September, 2011
[Something for the weekend] Dear Lloyds: nobody wants to buy your bank
– By Neil Collins –
Dear Lloyds: nobody wants to buy your bank
It was going to be a hard-fought auction. The chance to buy a fully-formed network of bank branches, complete (one supposes) with all the trimmings,
The Weekender
This week on FT Alphaville,
- We questioned the many assumptions behind a leveraged EFSF.
- And scoffed at the mad EIB idea.
- Operation Twist was said to be “anti-stimulus”.
- A “trader” dreamt of defaulting Greeks.
The central bank Treasuries dump is not about Twist
“Are foreign central banks rejecting Operation Twist?”
That’s the provocative question asked in a note by RBS strategists this morning — and while the answer is “no”, the rationale for it is both intriguing and touches on some interesting developments happening around the globe.
Kodak: flash, crash
Eastman Kodak shares were suspended on Friday afternoon after WSJ and Bloomberg reports that the firm had hired bankruptcy lawyers from Jones Day:
If the 131 year-old firm does file for bankruptcy,
China: over-reliance and under-performance
Wonder why everyone is so scared about a possible Chinese slowdown? Here’s a stat for you: China is now forecast to contribute 28 per cent and 30 per cent of global growth in 2011 and 2012, respectively.
A guide to China CDS
The final HSBC/Markit Economics’ China PMI for September came out today with a reading that was above the flash estimate, but still at a level that signals contraction. Also evident was a worrying increase in factory inputs inflation,
US Markets Live transcript 30 Sep 2011
Markets Live chat transcript for the chat ending at 15:05 on 30 Sep 2011. Participants in this chat were: Cardiff Garcia Lisa Pollack John McDermott, FT CGWell, let’s try this again
US Markets Live reminder: 10am New York, 3pm London
John McDermott has returned from the Colombian hinterlands with what is surely the deepest tan ever fronted by a Scott (“Scot” — Ed.). So your usual tandem of hosts is back, except, well….
We have no idea what to talk about.
Levering the EFSF — privately… and painfully
Or, old-fashioned fun with default correlation.
By this point it is not looking good (if it ever really did) for the touted levering of the EFSF’s resources by borrowing from, or insuring in some way,
Bitter aftertaste for Asian Citrus
Earlier this week Anonymous, the amorphous cyber-collective, entered the securities analysis market with a hard-hitting report on Chaoda Modern Agriculture, a scandal plagued Chinese company.
From the FT:
Markets Live transcript 30 Sep 2011
Markets Live chat transcript for the chat ending at 11:26 on 30 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola rabble NHsorry we are late
The European recession of 2011/12
Yup, it really has come to this. Rather than debating if there will be a recession in Europe, economists are now trying to figure what it will look like and how long it will last.
RBS has already given us its view,
Le Spleen de Morgan Stanley
All is not well in the kingdom of Stanley. The CDS spreads have blown out and the market is concerned. Very, very concerned. Moody’s Analytics is here to tell us all about why that is.
The first [concern] is the exposure of MS to European institutions and the second is the level of trading revenues in the third quarter.
The S&P at 400 is almost inevitable
After his brief experiment with technical analysis (well, Killer Waves) uber bear Albert Edwards returns to more familiar ground in his latest Global Strategy Weekly.
Jeremy Grantham of GMO says this is “no market for young men”.
Further reading
Elsewhere on Friday,
- Michael Lewis on muni debt — schooled.
- Distressed debt buyers look to Europe.
- Jeffrey Gundlach on “The Bloodless Verdict of the Market”.
- Why the ECB is wrong about Italian deficits.
Pink picks
Comment, analysis and more from Friday’s FT,
Martin Wolf: Time to think the unthinkable and start printing again
It is the policy that dare not speak its name: the printing press. The time has come to employ this nuclear option on a grand scale.
Snap news
Breaking pre-market news on Friday,
- AstraZeneca settles Seroquel patent infringement case with Handa Pharmaceuticals – statement.
- Scottish & Southern announces £1.7bn capital and investment programme for 2011/12 — statement.
What baseball can tell us about financial crises
FT.com reporter Jason Abbruzzese submits this guest post for FT Alphaville.
Yogi Berra, 1973:
“It’s not over til it’s over.”
Timothy Geithner, 2006:
“In the financial system we have today,
Further further reading
For the commute home,
- Martin Wolf calls for QE2 in the UK.
- What’s in a tweet.
- A takedown of Confidence Men.
- Enjoy a Jamie Dimon experience.
- What really caused the eurozone crisis.
Michael Lewis and Meredith Whitney in muniland
Following his not-so Grand Tour of Europe, the esteemed vagabond financial scribe Michael Lewis has returned home to report on California for Vanity Fair:
In our opinion, it’s not as perceptive as his articles on Greece or Ireland but it’s still worth an Instapaper click.
Great Stagnations from the archives
It’s unwise to hear the ghosts of history in just one or two echoes of the present.
Which is just an overwrought our way of saying that it’s important to search beyond Japan for past experiences we can use to enlighten the current US situation.
A genuinely stressful stress test
Wouldn’t it be nice if bank stress tests were, well, stressful?
Too often they look like they’re done by him:
When they should be done by her:
Fortunately Arbuthnot’s Mr. Banks, James Ferguson,
Citi: Euro area recession likely to begin in Q4
UPDATE: As a commenter pointed out, Willem Buiter didn’t write some of the sections we quoted from below, and we’ve updated accordingly. His name is at the top of the Citi note that we’re excerpting, but the actual passages were written by other economists.
Mike Lynch and Oracle: Frank replies (updated)
In the words of Frank Quattrone, legendary deal-maker:
The slides Oracle posted publicly were sent by me to Mark Hurd in January, were prepared by Qatalyst and were for the purpose of our independently pitching Autonomy as an idea to Oracle.
Failure being devastating does not ensure success
There are only bad or very bad options left for Greece, the occasional fascination with this or that SPV-solution notwithstanding.
Chart du jour to bring home this point:
That’s from a big new Societe Generale note on the crisis which includes its economist Michala Marcussen trying to quantify a ‘disorderly’ Greek default in terms of economic costs.
Quick and decisive action! On short-selling, again
In a coordinated move after Wednesday evening’s close, the European Securities and Markets Authority announced an extension of the short selling bans in place for selected financial stocks in France, Italy,
Caption competition! German EFSF vote edition [updated]
That winning Merkel smile — via our colleagues at The World:
Stick your best work-safe captions below and the winner will get this special FT Alphaville Stein…
Update: We forgot to put a time limit! Entries in by the close of US markets this Friday,
Markets Live transcript 29 Sep 2011
Markets Live chat transcript for the chat ending at 11:25 on 29 Sep 2011. Participants in this chat were: Bryce Elder/FT Tony Tassell BEOk – we’re up and running. BEGood morning
FX bots make fairweather friends…
BIS is joining the HFT scrutiny party with a paper (PDF) on high frequency trading bots in foreign exchange markets.
It’s a comprehensive study of automated trading in forex, although we’ve already seen several incidents that could be attributed to high volume trades.
El Gordo, or, the Flat One
So, it looks like Spain’s lottery privatisation won’t comprise a piece of the increasingly random scatter chart of bullish news for the eurozone, as the FT reports:
Madrid cancelled the sale days ahead of its formal launch after it became concerned that the flotation might have ended up valuing the company at €17bn or less,