August, 2011
Further reading
Elsewhere on Monday,
- Magnus goes Marxist. Or something.
- Consent is evaporating, all around the world.
- The SEC should tell the DC Circuit to, er, shove it.
- MMT, bond issuance and inflation.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Peter Spiegel: Europe struggles with path to fiscal union
During a closed-door summit in June, José Manuel Barroso, European Commission president,
Snap news
Breaking pre-market news on Monday,
- IG Group updates Q3 revenue forecast on “record levels of client activity” — statement.
- Amlin posts £192.3m pre-tax loss on disaster claims in first half — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Asia drives mutual fund sales
Asian investors have rediscovered their waning appetite for equity and bond funds, kicking off a fledgling recovery in mutual fund sales across the region,
Markets Live — Suspended
The bags are packed, the taxi is booked, the tickets have arrived… yep Markets Live (UK) is taking a well earned break.
For the next couple of weeks you will have to make do without your daily dose of banter mixed with markets tittle-tattle.
Those commodities positions… revealed
The mystery seems to have been solved, for now.
The Scooby Doo of the day is Vermont Senator Bernie Sanders, who posted two “confidential” CFTC documents on his website on Friday.
First, a pdf version of a CFTC spreadsheet earlier posted by Reuters showing the total long and short positions taken on WTI crude oil,
Further further reading
For the commute home,
- The IMF is left unimpressed with China’s bubble management.
- Rules for surviving a crash.
- The American Bankers Association is worried about virtual currency.
- The correlation bubble isn’t going to burst.
The Weekender
On FT Alphaville this week,
- We asked whether the New York Fed should be worried about European banks.
- Twice.
- We looked at the historical roots of US monetary policy.
- HP made an oddly generous offer for Autonomy.
Shelling out during the Great Depression
A relic from an earlier cash crisis, via the NY Fed’s Liberty Street Blog:
Fascinating: “As the clamshell went from person to person, it was signed, and when cash became available again, the clamshell could finally be redeemed.”
Destination, safety; origin, everywhere
That faint rumbling is the sound of funds investors marching out of… everything:
August is the first month since September 2008 that we’ve seen net outflows from equities, bonds and cash. For the first time this year, Global Bond Funds suffered from net monthly outflows of $16bn in August,
More on that US dollar funding problem [updated]
Not for the first time, we may have spoke too soon.
Nomura’s fixed income research strategists are out with a Friday note on foreign banks’ funding woes, and they argue that the situation is likely to get a fair bit worse before it gets better.
Basis swaps and beer
One way to visualise the pressure at the short end of the euro basis swaps curve — indicating trouble getting short-term dollar funding for an unknown number of European banks there — is to go 3D.
Such as here.
HP *FAIL*
Related link:
HP’s remarkably generous offer – FT Alphaville
US Markets Live transcript 19 Aug 2011
Markets Live chat transcript for the chat ending at 15:12 on 19 Aug 2011. Participants in this chat were: John McDermott Cardiff Garcia Neil Hume, FT bryce.elder Rally Monkey Joseph Cotterill, FT
Le grande Apple [updated]
(Graphic via Scott Barber at Reuters)
Yup. Apple is the same size as entire eurozone banking sector – as measured by the free float of the Euro Stoxx banks index.
We’re not sure what, if anything,
More on the Greek collateral grab
The latest — maybe they’ll all just pretend this never happened?
The head of the Finnish bank OP-Pohjola said on Friday that Greece might not pledge cash collateral to any country involved in its second bailout after all,
The life of Bryan, or what did monetary policy ever do for us?
To understand why Rick Perry this week picked a fight with Ben Bernanke and why media pariah Ron Paul continues to attract a cult following, it helps to know what happened on the evening of June 20, 1790 at a New York dinner party.
Markets Live transcript 19 Aug 2011
Markets Live chat transcript for the chat ending at 11:23 on 19 Aug 2011. Participants in this chat were: Neil Hume, FT Joseph Cotterill, FT Izabella Kaminska NHBonjour NHwelcome to markets live
Staring recession in the face
The 6 per cent Kospi drop overnight was a warning…
And a look via Reuters at Europe’s biggest fallers at pixel time shows plenty of blue-chips getting smashed. Financials were bearing the brunt too with Italian banks suspended limit down this morning already.
HP’s remarkably generous offer
HP’s offer for the company represents an excellent outcome for Autonomy shareholders, particularly in the current phase of stock market volatility.
The view of one City analyst on Friday morning. And it’s hard to disagree.
Further reading
Elsewhere on Friday,
- Sovereign finance innovation du jour.
- Of all G7 economies, only Canada has regained its pre-crisis GDP.
- “Leverage isn’t free”
- It’s well past time to talk NGDP targeting.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
William Wallis: Why Africa is leaving Europe behind
Africans are relishing something of a reversal in roles, writes William Wallis,
Snap news
Breaking pre-market news on Friday,
- Autonomy recommends £25.50 a share offer from Hewlett Packard — statement.
- Competition Commission finds a lack of competition in pay TV movies; BSkyB says no regulatory intervention needed — statement and statement.
Obliteration redux (redux)
Another bloody day, with much of the carnage coming early:
The Dax-30 index in Germany ended 5.8 per cent down, while the FTSE 100 in London was off 4.5 per cent. In New York, the S&P 500 closed 4.4 per cent lower.
A sorta meaningless inflation report
It wasn’t easy making heads and tails of Thursday’s surprisingly hot CPI, and like everyone else we soon became distracted by other things.
But we think it’s worth a late look, especially given all the rampant speculation about what the Fed’s next move will be.
Further further reading
For the commute home,
- A closer look at Texas.
- On the contents of tax expenditure.
- The long road to eurobonds.
- Gold = Treasuries.
- Taibbi vs the SEC.
- ECB as lender of last
Should the New York Fed be worried about European banks?
The Wall Street Journal splash on worries over European banks’ funding received a good deal of play on Thursday morning.
Federal and state regulators, signaling their growing worry that Europe’s debt crisis could spill into the U.S.
Avoiding the monetary road to serfdom
Sometimes it’s the simplest observations that stand out.
For example, when it comes to the question of money, perhaps popular singing sensation ABBA said it best:
I work all night, I work all day,
The Greek collateral grab
From an offering circular for Greece’s May 2012 floating rate note:
It’s a rare case of a negative pledge clause in a Greek bond — most of which lack these clauses, because they were issued under Greek law.
Treasuries, Lehman-fied [updated]
If there’s a chart to encapsulate Thursday’s market panic:
It’ll be the 10-year Treasury yield falling under 2 per cent. That’s breaching the lows seen in 2008 after Lehman Brothers collapsed. We’re checking when Treasuries were last this low,