June, 2011
Italy will be eurozone’s biggest test, says Altman Z-score creator
As Risk reports, Edward Altman, senior advisor to Classis Capital and creator of the Altman Z-scores used to predict corporate bankruptcies, made an interesting (sovereign) point on Friday.
The future of the eurozone will rest not on Spain,
Virtual money, from real central bank mistrust
What happens when you cross computer geeks with populist outrage at central banks?
Bitcoins happen.
New Scientist reports in its latest edition that a new virtual currency is harnessing peer-to-peer networking and high-tech computer-run algorithims to rival central-bank issued money.
Markets Live transcript 6 Jun 2011
Markets Live chat transcript for the chat ending at 11:28 on 6 Jun 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola rabble NHwelcome to Markets Live
For the love of Ronia (and repo)
It confusingly shares a name with a Staines minicab operator…
And a Swedish children’s book…
But this Ronia (short for Repurchase Overnight Index Average) is going to be very special in its own right. It’s a brand new repo-based rate for the UK interbank market,
Clearing vs collateral
Encumbrance — along with collateral-shortage — is one of our favourite post-financial crisis terms.
A new paper from the Bank for International Settlement’s latest Quarterly Review deals with both in relation to central clearing,
Sino-Forest – a defence [updated]
Along with RBC Dominion Securities, Dundee Securities has been the biggest cheerleader for Sino-Forest, the Toronto-listed Chinese forestry operator accused of a massive fraud.
And while it’s put its rating and target price under review ($C34 a share if you were wondering) it still believes Sino-Forest will be exonerated once the independent committee files its report.
Supergroup goes on sale
SuperGroup, owner of the SuperDry fashion label, prides itself on providing full-price merchandise (except, of course, at its several outlet stores).
So what should we make of this advert, which helped knock 6 per cent off the share price on Friday?
Now,
Bis the burdensharing – new Greek exposure numbers
Something new from the Bank for International Settlements to mull over this Monday morning.
The BIS has released its Quarterly Review — and with it those infamous foreign claims numbers.
According to the new figures,
The holy grail of ETFs
We’ve never really touched upon the issue of active ETFs at FT Alphaville, because quite honestly the subject makes our heads hurt.
But we’ve decided we’ve possibly dodged the issue for long enough.
Further reading
Elsewhere on Monday,
- Peter Diamond walks out of the Fed race.
- So should Fed members be ambassadors to Ron Paul?
- Today’s Greece must-read.
- How I learned to stop worrying and, er, accept the end of QE2.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Analysis: Investment – exchange-traded funds
Exchange-traded funds make it easier to gain exposure to any market but regulators fret that their rapid rise poses risks to the system,
Snap news
Breaking pre-market news on Monday,
- Prada sets price range for flotation ; could raise up to $2.6bn — report.
- Moncler ditches IPO plan: sells stake to Eurazeo – report.
- Aegis confirms talks with Ipsos over Synovate division — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Call to ban ‘corporate access’
Independent research houses are calling for asset managers to be barred from rewarding investment banks for providing corporate access via their commission payments
Bull market stumbles but fundamentals remain strong
Overview of special report on investing in commodities that asks,
The Weekender
This week on FT Alphaville,
- We noted the calm before the volatility storm.
- CNH might be coming to a City near you.
- Moody’s downgraded just about everything.
- Apart from the United States.
A US consumption conundrum
After this unrelentingly awful week in US economic news, we should probably refrain from passing along a chart that’s headlined “End of the American Dream”.
But here it is anyway, courtesy of Reuters analyst John Kemp:
At least you’re not in Belarus
Country asks for another IMF bailout, after screwing up the first one. There are few signs of spending coming under control. The neighbour which really holds the purse strings demands ever more privatisation.
Sino-Forest responds: money does grow on trees
Sino-Forest Corporation issued a statement on Friday in response to Thursday’s precipitous drop in its share price, which was brought on by allegations from Muddy Waters of “stratospheric fraud” in the Canadian-listed company.
The biggest gamble in IMF history
…At any rate, it’s an absolute master-class in euphemism:
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded a mission to Greece to discuss recent economic developments and policies needed to keep the country’s economic program on track.
Dupe de Group(on) – some very special accounting
You gotta love new accounting principles — especially ones drummed up by IPO-ing tech firms.
From Groupon’s S-1 filing:
We measure our business with several financial metrics. The key metrics are gross profit,
The Vienna Initiative is already here
Bet you didn’t know that, huh?
Spotted in the Eurogroup’s May 16 aid plan for Portugal — a little bit of bank cooperation:
“At the same time, the Portuguese authorities will undertake to encourage
US Markets Live transcript 3 Jun 2011
Markets Live chat transcript for the chat ending at 15:23 on 3 Jun 2011. Participants in this chat were: John McDermott Cardiff Garcia Paul Murphy Stacy-Marie Ishmael, FT Joseph Cotterill, FT JMGood morning!
Payrolls fail, rose 54,000 in May
Cue a big collective “ouch”.
The consensus was for a reading of around 150,000, following a dire week of US data releases. The unemployment rate is now at 9.1 per cent. Estimates for the last two months were also revised down:
Markets Live transcript 3 Jun 2011
Markets Live chat transcript for the chat ending at 11:22 on 3 Jun 2011. Participants in this chat were: Tracy Alloway Izabella Kaminska TAHello? TA… TAWhere am I?
To (settlement) fail, or not to fail
Settlement fails are on the rise and many are beginning to worry about the systemic implications associated with a market culture that routinely shuffles the problem under the carpet. Particularly, they worry that fails are beginning to migrate to new asset classes,
The great UK debt reveal
It must be bash-the-UK week.
Following Tim Morgan’s warning and a forecast of a 10 per cent house price fall, Morgan Stanley’s Cath Sleeman and Melanie Baker have chimed in, with a note pouring doubt on the UK’s debt dynamics.
BarCap’s Hellenic tale of CDS tail risk
CDS on Greece. Will it, won’t it? Trigger, that is.
The idea that sovereign CDS on the Hellenic Republic might not fulfill its promised mandate has made many headlines of late. The basic idea is that a Greek debt restructuring might be designed in such a way that it explicitly doesn’t trigger CDS on Hellenic bonds.
This is really not normal ECB tightening
There’s the effect of rising European Central Bank rates on households in the periphery, and there’s the effect of two-tiered rate markets on periphery banks:
And quite often –as in these charts by Goldman analyst Dirk Schumacher– the two effects meet.
Further reading
Elsewhere on Friday,
- The new world of regulation by investigation.
- Groupon IPO – meet the billionaires.
- A trader, an FBI witness and a suicide…
- Now comes the really hard part for Greece.
Pink picks
Comment, analysis, and other offerings from Friday’s FT,
Martin Wolf: Arguing over the ABC and D of the crisis
The debate over post-crisis monetary and fiscal policy has been heating up, on both sides of the Atlantic,