July, 2011
When cigarette makers go green
Who would have guessed. The colour smokers find most repulsive is olive green.
Well, that’s the finding of researchers working for the Australian government which on Wednesday launched a bill aimed at banning any form of branding on cigarette packs.
About that Chinese inflation rate
With China hiking interest rates by 25 basis points on Wednesday, reportedly to counter faster inflation, now is probably a very good time to bring up the issue of the country’s GDP deflator calculation.
China hikes interest rates by 25bps
So here it is — the fifth Chinese rate hike since October last year.
As Reuters reported on Wednesday:
BEIJING, July 6 (Reuters) – China’s central bank increased interest rates for the third time this year on Wednesday,
Inter-bank, minus the bank
That the European Central Bank has stepped in to replace much of the eurosystem liquidity that used to be provided by the banks’ themselves is well-known. Did you know, however, that one measure of the ECB’s liquidity provision is now higher than in the depths of the 2008 financial crisis?
It’s the ECB’s so-called ‘recycling’ of bank deposits,
Markets Live transcript 6 Jul 2011
Markets Live chat transcript for the chat ending at 11:26 on 6 Jul 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola Rabble NHwelcome to ML NHone moment
3i and a top City rainmaker
Are we about to see some action at struggling private equity group 3i? Chairman Sir Adrian Montague must be hoping so.
Amid talk that several large shareholders are planning to abstain or vote against re-election of chief executive,
European money market funds are hemorrhaging
Here’s an interesting chart from Société Générale compiled using data from EPFR Global.
It shows recent flows in and out of European money-market funds.
As can be seen, they’re seemingly hemorrhaging once again:
Further reading
Elsewhere on Wednesday,
- How the lack of a gold standard helped the world in 2008.
- On HFT and block trading.
- Does Twitter’s value exceed Facebook’s?
- The real ‘Iron Man’ is being tested.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Moment of truth for the eurozone
The biggest question in any debt crisis is whether a credible path back to solvency can be found.
Snap news
Breaking pre-market news on Wednesday,
- 3i appoints Greenhill’s Simon Borrows as its new chief investment officer — statement and results.
- Sodexo sees Q3 sales growth slow, but retains targets — statement.
Further further reading
For the commute home,
- An (overly simplistic) argument that Margaret Thatcher wasn’t such a small government devotee after all.
- The sorrow and pity of another liquidity trap.
- China mulling whether to let the SEC at its companies.
Corporates spending like it’s the 50s
The US equity gang at Credit Suisse, having previously warned us that the current profits expansion is starting to look a bit long in the tooth, are back with a new note about corporate spending decisions.
The great wall of Chinese worry
The big holes in Chinese local government balance sheets are back — and bigger than first thought, according to Moody’s.
As widely reported this morning, the rating agency reviewed the National Audit Office’s report on local government debt and concluded that it underestimates banks’ NPL exposure.
Moody’s downgrades Portugal on… Greece fears
Well, sort of. The full rationale behind Portugal’s downgrade to Ba2 from Baa1, with negative outlook, is pasted below.
Moody’s offers two main reasons. The second is Portugal’s ongoing high-debt-low-growth mash-up.
Italian wobbles del giorno
It’s just one day, but Tuesday ended in very poor fashion for Italy’s government bonds. The 10-year benchmark bond yield had breached five per cent at pixel time.
In CDS-land Italy was back close to 200bps,
Raid Fort Knox!… and other debt ceiling solutions
By Izabella Kaminska and Cardiff Garcia
How does one buy time when trying to avoid a US debt ceiling-related default?
Why not by repo-ing the Treasury’s $300bn worth of gold stocks?
It’s one solution that’s currently being touted by former Federal Reserve official and current Peterson Institute economist Joseph Gagnon,
The same crisis, again and again
Here’s a great collection of charts from Société Générale on Greece, Ireland, Portugal, and the short-term treadmill that binds them all (click to enlarge):
No sooner had the Greek parliament said yes to the Medium-Term Fiscal Strategy (MTFS),
Bob’s World is back
April was the last time we heard from Nomura’s Bob ‘the bear’ Janjuah.
Since then he’s picked up a fancy new title – Head of Tactical Asset Allocation — and following pressure from clients, has relaunched ‘Bob’s World’,
Stress testing bailouts, not banks
It’s a little over a week until we get the results of Europe’s second round of stress tests.
Here on FT Alphaville we’ve often wondered what’s the point, given that every one seems to think that the assumptions used by the stress test administrators,
Markets Live transcript 5 Jul 2011
Markets Live chat transcript for the chat ending at 11:19 on 5 Jul 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHhola and welcome to markets live NHFT AV’s daily market chat
‘Collective amnesia’ on mortgage reform
German financial consultant Achim Dübel doesn’t mince his words.
Last week he spoke to a group of European politicians, including representatives from the UK, Spain and Germany, to talk mortgage reform.
C&W Worldwide gets amber topped
From Tuesday’s FT:
Mr Pluthero and Ian Gibson, finance director designate, are set to receive performance shares in 2011-12 worth three times their salaries, which are £675,000 and £400,000 respectively.
ABS, CDS and various other acronyms in Australia
Your daily dose of financial innovation, right here.
Flexi ABS Trust 2011-1 may be a structured finance deal you’ve never heard of, but it’s making waves amongst securitisation types in Australia. Put simply it’s the first ever Australian deal to bundle interest-free payment plans for retail goods like jewellery,