May, 2011
Further further reading
For the commute home,
- A review of Too Big to Fail, the movie.
- A mystery bank is buying shares of Facebook.
- CFR on what Egypt should do about its economy.
- Taxes in the US: too high or too low?
- How innocuous is a Treasury default?
- LPs want more transparency from their private equity fund managers.
Wealth no longer wilting, just tilting
Below are a few slides, charts and graphs that piqued our interest from the Boston Consulting Group’s latest annual wealth report — see the press release if you just want the main points.
1) Rich people:
Platform burns man
Shares in Nokia down 18 per cent at pixel time, after scrapping all guidance and warning on profits again.
Related link:
‘Nokia, our platform is burning’ – FT Alphaville
Why Irish burden-sharing is talking out its backside
First, it was Allied Irish Banks, and a capital structure which had egregiously flipped to favour equity over credit.
Now, as of Tuesday, it’s spread to Bank of Ireland:
The Bank intends shortly to launch a liability management exercise in respect of approximately €2.6 billion of its subordinated liabilities.
Haunted housing
The US housing double-dip — it’s official:
Data through March 2011, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices,
‘Real’ US Treasury yields go back to zero
The effects of stubborn inflation and persistently low bond yields charted for the benchmark 10-year US Treasury, by Reuters’ financial graphics-guru Scotty Barber:
There’s an even longer chart — plus an explanation — over here.
Markets Live transcript 31 May 2011
Markets Live chat transcript for the chat ending at 11:27 on 31 May 2011. Participants in this chat were: Neil Hume, FT Joseph Cotterill, FT NHHola Rabble NHgood morning
Cyprus, from haven to contagion
Cyprus is one of the weirder cases of this disease Europe has called ‘Greek exposure’. Tiny sovereign debt, big bank gearing to Greece. All wrapped up in a web of offshore deposits.
Fitch cut the sovereign rating of Cyprus to A- from AA- on Tuesday (in line with S&P and Moody’s,
Leighton sets a quick early Pace [updated]
The troubled TV set-top box maker has a new chairman.
It’s Allan Leighton, the former boss of Asda and non-executive chairman of the Post Office.
As we know, Leighton has an impressive track record as a manager — as well many other non executive commitments (Loblaw,
Greek bailout — Part II
Risk on!
Markets across Europe were moving higher on Tuesday morning….
… following reports that Germany that claim Germany is softening its stance on fresh financial aid for Greece. In other words,
Goldman Sachs makes an expensive typo
The following is the formula for a properly structured warrant tied to Japan’s Nikkei index — which would (we presume) be easy enough to hedge for its issuer:
(Closing Level – Strike Level) x Index Currency Amount / Exchange Rate.
A pause in Spanish bank piggybacking?
It’s gone all quiet in the other letters that make up a certain eurozone peripheral acronym…
Spain and Italy have both been contenders for the next eurozone hotspot, of varying degrees. And while Spanish and Italian banks have both been rushing to raise capital or prefund in recent months,
Further reading
Elsewhere on Tuesday,
- Happy birthday, Dow.
- 20 questions to ask anyone who thinks the crisis is over.
- The mathematics generation gap.
- The bubble in bubbles, reflexive version.
- Bubble-debt Denialism.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Peter Spiegel: European integration is unravelling
Once a decade, a crisis divides the European Union and stalls the post-war effort to bring the continent closer together,
Snap news
Breaking pre-market news on Tuesday,
- Volkswagen set to formalise approach for MAN — report.
- Serco announces £385m acquisition of Indian business process outsourcing company — statement.
- Novae studying merits of merger with Omega — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Warning on high yield ETFs
ETFs investing in high yield bonds may significantly underperform their indices if current inflows turn to big outflows
Cat-bond take-up
Further further weekend
For the commute home, have a great long weekend,
- LinkedIn puts are trading at a big premium to calls.
- Painting money, back in the day.
- The economic value of the internet.
- Pimco vs the WSJ.
The Weekender
This week on FT Alphaville,
- Grimsvoetn erupted.
- The ruling Socialist party of Spanish prime minister José Luis Rodríguez Zapatero took a beating in last weekend’s elections, as la austeridad has proved unpopular.
How dare you, I’m a sovereign
Don’t mess with a non-US sovereign. They still have the power, even if they have deficits.
Risk reported reported in April that US regulators were proposing to make collateral-posting for sovereigns compulsory.
US Markets Live transcript 27 May 2011
Markets Live chat transcript for the chat ending at 15:01 on 27 May 2011. Participants in this chat were: Paul Murphy Cardiff Garcia Joseph Cotterill, FT Stacy-Marie Ishmael, FT Izabella Kaminska
It’s not just Greece that was an economy with the truth
You might normally expect a European Central Bank working paper with the title ‘Fiscal Data Revisions in Europe’ to be dry as dust.
Not with these conclusions:
Recently, some voices have been wondering whether revisions to Greek data revisions are representative of the Europe’s fiscal reporting system or,
Reminder: US Markets Live starts in one hour
Before you disappear for the long weekend…
FT Alphaville is on skeleton crew this week, so everyone on the team who hasn’t already disappeared will be there. As always, the fun begins at 10am New York time,
Markets Live transcript 27 May 2011
Markets Live chat transcript for the chat ending at 11:31 on 27 May 2011. Participants in this chat were: bryce.elder Joseph Cotterill, FT Izabella Kaminska BEWell, then. BEGood morning everyone.
Oh dear oh Dexia [updated]
Update (1215 UK time): It was an accelerated asset sale, as Les Echos reported below, but quite a nasty one — into fire sale territory — with €3.5bn losses being booked this quarter.
From Dexia’s statement:
Basel and a widowed Lloyds balance sheet
Funny coincidences, Lloyds Banking Group edition.
Last night Bloomberg reported that Lloyds has ruled out a sale of its insurance arm Scottish Widows. A sale had been seen bullish for the bank, by disciplining its vast post-crisis balance sheet a bit more and allowing return on equity to drift into the high teens.
Should the US adopt the euro?
Here’s some innovative thinking courtesy of Bill Bonner at the Daily Reckoning blog.
He wonders if the US might be looking at its problems the wrong way round.
Rather than worrying about the fate of the dollar,
Further reading
Elsewhere on Friday,
- The Fed’s $80bn subsidy facility.
- Bob Woodward Vs Tim Geithner.
- The US should switch to the euro!
- The boulevard of broken charts.
- Do banks learn from crises?
- Comparing like with like.