June, 2011
Further reading
Elsewhere on Thursday,
- All UK rate hike bets are off.
- What geophysics can tell us about tail risk.
- Germany has been the biggest ‘debt transgressor.’
- The bankers who cried wolf on regulation.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: The price of Wall Street’s black box
JPMorgan Chase this week became the second Wall Street bank after Goldman Sachs to face a large fine and a stiff warning over its sales of mortgage-backed bonds in the last days of the housing bubble in spring 2007,
Snap news
Breaking pre-market news on Thursday,
- Aviva sells RAC to Carlyle Group for £1bn — statement.
- Ferragamo IPO well covered ahead of close — report.
- Dixons Retail loses finance director;
Further further reading
For the commute home,
- The new golden parachute: an iPad (hat tip Deal Journal).
- Keynesianism in prior recessions, infographic edition.
- The new FOMC projections.
- VCs think IPO activity low,
US Markets Live transcript 22 Jun 2011
Markets Live chat transcript for the chat ending at 19:16 on 22 Jun 2011. Participants in this chat were: Cardiff Garcia John McDermott Neil Hume, FT Gavyn Davies CGGood afternoon/evening
Koo and Gross on what Bernanke will do next
Apologies for the public school levels of surname chicanery in the title but a couple of big hitters have weighed in before the Fed Chairman’s special appearance on US Markets Live on Wednesday.
Richard Koo, chief economist at Nomura Research Institute and analyst-in-chief of “balance sheet recessions”,
FOMC statement – 22 June 2011
First a reminder that we’re having a special edition of US Markets Live to cover the Bernanke presser starting at 2:05pm New York time (7:05pm in London).
The full FOMC statement is below. As expected,
How much is the Bernanke put worth?
Here’s an interesting observation from a recently released NBER paper: why are put options on the financial sector index cheaper than those on member banks?
Bryan Kelly of the University of Chicago Booth School of Business,
Vox populi, vox debita
There’s a great Bloomberg survey of American voters on the economy out on Wednesday, with the results throwing up some striking stuff pre-FOMC.
Bloomberg’s reckons it’s all a deeply gloomy perspective on the recovery.
Lights go off at Philips
For Wednesday’s equity market disaster du jour we take a short hop across the North Sea to the Netherlands and Koninklijke Philips Electronics, which has unleashed an ugly profits warning that’s knocked about EUR2.5bn from its market capitalisation.
The impossible debt ceiling rollover
In which UBS slaps down anyone foolishly phlegmatic enough to think the US could miss the August 2 “deadline” for raising the debt ceiling, and escape unscathed.
The note, surely pitched for FT Alphaville,
When Italy is already priced to wreck the eurozone
It’s a funny old world. In the original ‘why the eurozone will break up’ papers of the 1990s and early 2000s, it was never ever high Greek deficits, or Irish (or Spanish) bank losses going on to public balance sheets that were forecast to destroy the single currency.
The difficulty of defining domestic inflation
Have you heard? High inflation is OK. Or rather, increasing the Bank Rate wouldn’t do much to solve it at this time.
It’s not really news if you’ve been watching recent justifications for UK monetary policy,
Some strain in China
The People’s Bank of China said it won’t sterilise its biweekly open market operation on Thursday, after money market rates more than doubled in the past six days alone.
Some more over here.
IMF to Europe: could you try TAF please?
In this context, it will be essential to bring the unproductive debate about debt re-profiling or restructuring to closure quickly.
We were so distracted by the IMF’s pragmatic controversial application of the word ‘unproductive’ in its Article IV consultation on the eurozone…
Reasons for a UK QE2 trade
To the minutes of the last Bank of England Monetary Policy Committee meeting…
… specifically paragraph 25 where the majority view is discussed:
25 - Most members judged that it was appropriate to maintain the current stance of monetary policy at this meeting.
And the high-yield boom continues…
It’s the clash of the high-yield press releases this Wednesday.
Here’s Standard & Poor’s, with a new high-yield report published at 9.55am London time:
Record demand for high-yield bonds in Europe carries downside credit risk
And here’s Baring Asset Management with a press release of their own sent out 20 minutes later:
Markets Live transcript 22 Jun 2011
Markets Live chat transcript for the chat ending at 11:38 on 22 Jun 2011. Participants in this chat were: stuart.tarry bryce.elder Paul Murphy Neil Hume, FT STHello STHello?
Old Guard seizes Markets Live
Login at 11am London time. HERE
Hume is OUT (at least for the day).
Murphy is BACK (temporarily, mind the typos).
Lodge stock requests below.
Session gets underway at 11.03am on the dot.
Out of date backgrounder available here.
Spain is killing structured products
It’s natural that a sovereign or a bank which is having trouble getting its debt away in the market, might target retail domestic investors.
Indeed, through the issue of small government bond denominations or indirectly via high-yielding deposit wars,
Luanda, via Lisbon
Big call from Citi’s Kato Mukuru and Alex Atienza.
In a 132-page note out on Wednesday, they recommend investors buy Portuguese banks — in order to gain exposure to Africa, and specifically Angola.
Further reading
Elsewhere on Wednesday,
- Dealing with predictable volatility.
- Scrap yards are the new pawn shops.
- The misbehaviour of markets, a review.
- What’s the problem with delayed ETF settlements?
- Why the Greeks are sensitive.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Time for common sense on Greece
Albert Einstein is reported to have said that insanity consists of doing the same thing over and over again and expecting different results.
Snap news
Breaking pre-market news on Wednesday,
- Philips issues profits warning; blames consumer/lightning divisions — statement.
- AstraZeneca sells Astra Tech business to Dentsply International for $1.8bn — statement.
‘This crisis is the only opportunity to change Greece’ [updated]
UPDATE (2250):
155 YES 129 NO
The government has gained enough MPs to win the no-confidence vote. The parliamentary count had just finished at pixel time.
Now on to the small matter of Tuesday’s austerity vote…
Reminder: Markets Live, Bernanke presser edition, with guest host Gavyn Davies
Yep, it’s time for Bernanke vs The Good Guys The Press, Round 2.
(Sorry, but you can only use the fun nicknames — Fedstock, Fedapalooza, Bernanke Bowl, Ben and Fed’s Excellent Adventure* — once.)
The end of QE2 is nigh,
Further further reading
For the commute home,
- The economics of elite football clubs.
- That fake Sean Connery letter to Steve Jobs.
- The who, why, and how of Twitter.
- Swinging job markets.
- Why did 2011 go so wrong?
- Buttonwood on Albert Edwards.
JPM to pay $153m to settle Magnetar-related charges
Courtesy of the SEC, if you’re not the reading kind…
And if you are…
… the allegations:
Washington, D.C., June 21, 2011 – The Securities and Exchange Commission today announced that J.P.