July, 2011
FTfm on AV
Some highlights from Monday’s FTfm
‘Best-ideas’ funds come out on top
Highly concentrated “best-ideas” funds may be able to consistently outperform traditional, highly diversified active funds,
The Weekender
This week on FT Alphaville,
- We looked in-depth at settlement fails.
- Jeremy Grantham returned to the idea of peak dirt.
- The IIF’s Greek financing offer was testing, confusing or both.
- Chile offered some lessons for fiscal policy.
Further further reading
For the commute home,
- The House is set to vote at 6pm New York time on the Republicans’ doomed bill.
- Obama should just ignore the debt ceiling.
- A real-time analysis of the US treasury’s cashflow.
The safest of safe havens?
10-year US Treasuries just had their biggest one day rally since March 2009.
Perhaps the old AAA is the new AAA, after all. (No one mention the US dollar.)
Contingency planning in six charts
Morgan Stanley’s US interest rate strategists have included a lovely set of charts in their latest research note that portray the moves in short-term markets due to the debt ceiling impasse. The strategists stress that the price moves don’t reflect liquidity shortages but are “the functional equivalent of a tightening,
Preparing for a US debt disaster
A deal required before an Asian markets drop on Monday. Bankers summoned to a joint meeting with officials in New York. Congress paralysed. Despite our continuing optimism and markets’ relative insouciance,
Turn on, tune in. Step out, bail out. Blow up
Therefore we need better tools to ensure that financial market reactions do not endanger countries while they are in the process of implementing reforms…
– François Baroin and Wolfgang Schäuble
Illiquid and loopy in Cyprus
Not, in fact, a statement on the tourist denizens of Agia Napa.
There’s one thing you should know about Cypriot sovereign debt entering a full-blown crisis (S&P had just downgraded to BBB+ at pixel time,
US Markets Live transcript 29 Jul 2011
Markets Live chat transcript for the chat ending at 15:11 on 29 Jul 2011. Participants in this chat were: John McDermott Joseph Cotterill, FT Johanna Kassel, FT Izabella Kaminska JMGood morning!
US Markets Live starts at 10am New York time
The way things are going in Washington, it could be the last ever one* — you won’t want to miss it.
We’ll be “analysing” US GDP, the farcical debt ceiling impasse, a bad week for stocks, and anything else that comes to light.
US GDP fails in the past, present and futures
As if Friday wasn’t going to be messy enough, advance second quarter US GDP results have disappointed on the downside.
The US economy grew at an annualised rate of 1.3 per cent in the last quarter,
Terry Smith says the world is living in a fantasy
Terry Smith, CEO of Tullett Prebon, has given a remarkably bleak interview to the BBC’s Today programme on Friday.
Though it’s scarily logical.
Here are the key points:
1) He is very pessimistic about the Greek deal — “it doesn’t cut Greece’s debt enough”
Greece as a test for auditors
Much like the rating agencies, many auditors have suffered a crisis of creditability in recent years.
That will make their reaction to the IIF’s proposed financing offer for Greece all the more interesting.
Markets Live transcript 29 Jul 2011
Markets Live chat transcript for the chat ending at 11:20 on 29 Jul 2011. Participants in this chat were: bryce.elder Joseph Cotterill, FT BEAnd here we go again. BEWelcome to Friday,
A glance at UK GDP – across the North Sea
Things that impacted the UK’s second-quarter GDP, as announced by the ONS on Tuesday:
The additional bank holiday for the royal wedding
The royal wedding itself
The after-effects of the Japanese
When footballers become collateral
Can someone please stop the world? We want to get off.
Things are seemingly moving quickly from the ridiculous to the absurd, in sovereign debt crises.
Gary Jenkins, head of fixed income over at Evolution Securities,
Gold’s not as stretched as you might think, Citi says
One for the gold bugs, this.
The possibility of a surge in the price of gold is growing, according to the commodities team at Citigroup.
In fact, they say, the probability of a short-lived spike in gold is now above 25 per cent (up from 5 per cent just a few weeks ago) and that’s even without a worst-case economic scenario actually happening.
Moody’s puts Spain on review for downgrade
So much for a quiet August.
Just a week after eurozone authorities announced a new bailout package for Greece (and just before the start of Europe’s traditional August holiday period), Moody’s has put Spain on review for downgrade.
Further reading
Elsewhere on Friday,
- When government shuts down.
- Coffee wars III – The empire strikes back.
- Is this fall’s mystery book a Bernie Madoff tell-all?
- A modern land grab? Foreigners’ US real estate buys.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Five questions for the Fed and Treasury
This week, a cacophonous hubbub is overwhelming America’s airwaves, notes the FT’s Tett.
Snap news
Breaking pre-market news on Friday,
- BSkyB says will launch £750m buyback, announces 20 per cent dividend hike – statement.
- Vodafone to pay special dividend of £2.0bn from Verizon Wireless – statement.
Further further reading
For the commute home,
- The House is set to vote on the thing we all wish would go away.
- Bondholders to get priority in case of deadlock.
- An allegory for our times
- More on that Danish debt ceiling.
A year in financial instability
It may have escaped your attention but on Tuesday afternoon the Financial Stability Oversight Council (FSOC) published its first annual report into the state of the US financial system. Click below for 160 pages of pdf fun:
A CDS inversion unlike any other
There were a few rumours swirling through the interwebs earlier on Thursday that the Italian credit default swap curve had inverted.
We are sorry to disappoint, but according to Lisa Pollack at Markit,
A Greek bond swap oddity
Warning! — long post. But with investors still grappling with the terms of the Greek debt restructuring, it’s worth reading on…
Avid readers will remember Option 4 of the proposed Greece financing offer.
Markets Live transcript 28 Jul 2011
Markets Live chat transcript for the chat ending at 11:20 on 28 Jul 2011. Participants in this chat were: bryce.elder Joseph Cotterill, FT Izabella Kaminska BEOk. Let’s try this again shall we?
Dick Bove says – the search for a new safe haven is on
Gold? Pffft.
The euro? Too euro-trash.
The dollar? Puh-lease.
Rochdale banking analyst Richard Bove reckons the search is on to find a new global safe haven. Because even if this US debt debacle gets sorted by lifting the ceiling,
Around the world, in leverage
So much focus on government debt lately — won’t somebody please think of the household leverage?
Morgan Stanley’s Global Monetary Analyst team has:
(And yes, Ireland has been classified as both Anglo Saxon and periphery).