July, 2011
US Markets Live transcript 15 Jul 2011
Markets Live chat transcript for the chat ending at 15:05 on 15 Jul 2011. Participants in this chat were: Cardiff Garcia John McDermott Neil Hume, FT CGGoooood morning CGMorning @SilverFox
The price of distressed Treasuries
More and more folks are arguing (see Bob Janjuah, Caroline Baum, or Joe Weisenthal) that in the event of an imminent United States sovereign default, there’s only one thing to hold:
United States sovereign debt.
Reminder: US ML begins at 10am New York time
That’s 3pm in London for the imperialists among you.
On the agenda will be US bank earnings, the debt ceiling debacle, Google, and this morning’s inflation numbers and other macro data. As usual, we’ll also invite one of our London colleagues to pop in for an update on the eurozone debt situation.
So how did the stress test go, Atebank?
And yes, it speaks volumes we asked the same question a year ago, and are expecting exactly the same answer. ‘Til next year then!
Related link:
Greek banks boost capital ahead of stress tests –
More on fiscal union as the ultimate solution
On Friday, the theme of fiscal resolution to the European problem was gaining ground once again
Pimco’s Mohammed El Erian, writing in the FT, expressed the idea as one of only two possible paths for Europe at this stage.
Markets Live transcript 15 Jul 2011
Markets Live chat transcript for the chat ending at 11:33 on 15 Jul 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHhola markets rabble NHand welcome to ML
The unstressed tests, and Italy bonds
We’re getting the results of the European bank stress tests later (at 1700 London time) and while we’ll discover who has failed, or nearly failed, the raw data on sovereign exposures, as Jonathan Weil notes,
Marius Kloppers finds something to buy
Here it is:
Kloppers has had a hard time with acquisitions since taking over at the helm of the world’s biggest miner in 2007.
First was BHP’s all-share offer for Rio Tinto, dropped amidst the turmoil of the financial crisis;
Big Oil break-ups
First Marathon Oil, then ConocoPhillips, next BP?
The Lex column doesn’t think further Big Oil break-ups are likely:
Whether or not the sum of the parts really is greater than the whole, this is what the market believes and perception is reality.
Further reading
Elsewhere on Friday,
- Beware the “confidence names.”
- Inside the Lehman bond recoveries.
- ‘It is no coincidence that many trading desks are stacked with former college athletes.’
- Why traders aren’t price-taking gods.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Goodbye to the harlot’s prerogative
We are watching the tormented turn on the tormentor, writes the FT columnist. Not so long ago Britain’s political establishment was laid low by the media furore over fiddled parliamentary expenses.
Snap News
Breaking pre-market news on Friday,
- BHP Billiton to buy Petrohawk Energy Corporation for $12.1bn — statement.
- Credit Suisse drawn into US tax probe — report.
- Rupert Murdoch says News Corp has only made some minor mistakes — report.
BHP swoops on US shale gas
Looks like BHP wasn’t put off by that NY Times story about shale gas:
BHP Billiton [ASX: BHP, NYSE: BHP, LSE: BLT, JSE: BIL] and Petrohawk Energy
Corporation (“Petrohawk”) [NYSE: HK] announced
Further further reading
For the commute home,
- Jamie Dimon: “There have been so many flaws in mortgages that it’s been an unmitigated disaster.”
- The GAO looks at prop trading and Dodd-Frank implementation costs.
FBI opens preliminary inquiry into News Corp 9/11 allegations [updated]
From the New York Times on Thursday afternoon:
In response to requests from members of Congress and at least one news media report, the Federal Bureau of Investigation in New York on Thursday opened a preliminary inquiry into allegations that News Corporation journalists sought to gain access to the phone records of victims of the Sept.
The municipal middle man misses out again
Pity the municipal middle man.
Wednesday’s WSJ has an interesting article on covenants that banks are attaching to direct loans made to municipalities seeking refuge from the capital markets. (The Bond Buyer reported back in February on the move toward direct lending.)
The counterparties clearly see a win-win here:
What’s a Swiss central bank to do?
As has been well documented, the Swiss franc’s relentless rise has been causing no end of headaches.
Swiss exporters, Swiss banks and even Polish and Hungarian mortgage holders have all been affected.
The Swiss National Bank of Poland (and other CEE countries)
If you thought the Swiss were getting tetchy about the strength of the Swiss Franc, note the following headline from the business section of Poland’s top internet portal Onet.pl on Thursday:
Translation:
A week in CDS spreads
From Moody’s Analytics — an epic (European) week, as expressed through CDS spreads:
——————-
We all know by now that Italian banks have suffered over the past seven days. Banks in Cyprus were pulled down by continued uncertainty in Greece,
‘Greece is not Italy’
We’re not sure if this is the kind of changing of the subject that was wearisomely typical of his predecessors, or actually a good point on July’s paradigm shift in the eurozone bond market.
Anyway — quote du jour from Greek finance minister Evangelos Venizelos in a speech made on Thursday:
Bob’s on bear alert
Nomura’s Bob ‘the bear’ Janjuah returned to his keyboard last week.
Not much has changed since then. He still thinks Greece, Portugal and Ireland are insolvent nations, the developed world isn’t really recovering economically (hello,
Measuring Italian-ski exposure
Italian jitters, alas, have not dissipated on Thursday. The sovereign was forced to pay severely high yields (some at records) on the sale of nearly €3bn in new bonds, in what many described as a make-or-break test of investor confidence for the eurozone.
The International Monoline Fund, ECB and Greek banks edition
Among things you can find out from reading the IMF staff’s 172-page fourth review of the Greek bailout:
1) The Greek central bank is making contingency plans for providing lenders with emergency liquidity assistance outside the European Central Bank (p.
Subprime selling off, again
Securitised subprime — it’s still not doing well.
While synthetic indices like the the ABX and CMBX have partially recovered from lows reached in the spring, non-agency Residential Mortgage-Backed Securities (RMBS) remain in the gutter.
Markets Live transcript 14 Jul 2011
Markets Live chat transcript for the chat ending at 11:31 on 14 Jul 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola rabble NHwelcome to ML NHnow tin hat
On the matter of misvalued Chinese land
Phew..! What a relief.
The Chinese danger is no more.
As we all know by know, data released on Wednesday categorically confirmed that Chinese growth had defied recent tightening measures by monetary authorities and continued on track in the second quarter at 9.5 per cent (thus saving the world).
Get ready for QE2 UK. Sort of
The lower-than-expected UK inflation figure for June is reviving chit chat of a second round of monetary easing, first sparked by last month’s minutes from the Monetary Policy Committee.
The economics team at Credit Suisse are joining in — not that they think it will happen any time soon;