June, 2011
Further further reading
For the commute home,
- Geithner to consider leaving Treasury after debt debate.
- Why US companies aren’t so American anymore.
- Confessions of a financial deregulator, by Brad DeLong.
- Here comes a cloud computing ETF.
US Treasury: NOBODY MENTION CHINA
The Department of the Treasury
MEMORANDUM
To: Staff (All)
Re: C***A
Reuters has painstakingly followed up on a rule change made in 2009 to how bidders in US debt auctions are classified,
And so farewell, QE2
The last QE2 open market operation: $12.47bn of Treasuries tendered by primary dealers, $4.91bn accepted by the Fed, $4.4bn of which was yesterday’s new seven-year bond.
As highlighted in FT Alphaville’s tombstone (data via Reuters):
Old demons return to haunt Premier Foods [updated]
Once toxic, always toxic.
That’s the price action in Premier Foods after Thursday’s shock profits warning, which has effectively killed off any hopes of a turnaround at the heavily indebted maker of Hovis bread,
That Greek bank risk in New Europe, continued
If there’s something Greek and strange in your neighbourhood (bank contagion risk to sovereign credit in emerging Europe, to be precise)…
…Who are you going to call?
In Nomura chart form:
Click to enlarge.
Glencore gives up (on quarterly reporting)
Once was enough for Glencore.
After releasing its maiden set of quarterly results just two weeks ago — sparking a rout in its its shares because of a disappointing performance from its key metals trading business — the company appears keen to remedy the situation.
S&P call time on investment banking
Don’t get them wrong. Rating agency Standard & Poor’s appreciates investment banking.
“Global banks need to service their client base with an investment banking arm,” they write in a report out on Thursday.
That was the Irish housing boom that was
A big hat-tip to Lorcan for this — the Irish 2011 census, which includes a nice chart of increases in housing stock, 2006-2011:
Over the period, Ireland’s housing stock expanded by 13.3 per cent,
The search for yield, 2011 edition
Yield, like love, can cause trouble when you search too hard for it.
Paul Fisher, executive director for markets at the Bank of England, on Wednesday gave a speech surveying the current state of financial markets.
The high-yield exodus, charted
From Data Explorers – a chart to show how shares on loan in iShares’ iBoxx high-yield corporate bond ETF have basically trebled since June 10:
More coverage over here…
Markets Live transcript 30 Jun 2011
Markets Live chat transcript for the chat ending at 11:33 on 30 Jun 2011. Participants in this chat were: bryce.elder Neil Hume, FT BEMorning all BEAnd welcome to another Markets Live
Does prejudice hinder economic growth?
For UBS economist Paul Donovan it’s not even a question, really
In a 16-page piece of research out this Thursday, he argues that “the issue of prejudice in society is not an abstract concept that investors can afford to ignore.”
Horta-Osório stops talking down Lloyds
He’s finally done it.
Antonio Horta-Osório has finally said something that’s made the Lloyds share price rise:
In truth there’s nothing surprising in Thursday’s long-awaited strategic review,
Will someone put the LSE out of its misery?
Required: another corporate mercy killing.
The target?
The London Stock Exchange, which has failed to consummate another deal and now needs to be put out of its misery.
Indeed, Thursday’s price action suggests the market is betting on a bid for the world’s 10th biggest exchange by market value before the year is out:
The CDO at the heart of the eurozone
You know, a certain FT reporter took a lot of shtick for a this article.
The gist — European sovereigns were increasingly turning to the kind of pre-crisis financial engineering to shift them out of crisis.
Further reading
Elsewhere on Thursday,
- It’s official — China is keeping Europe afloat.
- The Mosler plan for Greece.
- The very big TBTF info-graphic.
- So, why stock charts?
- Notes from Tim Harford’s new book.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Gavyn Davies’ blog: Super pessimism on growth potential
The FT led its front page on Monday with a startling headline: “Economic growth must slow,
Snap news
Breaking pre-market news on Thursday,
- Lloyds Banking Group to cut £1.5bn of costs; says net interest margin for 2011 will be just above 2 per cent — statement.
- The secretary of state for culture,
Further further reading
For the commute home,
- Back to dollar, dollar bills, or, rappers against the Euro.
- Guide to writing about Greece for people who can’t bear to write about Greece.
- Fed raises swipe fee cap,
A deleveraging detail
Credit Suisse have just published a note that adds a small bit of nuance to the US deleveraging narrative.
Household debt as a percentage of disposable income is the ratio typically used when discussing the progress of US debt reduction. And by this ratio,
Myspace sold
March 2006, Fortune:
“It looks like the best acquisition we’ve made in a long, long time,” Peter Chernin, the second-in-command at News Corp., said in an interview with FORTUNE. “MySpace is the single biggest growth opportunity this company has.”
Waiting for a Chinese local debt disaster
Standard Chartered analyst Stephen Green has been on the trail of China’s local debt saga for ages now.
Monday was a big day for him.
China’s National Audit Office released figures showing its municipalities owe a whopping Rmb10,700bn ($1,650bn) in debt,
BarCap barks at the IEA
The IEA slaps speculators … The speculators swat right back.
The FT has kept busy reporting how the International Energy Agency’s decision last week to release 60m barrels of oil reserves has burned some energy traders.
Austerity passes 155-138, markets shrug
So that’s that.
Other than the outcome and the protests in the streets, there was just one bit of drama related to Wednesday’s fiscal austerity vote in Greece, as reported by Reuters:
Only one member of Papandreou’s Socialist party voted against the law and the speaker of parliament announced he had been immediately expelled from the party.
Bank of America’s settlement
Remember those blemished Countrywide loans and the pointed letter from RMBS investors that Bank of America received last October?
The bondholders had alleged that Countrywide had failed to meet certain underwriting standards for the loans included in these RMBS deals and had improperly serviced the loans,
Spotted – a pre-crisis pro-forma CMBS practice
“The steady erosion of loan-to-value requirements and Debt Service Coverage Ratio [DSCR] standards is not as concerning as the reintroduction of pro-forma loans. It is one thing to make a bet on what you know is there,
Restructuring the Greek pie
Who holds Greek debt right now, from UBS:
Who might hold Greek debt in a year, from UBS:
The rush for private sector involvement, explained.
Markets Live transcript 29 Jun 2011
Markets Live chat transcript for the chat ending at 11:32 on 29 Jun 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola markets rabble NHand welcome to anther edition of Markets Live
The Glencore lovefest
Meh!
The IPO research blackout on Glencore International has been lifted this Wednesday, which means the investment banks responsible for the UK’s latest IPO flop are now free to heap praise on the commodities trading house.
SocGen’s Q&A on the French proposal
Because … as a French bank, they would be well-placed to discuss it, no?
On Tuesday we got a glimpse of the so-called French proposal to save Greece, resembling a mix of super-complicated SPV and Brady bonds.