May, 2011
Language games, with Albert
Another missive on the US recovery from the SocGen bear-king Albert Edwards and, uh-oh, paging Ludwig Wittgenstein:
Words fail me
What’s up Albert?
Dylan’s latest weekly extolled the virtues of holding cash when expected returns on equities look as poor as they do now…
Delaying a US default 101
We are 12 days from hitting the $14,300bn US debt ceiling. And, perhaps more importantly, just a few months away from when the Treasury will run out of accounting moves that can prevent a default.
And if you’re wondering what these accounting moves are exactly,
For all the BMWs in China
From BMW’s record earnings statement on Wednesday:
“The BMW Group is well on its way towards achieving new sales volume and earnings records for the full year. We are aiming for a record sales volume of well over 1.5 million vehicles as well as new full-year sales volume records for each of our premium brands BMW,
Man in Japan
After losing a lot (some estimated up to $2bn) as a result of Japan’s March 11 earthquake and tsunami, and giving a bit ($1m) to Japan’s relief effort, Man Group is recouping some losses and is back in serious business in Japan – and wants everybody to know about it.
S&P sees eurozone, UK housing headwinds on swelling rates
Here’s a convenient continuation of the rising-European-rates-meets-real-estate theme.
Standard & Poor’s reckon “fresh headwinds are gaining force in Europe’s real estate markets” due to rising interest rates (or at least,
Markets Live transcript 4 May 2011
Markets Live chat transcript for the chat ending at 11:28 on 4 May 2011. Participants in this chat were: Neil Hume, FT bryce.elder
NHHola Rabble
NHwelcome to markets live
US earnings season, ‘extraordinary resilience’?
After a flurry of first-quarter US corporate results figures, analysts have been pronouncing the Q1 earnings-per-share season “solid”.
But, as Morgan Stanley says in a recent note, margin expectations may be too high.
Portugal’s formidable adjustment programme [updated]
A few more details on Portugal €78bn bailout package were starting to emerge on Wednesday morning.
From Reuters:
- PORTUGAL BAILOUT DEAL INCLUDES UP TO 12 BLN EUROS FOR POSSIBLE BANKING SECTOR RECAPITALISATION-SOURCE
- PORTUGUESE BANKS HAVE TO RAISE CORE TIER 1 CAPITAL RATIOS TO 9 PCT END-2011,
Here comes RenRen
UPDATE: As Reuters reported late on Tuesday, RenRen didn’t actually price until early Wednesday morning (at $14), but its American Depositary Shares started trading Wednesday on the NYSE as scheduled.
This was Renaissance Capital’s shadow US IPO backlog at the end of last year,
Bahrain bank flight, quantified
Q. What happens when your prized offshore banking system is occupied by Saudi Arabia?
A. This:
(Click to enlarge)
The tables above are from the Bahrain central bank’s financial statistics for March 2011,
Glencore IPO term sheet
Related link:
Price Range and Publication of Prospectus – Glencore
Further reading
Elsewhere on Wednesday,
- The case for a consensual Greek debt exchange…
- … and the case against.
- It’s the meat’s fault. Never Goldman’s.
- ‘Do we need regional Fed presidents at the table?’
- Amateurs shouldn’t manage their own stocks. Discuss.
Pink picks
Comment, analysis and offerings from Wednesday’s FT,
Martin Wolf: Managing eurozone fragility
Why is Spain paying higher interest rates on its government debt than the UK?, asks the FT columnist. The answer to is illuminating:
Snap news
Breaking pre-market news on Wednesday,
- Glencore sets price range for flotation; price range of between $48bn and $58bn — statement.
- Next says recent warm weather and Royal Wedding bank holiday boosted sales;
Wires: Portugal agrees to bailout loan
Bloomberg and Reuters, citing Portugal’s prime minister Jose Socrates, are reporting that the country has arrived at an agreement with the EU and IMF on a three-year, €78bn ($116bn) bailout loan.
Some details from Bloomberg,
Further further reading
For the commute home,
- Finance books released in May, and three foreign policy books recommended by Dan Drezner.
- Lloyd Blankfein might be around for a little while yet.
- GM and Ford sales were up in April.
April global M&A wrap
Just sharing a few highlights from the finaly April M&A tally, compliled by Dealogic:
Global M&A totaled $260.1bn in April 2011, a fall of 17% on March volume of $313.3bn. The number of deals totaled 2,756,
Pundit predictions and coin-toss comparisons
Hamilton College has a new report (via Romanesko via Yglesias) assessing the predictive accuracy of professional pundits during a 16-month period through December 2008.
The findings, emphasis ours, with some commentary to follow:
China versus the UK Takeover Panel
This promises to be fun.
A Chinese state-owned nuclear power company is squaring up for a fight with the Takeover Panel over Kalahari Minerals.
Here’s the backstory.
At start of March, China Guangdong Nuclear Power Corp made a 290p a share offer (£756m) for Kalarahi,
Superman, future tax deadbeat?
The Son of Jor-el has a problem.
Not Kryptonite or Lex Luthor or those fashion-challenged creepshows from Superman II.
No, his beef is with — or rather, will be with — the IRS.
You probably heard that last week,
The skeletons (or mortgage audits) in Deutsche Bank’s closet [updated]
One word to describe the narrative in the just-announced civil suit against Deutsche Bank’s mortgage unit: quaint. Though parts of it are still shocking.
The suit centres on alleged abuses of the US government’s mortgage insurance programme,
Aer Lingus stake set for take off?
Aer Lingus, the troubled Irish flag carrier, has been in focus on Tuesday.
The Daily Mail reckons Ryanair is making a third attempt to acquire the airline, in a bid to create an all-Irish national champion:
Cash is king
Here’s something you don’t hear very often in the City of London: cash doesn’t get the attention it deserves as an asset class.
But SocGen’s strategist Dylan Grice wants to change that. He reckons there are times when it’s simply the best thing to own.
US files civil suit against Deutsche Bank’s MortgageIT [updated]
Breaking on Tuesday (flashes via Reuters):
Today 14:30 – U.S. FILES CIVIL MORTGAGE FRAUD LAWSUIT AGAINST DEUTSCHE BANK AG DBKGn.DE, MORTGAGE IT INC – COURT FILING
Today 14:30 – U.S. SAYS DEUTSCHE BANK,
Choose your own MBS accounting
Basel III. Accounting. Mortgage-Backed Securities. Yawn.
But wait — Basel III’s attempt to incentivise banks into managing their interest rate risk could be about to permanently alter the way banks handle some $1,480bn worth of MBS,
The ongoing mess in Allied Irish’s capital structure
So bad a mess even the hedging looks bust.
Quite apart from threatening to overturn the foundation-stone financial hierarchy of debt over equity…
There’s another way Allied Irish’s subordinated liabilities order might kill a market,
Gunfight at High Yield
Tom Young over at IFLR has something interesting.
It’s a letter purportedly written by 30 of the biggest high-yield debt investors in Europe, and sent to high-yield underwriters — the banks. You can view the whole thing by taking out a quick trial subscription to the International Financial Law Review,
More on Greek debt buybacks
Petros Christodolou, director-general of the Hellenic Public Debt Management Agency, writes in response to our recent post on Greece buying back some debt:
I believe this article was way off the mark,