March, 2011
A FTSE 100 hit job
What is going on at Invensys?
The chief executive of the FTSE 100 controls company, Ulf Henriksson, has just been unceremoniously bundled out of the boardroom on Thursday morning without any explanation.
Goldfish, memories and markets
Contrary to popular myth — goldfish have a memory capability that spans months.
But that doesn’t stop Nomura’s chart of the day, titled “markets’ goldfish memory,” from making its point. Assets have very quickly reversed their post-March 11 moves.
Tokyo: TSE takes on the ‘flyjins’
While media commentators laud the inimitable Japanese sense of orderliness, politeness and dignity in the wake of the March 11 earthquake and tsunami that devastated the northeast region, it’s also reassuring to see a senior Japanese figure lash out.
Calculating the size of a Portugal rescue
More on the topic du jour, Portugal.
Harvinder Sian at RBS has taken a stab at estimating the size of a bailout if (as many commentators now expect) the country does approach the IMF and the European Financial Stability Facility (EFSF).
Haldane sips at market-based, simplified CoCo
To understand Andrew Haldane’s latest — all you have to do is glance at these charts.
One is regulatory bank capital, the other is a market-based signal of bank solvency:
See the change? In
Charts du jour, European bond yields
There’s a fresh lifetime high for the Portuguese 10-year bond yield on Thursday — now well on its way towards 8 per cent:
Although the country is now missing a government, the concern is not so much with current yields,
Further reading
Elsewhere on Thursday,
- The ESM/EFSF’s inverted capital structure.
- The modernized Phillips machine — for predicting the world economy (with water).
- The aftershock doctrine.
- Dropping a ‘Q’.
Pink picks — UK budget special
Comment, analysis and other offerings from Thursday’s FT,
Kate Barker: Rebalancing is a distant promise
A Budget for growth? We have been here before, says Barker, a former member of the Bank of England monetary policy committee.
Snap news
Breaking pre-market news on Thursday,
- Cable & Wireless Worldwide warns of no growth in 2011/12 –statement.
- Next warns autumn/winter prices will have to rise 8-10 per cent; outlook more challenging;
Further further reading
For the commute home, and for sticking to your austerity budget (or rejecting it and telling the bond markets where they can get off; it’s up to you),
- Portugal’s parliament has rejected the prime minister’s austerity plan.
Portugal on the brink
By John McDermott and Cardiff Garcia
The eurozone finds itself in another fine mess on Wednesday evening — and it can’t say it wasn’t warned.
Reuters reports on the demise of Portugal’s government:
Inflation and debt, lurking in the UK budget small print
For all the talk of operation Odyssey Dawn, it was Wednesday’s Budget that tried to navigate between two monsters: rising inflation and slowing growth.
Guest editor Gavyn Davies made this point during FT Alphaville’s special Markets Live session this afternoon:
Costing the Japan ‘quake, the official version
Not that “official” = “accurate”, of course.
Seemingly everyone else has had a go; now the Japanese government has put forward its own estimate for the ultimate economic cost of the earthquake and tsunami.
US covered bond conundrums
Our colleague Jennifer Hughes cites the worries of fund managers over the underlying collateral that backs covered bonds in Europe, which reminds us that we’ve been meaning to write something about another recent proposal meant to jumpstart a covered bond market here in the US.
[Gavyn Davies] The world’s economic centre of gravity
Danny Quah at the London School of Economics has recently released a complex but interesting article on the world’s economic centre of gravity.
What’s that?
The author defines it as the spot within the globe which represents the “average location”
Salmon market shrugs off Japan radiation fears
To say fish is important to the Japanese is an understatement. The country boasts one of the largest fish markets in the world and maintains a fishing fleet which accounts for nearly 15 per cent of the global catch.
Why Europe’s bailouts are turning to callable capital
Before reading on — we highly recommend you read this guest post over on Self-Evident on the very subject of the risks facing Europe’s bailout funds. It’s excellent and well worth your time.
OK, done?
You know – there’s something else about the ESM term sheet even after the CDS and seniority issues.
Budget 2011 – fine print follow-up
Before we begin, Gavyn Davies’ post on the 2011 Budget is up here and offers a great take.
Meanwhile, the main budget doc can be read here (pdf) and the supplemental documents here.
Below is a quick run through of the main tables as per our Budget primer on Wednesday morning.
Osborne’s windfall tax on North Sea oil profits
From a stock market perspective one big loser from Wednesday’s budget are North Sea oil producers.
They have been hit with a £2bn windfall tax, that will be used to pay for the removal of progressive fuel tax increases.
Markets Live transcript 23 Mar 2011
Markets Live chat transcript for the chat ending at 16:35 on 23 Mar 2011. Participants in this chat were: Neil Hume, FT Tracy Alloway Joseph Cotterill, FT NHhello again rabble NHand welcome to another Markets Live
The covered bond premium is over, Goldman says
Remember this?
Late last year FT Alphaville noted some weirdness going on between senior unsecured bonds — which lack specific collateral — and covered bonds which come with their own ring-fenced assets.
[Gavyn Davies] Markets Live — UK Budget special
Join us at 1530 UK time for a special edition of Markets Live to discuss the market impact of Britain’s 2011 Budget, just unveiled by Chancellor George Osborne on Wednesday.
Once again taking the controls will be today’s FT Alphaville guest editor,
[Gavyn Davies] What Osborne did today
So what did the Chancellor actually do today to change macro-economic strategy in the UK Budget?
In one important sense, he seems to have done little or nothing. The path for the structural budget deficit has been left almost exactly the same as it was after the 2010 Budget.
[Gavyn Davies] Weekly indicators for the US economy
And, following my earlier post on global growth, here is one on US growth.
Vasileios Gkionakis, my colleague at Fulcrum, has been producing weekly estimates for US GDP growth for several years now, and they have given consistently good signals about the past and future course of the economy.
ETFs are proving not so tradeable during crises
FT Alphaville has been keeping tabs on the odd goings-on in Japan-related ETFs recently. And we’ve got another issue to add to our bundle of concerns…
… It’s just how difficult trading in some ETFs has proven to be during the crisis.
[Gavyn Davies] The good, the bad and the ugly
At Fulcrum, we scan the behaviour of asset markets each week to make sure that we are not missing what the markets are trying to tell us. It is surprising how often this forces us to focus on a pattern of developments which we might otherwise overlook.
Tokyo, the water effect – another day, another scare
Another day, another jolt and more contamination fears which led to what you could call a “water effect” on Japan’s stock markets, after the Tokyo metropolitan government fanned resident’s fears by warning that the city’s tap water may be unsafe for infants …
Markets Live transcript 23 Mar 2011
Markets Live chat transcript for the chat ending at 12:29 on 23 Mar 2011. Participants in this chat were: bryce.elder Neil Hume, FT Tracy Alloway
BEGood morning
BEAnd welcome to Markets Live Budget Day Special
Tasting the difference at Sainsbury
Ouch!
The price action in J Sainbury on Wednesday morning, after the UK’s third biggest supermarket group filed a disappointing fourth quarter trading update.
And not just disappointing for Sainsbury and its shareholders,