July, 2011
Wake up and smell the BTPs — again
You know – some had been warning for a while that Italian government bonds were the true “too big to fail” instruments of the eurozone crisis, long before the bonds seriously began to trade like it.
People like Stefano Di Domizio,
Yes, Greece could devalue (while staying in the euro)
An eye-catching headline from UBS.
On Wednesday, economist Stephane Deo explains how Greece could use a sort of proxy for currency devaluation — the erm, traditional answer to debt overloads — to help haul its way out of crisis.
Further reading
Elsewhere on Wednesday,
- The great rationality paradox of economists.
- US housing: ‘In a way this is like 2005 all over again’
- There’s book-talking, and there’s patent-talking.
- Computer says no,
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Analysis: Europe – an elusive debt resolution
European leaders have been drawn into one of the most agonised debates seen since the eurozone debt crisis erupted nearly two years ago.
Snap news
Breaking pre-market news on Wednesday,
- AstraZeneca says FDA advisory committee has voted against diabetes drug dapagliflozin — statement.
- Handelsbanken reports better-than-expected Q2 results — statement.
Further further reading
For the commute home,
- William Cohan is worried.
- The Gang of Six is back.
- Moynihan: read my lips, no new capital raises.
- FT’s Westminster blog stuck it out through the whole five hours.
Inflation expectations: frequency and focal points
The importance of inflation expectations to central bank policy is well-understood.
Equally well-known is that there are different, sometimes conflicting measures of these expectations. Surveys of households will show different expectations than surveys of professional economists,
US financials still lagging
US stocks are up slightly today, and the rally is happening entirely in the so-called “real” economy.
As per the norm since earnings season kicked off last week, financials are underperforming — here’s a look at the S&P vs the KBW bank index:
The IMF wakes up
Both the Commission and the ECB considered that a sovereign default or a credit event would likely trigger contagion to the core euro area economies with severe economic consequences. [IMF] Staff however also saw serious risks of contagion,
Markets Live transcript 19 Jul 2011
Markets Live chat transcript for the chat ending at 15:36 on 19 Jul 2011. Participants in this chat were: Joseph Cotterill, FT John McDermott bryce.elder Cardiff Garcia Neil Hume, FT
JCHello
Presenting… Murdochs Live
LIVE AT 1430 LONDON TIME – 0930 NEW YORK TIME
We’re doing a special Markets Live session for the appearances of Rupert Murdoch and James Murdoch, before the Parliamentary Culture, Media and Sport committee.
The UK bonus doldrums
The UK’s Office of National Statistics published its latest bonus data on Tuesday, and as can be seen below there’s been very little change on the year when it comes to bonus payments in “financial and insurance activities”:
Markets Live transcript 19 Jul 2011
Markets Live chat transcript for the chat ending at 11:30 on 19 Jul 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola Rabble NHsorry we are late NHsystem slow to start
Diary management the Autonomy way [updated]
It’s a while since Autonomy, the famously acquisitive and sensitive FTSE 100 software company, came on to our radar screen.
But that’s just changed.
This email was pinged round to City analysts and the press on Monday.
Contagion at the core
It’s safe to say we didn’t take this entirely seriously when it landed in the FT Alphaville inbox a couple of weeks ago.
GBP: The Closure of The News Of The World could be the start of a deeper and more lengthy commentary on Politics and the Press in the UK.
The FSB shopping list
The Financial Stability Board on Monday night declared the capital surcharge requirements for global ‘SIFIs’, as drafted by the Basel Committee last month, shall go ahead. Ditto “living wills”.
The real fun will come later this week,
Inside Ireland’s secret liquidity
A tidy scoop from RTE, who’ve uncovered key Irish government documents setting up Emergency Liquidity Assistance to banks:
…Mostly.
But it’s largely all there, focused on the critical period leading up to and after Ireland’s bailout,
Fiddling while Rome and Madrid burn
Brace yourselves.
It could be just a matter of days to weeks before a new leg of the systemic crisis therefore hits markets. Expect Italy, then Belgium but also other EGB to widen sharply.
So says Harvinder Sian,
What is going on inside News Corp’s board?
Events are moving ever more rapidly in News Corp-land, even before Rupert Murdoch’s appearance before British MPs later (starting 1430 UK time).
Compare (via Bloomberg):
News Corp. is considering elevating Chief Operating Officer Chase Carey to chief executive officer to succeed Rupert Murdoch,
Further reading
Elsewhere on Tuesday,
- Then why are Treasuries up?
- Munis are missing leverage, thus munis will not end the world.
- Return of the robo-signers.
- Friends of Rupert.
- Down to the wire.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gavyn Davies’ blog: Default risks in the US and Italy
Martin Wolf said to me last week: “I am off for a holiday. By the time I return, two G7 governments may have defaulted on their debt.” I think he was only joking,
Snap news
Breaking pre-market news on Tuesday,
- Electrolux warns on profits — statement.
- Q2 results from Nordea fall short of expectations — statement.
- Land Securities to start £275m of retail projects — statement.
Further further reading
For the commute home,
- Bill Clinton wants you!… to paint your roof.
- The New Yorker profiles Ray Dalio and Bridgewater.
- Fun with relative values: internet hottie edition.
- Nick Davies on Sean Hoare.
Consumption conundrums continued
David Leonhardt’s weekend column in the New York Times on the despondency of the US consumer has justifiably received a lot of play in the interwebs.
Here’s his main argument:
The Federal Reserve Bank of New York recently published a jarring report on what it calls discretionary service spending,
The good, the bad, and the ugly, News Corp edition
You’ve heard of good banks, bad banks, and toxic assets.
What about a good, bad and a toxic News Corporation?
Nomura has a note on Monday that splits News Corp into three companies with distinct revenue and earnings profiles.
A touch of anglo-periphery contagion
Adding to the sharp moves in Italian and Spanish banking stocks on Monday were also some rather sharpish slides in the UK banking sector — just ahead of the close of trade.
Not forgetting the Great British Krona versus the dollar…