciations.
- Another contender for the ECB’s top job?
- Sticky prices versus flexible prices.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gavyn Davies: The ECB says “don’t tread on me!”
Only a major discontinuity in Europe’s financial markets can now prevent the European Central Bank increasing interest rates to 1.25 from 1 per cent next month,