August, 2011
Meltdown markets live — on air now
Trichet, what have you done? Tanking stocks in the US and Europe screaming into the close. Bring your tin hats because we’re holding an emergency markets live right now…
What was that about QE3?
US stocks ended their bear run on Wednesday but it was tin hat time again on Thursday morning.
Idle QE3 chit chat between three former Fed directors and the Wall Street Journal was cited by many as the reason for Wednesday’s about-turn.
Gold’s non-record level
What with all its recent records, you’d be forgiven for thinking that gold prices were dangerously extended.
However, Lombard Street Research makes a good point on Thursday. Despite all the recent records,
Scraping the bond-buying barrel
We almost feel embarrassed for the European Central Bank. Almost. Its reputation for applying constructive ambiguity in the service of deploying immense firepower is under severe pressure anyway.
A short time ago,
Correction
RTRS – U.K.’S FTSE 100 INDEX FALLS 10% FROM FEBRUARY HIGH
Lloyds impaired
It seemed too good to last… and it was.
Lloyds Banking Group has bucked the trend in the UK banks sector and reported a disappointing set of half year figures.
At pixel time the shares were down 4.4p at 37.25p.
Markets Live transcript 4 Aug 2011
Markets Live chat transcript for the chat ending at 11:36 on 4 Aug 2011. Participants in this chat were: bryce.elder Neil Hume, FT BEAnd good morning once again BELive and direct from a very soggy One Southwark Bridge
Trichet, you’re our only hope [updated]
BRUSSELS(Dow Jones)–Euro-zone governments have begun discussing a change to their permanent sovereign rescue fund that could raise the currency bloc’s total rescue loan capacity to nearly EUR1 trillion,
Offer talks terminated
First BSkyB, then Laird and now Misys.
Ouch. It’s not a great time to be in merger arb (in the UK at least).
All the more so because there’s little prospect of making up losses in the remainder of the year.
Just cross it out and do bigger numbers
Because if anyone gets the true essence of doing quantitative easing after failing first time round, it’s Japan, no?
Related link:
Inter-yention action – FT Alphaville
Inter-yention action
It’s happened.
The Bank of Japan hit the currency intervention button for the first time since March, which, er clearly didn’t turn out so well:
RTRS-JAPAN FX INTERVENTION SO FAR ESTIMATED AT MORE THAN 1 TRLN YEN -TRADERS
And,
Further reading
Elsewhere on Thursday,
- Recession risk, German edition.
- Switzerland is QEasing.
- QE3 — why bother?
- The recession never really ended.
- Valley of the dweebs.
- Towards sound money.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Robert Barro: The coming crises of governments
The global crises of financial and housing markets are now being superseded by new crises of governments,
Snap news
Breaking pre-market news on Thursday,
- Lloyds Banking Group announces half year loss following PPI hit; maintains guidance — statement.
- Misys says offer talks with FIS terminated — statement.
Further further reading
For the commute home,
- Epicurean Dealmaker has some (rather rude) words for the SEC.
- MIT whizzes game a Massachusetts lottery.
- QE2.5, anyone?
- An instant classic headline from America’s finest news source.
Funding stress revisited
Yet more worries on Wednesday about the escalation of funding stress — this time from Nomura’s macro strategy team.
Like Morgan Stanley, it notes the rise in dollar funding costs (as displayed in the first chart below) through the FX basis market.
Oh Schweizer!
In the aftermath of Wednesday’s unexpected rate cut and liquidity measures from the SNB — all designed to weaken the Swiss franc – there was only one thought on many people’s minds.
Was this indeed the top for the Swiss franc? And if so,
Meltdown [updated -- to rollercoaster]
Nine days of stocks falling. Nasdaq — like the S&P 500 — is now negative for the year. Situation in crude also ugly and the 10-year Treasury yield is advancing down to 2.5 per cent:
Update — Nasdaq is back in positive territory at pixel time (the FTSE Eurofirst 300 closed down 2 per cent though.) WTI crude’s hugging $92.
Le plan, negatifs taux d’intérêt – redux
Oh dear.
The ‘psychological shock’ of Wednesday’s moves by the Swiss National Bank to stem the rapid rise of the franc is already wearing off — at least in the FX market.
Frankly, that’s no surprise.
The unintended tightening
Not good, not good at all.
From Morgan Stanley’s US rates team on Tuesday:
The funding markets had been stressed previously in April-June 2010 due to risks associated with the sovereign debt crisis in Europe.
Eventually, French Spreads Fail (E.F.S.F.)
Or — when markets really do go straight to the senior tranche.
Everyone seems to be waking up to the record spread between French bonds and Bunds at the moment. Having risen in July, it’s reached another record eurozone high on Wednesday of 81bps.
Markets Live transcript 3 Aug 2011
Markets Live chat transcript for the chat ending at 11:24 on 3 Aug 2011. Participants in this chat were: bryce.elder Neil Hume, FT BEGood morning BEAnd welcome to Markets Live
Survival of the fittest — an Evolution bid
Who on earth would want to buy a UK stockbroker at the moment?
The sector is blighted by over capacity, low trading volumes, and a lack of investor appetite in new listings. Add to that the rise of direct market access and dark pools and the outlook is truly bleak.
The US’s Greece-y new debt dynamics
Some debt doom and gloom from Independent Strategy’s Bob McKee…
… a man who, quite literally, wrote the book on sovereign debt crises.
He notes that the debt deal reached earlier this week does little to address the most pressing of the US’s fiscal issues.
Greek provisioning, SocGen style
Within Société Générale’s generally terrible Q2 results…
Can anyone explain why the bank continued to use market valuations for its Greek bond impairment (€395m before tax), whereas BNP Paribas has been marking to model?
It’s the same basic asset,
SocGen gives up on net income
The half-year reporting season for the UK banking sector may have started well, with results from HSBC, Barclays and Standard Chartered all exceeding expectations, but a different story is emerging on the continent.
Le plan, negatifs taux d’intérêt
On Wednesday, the SNB unleashed it’s ultimate Swiss franc depreciation plan — le plan, negatifs taux d’intérêt — a.k.a the strongest signal yet that it is prepared to take interest rates negative to curb Swiss franc strength.
The SNB can change your franc in seven days!
Look into our eyes. Not around the eyes. Deep, deep, deep into our eyes. You feel you’re getting sleepy. You feel safe and complete. You do not want to hold the franc any longer. You think the franc is rubbish.