September, 2011
Where’s the ECB?
At pixel time, the Italian 10-year spread to Bunds was past 340bps — far above recent ECB intervention levels. One of the interesting things about current Italian spreads also is that they have remained wider than Spain’s throughout August.
Markets Live transcript 5 Sep 2011
Markets Live chat transcript for the chat ending at 11:35 on 5 Sep 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola NHbonjour NHhello
Markets Live – normal service resumes
Fully refreshed after a two-week break in the French sunshine, FT Alphaville’s fast-paced, interactive markets chat returns on Monday morning.
Under discussion today, the renewed market slide, the plight of the UK banks,
Ackermann unplugged
RTRS – SOME BANKS WOULD NOT SURVIVE HAVING TO REVALUE ALL SOVEREIGN DEBT AT MARKET LEVELS – SPEECH TEXT.
A statement of the obvious you might think. But what makes the above interesting is the source:
A return to asset purchases (in the UK)
We are a bit late to this, but here are selected highlights from Goldman Sachs prediction on Friday of further asset purchases by the Bank of England.
But this time Goldman economist Kevin Daly reckons there’s a good case for the BoE focusing on credit easing rather than the purchase of more gilts.
Curious crisis meeting du jour
Scheduled for Tuesday actually:
That’s South Korea’s financial regulator announcing a conference call with Chinese and Japanese peers, regarding (if we translate it right) “American and European financial health”
Un petit funding problème, illustrated
A fortnight is a long time in short-term credit markets.
Reports of US money market funds pulling out of European banks in July abounded last month – and French banks appear to be particularly vulnerable due to their relatively high reliance on short-term funds and lower deposit ratios.
Further reading
Elsewhere on Monday,
- Once upon a time, in a Chinese forest far, far away…
- An excruciatingly long list of big lawsuits against US banks.
- Four per cent inflation, easier said than done.
- ‘The worst possible idea,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Time to be bold, Mr President
Barack Obama needs to be bold – but not in the way his party would like, writes the FT’s chief Washington commentator.
Snap news
Breaking pre-market news on Monday,
- Rio Tinto and Anglo American to sell Palabora Mining shares –statement and statement.
- Alexon says in discussions on possible offer, warns on profit –statement.
FTfm on AV
Some highlights from Monday’s FTfm.
US managers are winning fight for European market share
US managers accounted for 70% of estimated net sales in the first six months of the year in Europe compared to just 40% in 2010.
Further further reading
For the commute home, and we wish our American readers a great long weekend,
- Activities people are planning for Labor Day weekend.
- The Deal Professor on Groupon feelin’ the noise.
- Greg Ip is always worth reading on the jobs numbers (everything else too).
The Weekender
This week on FT Alphaville,
- Bill Gross had something to say.
- We took a really close look at a US money market fund.
- “God” seemed to come out in favour of austerity.
- Greek banks posted some strange results.
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
BofA’s Merrill Lynch ETF
Warren Buffett’s Bank of America warrants are perilously close to out-of-the-money territory on Friday.
Shares in everyone’s favourite lawsuit piñata were trading at $7.22 (down 8.72 per cent) at pixel time.
How to serve front-end yields up with a Twist
The chatter on Friday in response to the stomach-punching payrolls is that we’re headed for Operation Twist Part Deux — number 13 on our list of Fantasy Fed options — though not outright QE3 in the form of large scale asset purchases.
Goldman’s doom-mongering eye-bleeding slide deck
On Thursday the Wall Street Journal reported on a doom-laden research note by Goldman Sachs strategist Alan Brazil sent on August 16 to hedge fund clients.
Unfortunately it didn’t share the report, but Zero Hedge has acquired a copy and it makes for interesting reading,
Commenting on FT Alphaville – a quick Q&A
Commenting on FT Alphaville is still fun, we promise. But the way it’s done has changed.
On Tuesday, August 30, the FT introduced a new policy that affects FT Alphaville commenters.
Prior to the change,
Beware of low-flying bund yields
Did you know? 10-year bund yields just fell to a record low of 2 per cent. As the below chart from German financial consultant Achim Duebel points out — it’s very much a changed trading world:
Liquidity lessons
Two pertinent ones, via London Banker:
Liquidity means you can generate cash from a physical asset or paper claim.
If you can’t exchange the asset for a major currency to meet a sudden funding need,
US Markets Live transcript 2 Sep 2011
Markets Live chat transcript for the chat ending at 15:06 on 2 Sep 2011. Participants in this chat were: Cardiff Garcia John McDermott, FT Izabella Kaminska Tracy Alloway Joseph Cotterill, FT CGMorning!
In memoriam – Tracy Alloway, an FT Alphaville competition
Our colleague and friend Tracy Alloway is leaving us on Monday to take up the role of FT capital markets correspondent.
It’s okay, we’re sad, too.
But this wouldn’t be an FT Alphaville send-off without everyone getting horribly drunk a competition.
US government attempts bank raid
Friday promises to be an ugly day for US financials:
Stories in the New York Times the Wall Street Journal on Friday suggest that a grand mortgage settlement is farther away than ever and that banks — or at least one bank (guess which!) — are coming under increasing pressure to prepare for the worst.
Payrolls: zero net new jobs added, unemployment rate flat
The fears were valid, it seems.
Nonfarm payrolls stayed exactly flat in August — a month in which the drumbeat of negative economic signals was amplified to piercing levels.
Instant market reaction:
Jedi Kocherlakota on the ways of the FOMC force
As FT Alphaville noted before, the role of the FOMC is about more than just conducting monetary operations. It’s also about moulding investor opinion and expectation.
So, when traditional monetary tools of the Federal Reserve dry up,
Greek execution risk, and the bond swap
With Greece “pausing” IMF talks and admitting that this year the budget deficit will be bigger and growth smaller…
…this is probably a bad time to note that the economics behind the Greek bond swap assumed something very different only recently.
Is God a fan of austerity?
Erm, OK, not God. Not even the Pope — although an editorial in L’Osservatore Romano by the Pope’s banker comes close:
During a prolonged crisis, inheritance taxes, new forms of taxation or similar alternatives reduce or wipe out resources for investments,
Hooray for, erm, Greek ELA?
Things you might not have noticed in recent Greek bank results:
Eurobank EFG ability to generate recurring profits is reflected in pre provision income, which amounted to €749m in 1H2011 or €324m in 2Q2011,
Further reading
Elsewhere on Friday,
- That FHFA lawsuit: goodbye to those settlements?
- Not that the banks actually remember them.
- Rats decide sinking ship no longer a strategic priority.
- Reinsurance and the century of risk.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Get used to world without ‘risk free’ rate
Earlier this week, I pointed out in a column that the cost of insuring the US government against default in the credit derivatives markets is now higher than for many major companies,