May, 2011
Iceland’s second volcano e-raptures
Uh oh. Remember this time last year when Iceland’s Eyjafjallajökull volcano was causing £130m worth of losses a day for airlines?
Well, bang on time for the rapture, Iceland’s second and most active volcano Grimsvoetn has began erupting:
A shiver of core contagion
A surprisingly strong reaction to S&P’s late Friday negative revision of Italy’s credit rating, plus Greek torpor, plus Spanish elections…
Either way — the euro’s at a two-month low and just above $1.40 at pixel time.
The biggest hedgies in Asia, and the world
Here’s something worth noting, amid the flux in Asian investment circles and the steady exodus of hedge funds from Japan to more investor-friendly climes of Singapore and Hong Kong — even as investment interest revives among Japan-focused funds:
Further reading
Elsewhere on Monday,
- Sudden wealth syndrome, now what?
- Other people’s politics.
- In defense of LinkedIn’s investment bankers.
- The ‘Goldman Bunch’: where are they now?
- The importance of fiscal versus monetary stimulus.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: America’s deepening default chasm
A United States sovereign default is a stunning prospect, you might think. Washington views it with equanimity,
Snap news
Breaking pre-market news on Monday,
- Asian stocks drop to two-month low after Greece downgrade – Bloomberg.
- Lagarde still leads IMF race, Mexico puts forward Agustin Carstens – Reuters.
- Corporate:
FTfm on AV
Some highlights from Monday’s FTfm.
Boutiques grab growing market share
Small investment boutiques are breaking through the glass ceiling and taking significant market share from the industry’s heavyweights,
The Weekender
This week on FT Alphaville,
- We asked, how do you say bail-in in Swedish?
- Dubai became an upside-down and inverted Greece.
- China has a trust issue.
- Deutsche Bank had an existential crisis.
Further further reading
For the commute home, which for the moment remains firmly on planet earth,
- “Neither the vagaries of the modern fiscal cycle, nor net-present-value calculations over reasonably foreseeable futures,
Goldman: psst… we’re to be subpoenaed
An old boss of ours used to stress the benefits of being “proactively reactive”, jargon we never fully understood until we read this story in Friday’s WSJ:
Goldman Braces for Federal Subpoenas
Goldman Sachs Group Inc.
Tech stocks: it’s about the economy, too
Most of the commentary about LinkedIn’s post-IPO pop has either focused on the long-awaited rush by investors into the social media space or, more generally, on an incipient tech bubble reminiscent of the late 1990s.
It’s all falling apart for Greece on Friday…
First the Norwegians may decide they’re not playing ball with the €25m they’re due to give Greece.
And then Fitch Ratings throws in the towel on Greece’s BB+ rating. It’s now rating Greece B+, which shifts the country from the “non-investment grade speculative”
US Markets Live transcript 20 May 2011
Markets Live chat transcript for the chat ending at 15:06 on 20 May 2011. Participants in this chat were: John McDermott Cardiff Garcia JMGood morning America! JMGood morning USA!
Reminder: US Markets Live starts in one hour
10am in New York, 3pm in London.
You know the drill.
We’ll look at the pros and cons of potential DSK successors, the BP announcement, yesterday’s wacky day of trading in the US, plus the latest on the European debt situation,
Silver and short covering – a theory
John Kemp at Reuters has already written about how it wasn’t necessarily the froth in the market that caused the parabolic rise in silver over April:
Now, on Friday, Pragmatic Capitalism has a post explaining why the CFTC’s committment of traders report possibly proves it was indeed short covering which was responsible for the rise,
The extend and pretend exposé – coming to a bank near you
In March, the US Securities and Exchange Commission fired off a few letters asking a number of America’s regional banks to clarify their loan modification practices. In particular the SEC is reportedly looking into “troubled debt restructurings”
Markets Live transcript 20 May 2011
Markets Live chat transcript for the chat ending at 11:26 on 20 May 2011. Participants in this chat were: bryce.elder Joseph Cotterill, FT BEGood morning, everyone. BEAnd welcome to another Markets Live
Life on Pandora is challenging
While the market’s attention was focused on the pop in LinkedIn’s US debut, another recently listed stock was having trouble of a different sort.
On Thursday, shares in Copenhagen-based jewellery maker Pandora — which listed on the Danish market in October 2010 at a valuation of €5bn — closed down more 21.65 per cent at DKK 199:
The tragedy of Tepco, yes it can get worse
The seemingly endless kabuki tragedy of Tepco lurches on, with Friday’s announcements that the utility behind one of the world’s worst nuclear contamination scares incurred Japan’s largest loss for a non-financial company ever.
Further reading
Elsewhere on Friday,
- Remember when you could expense pretty much anything?
- The triple-digit IPO list.
- It puts one in mind of those tech bubble IPOs.
- Truffles, media and markets.
- How might an insider tip work in the death derivatives market?
- Debunking Reinhart and Rogoff.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Beware tail risks hanging over Treasuries
Three years ago, investors received a brutal lesson in why it can be risky for banks or other financial institutions to fund long-term holdings with short-term debt,
Snap news
Breaking pre-market news on Friday,
- BP wins $1bn in Macondo payments from MOEX — statement.
- Japan’s Tepco posts record $15 bln loss on nuclear crisis costs – Reuters.
- HMV agrees £53m sale of Waterstones to Alexander Mamut – statement.
Further further reading
For the commute home,
- President Obama’s Asset Allocation.
- Are we on the brink of high inflation (warning: includes equations).
- Tim Harford on unexpected economics.
- The DSK saga is not just a French thing.
Build America Bonds, redux
John Bellows, Acting Assistant Secretary for Economic Policy, has a post on the US treasury blog calling for the reintroduction of Build America Bonds. It’s quite interesting — honest.
Babs expired in December 2010,
DSK granted bail at $1m bond
The most famous Rikers Island guest since Tupac Shakur has been granted bail:
NEW YORK, May 19 (Reuters) – Dominique Strauss-Kahn was granted bail by a New York judge on Thursday, and the former IMF chief has vowed to fight charges that he tried to rape a hotel maid in Manhattan.
Post-bubblicous posterity
A chart from RenCap showing the top ten Day 1 Pops in the post-bubble era (since 2001):
At pixel time, LinkedIn was trading at $105.95, 135 per cent above its pricing and just enough to slide into the No3 spot if it holds.
The (collateral) walls of Piraeus
Now this is a Greek banks + ECB collateral puzzle, pointed out to us on Thursday:
PIRAEUS BANK S.A. – BOND AMENDMENT
Piraeus Bank S.A. Series 50 Tranche 1 EUR 1,970,000,000 Floating Rate Notes due April 2013
Piraeus Bank S.A.