September, 2011
Pink picks
Comment, analysis, and other offerings from Tuesday’s FT,
Big audit firms face Brussels onslaught
The business model of the Big Four accounting firms is under attack from the European Commission,
Snap news
Breaking pre-market news on Tuesday,
- Eurozone officials working on sovereign debt TARP for Europe — report.
- UBS committed to keeping US brokerage — report.
- Daily Mail & General Trusts warns full year profits will be at the low end of expectations — statement.
Further further reading
For the commute home,
- The fiscal multiplier revisited.
- Peter Orszag’s “useless advice”. And a defense of what Orszag wrote, which was more about automaticity than about democracy.
- Rogue trading scandal at UBS gets the Special Report treatment from Reuters.
The case for GDI: a Q&A with Jeremy Nalewaik
Here’s one for the methodology nerds.
Jeremy Nalewaik is a staff economist at the Federal Reserve who specialises in macroeconomic statistics. His name first came to our attention earlier this year when we read this post at Freakonomics by Justin Wolfers,
US banks take the sitting duck test
The duck test is a paradigm of inductive reasoning. If, as Douglas Adams chirpily wrote, “it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands.”
Was Twist an “Anti-Stimulus”?
To our inbox this morning came a note from RBC arguing that the FOMC statement last week acted as a kind of “Anti-Stimulus”.
Here’s the explanation:
But perhaps the bigger problem is not that what the Fed has done “won’t work” but rather the potential perception that the Fed’s latest action could actually prove to be an anti-stimulus.
Let them eat EFSF equity tranches?
Rather than start directly with the weekend rumour of using the European Central Bank to “leverage” the EFSF…
… instead we’ll start what the ECB has done with the current Greek bond swap (these are answers to questions from the official bond swap website):
Gold and other currencies
It won’t be of any consolation to those stopped out during Monday’s wild trading, but the gold price is still underpinned by two very powerful pillars, reckons Capital Economics.
They are: the outlook for monetary policy – i.e.
The Buffett bottom
Maybe “looking on as your shares break under $100,000″ is the new “having an idea in the bath”…
Berkshire Hathaway Authorizes Repurchase Program
OMAHA, Neb.–(BUSINESS WIRE)–Berkshire Hathaway Inc.
Counting the copper collateral cost
It’s hard not to wonder what the role of Chinese copper-as-collateral has to do with it?
From Standard Bank’s Leon Westgate, on Monday:
The SHFE copper market traded limit down again this morning,
Markets Live transcript 26 Sep 2011
Markets Live chat transcript for the chat ending at 11:28 on 26 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola NHBonjour NHWelcome
Six weeks to save the eurozone
There might have been nothing concrete from the IMF meeting in Washington over the weekend, but the outline of a plan to rescue the Eurozone and its banks was sketched out.
- There would be a haircut or writedown of Greek sovereign debt of 50 per cent.
Don’t blame us for the Great British Krona
Please, please, please don’t accuse the Bank of England of getting involved in currency wars.
It hasn’t deliberately deflated the Great British Krona Sterling in the past couple of years. In fact, monetary policy has has nothing,
Bove vs Bloomberg
Does Rochdale Research’s Richard X. Bove have a slight axe to grind against Bloomberg or something? We ask the question because his latest note has just landed in our inbox. (H/T Tracy Alloway)
It’s an extraordinary rant about this week’s Bloomberg BusinessWeek editorial:
Retour au futur, le rumeur de French bank recap
French banks rallying on Monday:
Not hard to see the weekend’s trigger. As Bloomberg describes it:
The Journal du Dimanche reported Ramon Fernandez, head of the French Treasury, met with the heads of BNP Paribas (BNP) SA, Societe Generale (GLE) SA, Credit Agricole SA (ACA),
Further reading
Elsewhere on Monday,
- Emerging global risks in handy/scary map form.
- The price of gold in the year 2160 (give or take a century).
- YOU ARE BEING LIED TO (by the yield curve).
- You may happen to care about this.
Pink picks
Comment, analysis, and other offerings from Monday’s FT,
Wolfgang Munchau: Zero hour for the euro
The world’s inability to shake off the economic downturn and contagion in Italy has changed the nature of the eurozone crisis, writes FT columnist Wolfgang Munchau.
Snap news
Breaking pre-market news on Monday,
- Aberdeen Asset Management says it has seen some slowing of gross inflows — statement.
- Warren Buffett increases stake in Tesco – report.
- Alere changes acceptance level to 50 per cent on Axis-Shield bid — statement and statement.
Thank you and goodnight – Grübel’s final address
Dear colleagues,
I have handed in my resignation as CEO to the Board of Directors today. That it was possible for one of our traders in London to inflict a multi-billion loss on our bank through unauthorized trading shocked me,
FTfm on AV
Some highlights from Monday’s FTfm.
ETF sector braces for draconian clampdown
Providers of synthetic ETFs are bracing themselves for a draconian clampdown by regulators following reports that an ETF trader was allegedly involved in a $2.3bn trading scandal at UBS
Enquiry starting into ‘empty voting’
The practice of borrowing shares to vote at AGMs is becoming a governance issue,
[Something for the weekend] Alliance… I’m not sure about this
– By Neil Collins –
I’m a shareholder in Alliance Trust. Its subsidiary, Alliance Trust Savings, is home to my (substantial) SIPP. The service from ATS is simple, cheap and exemplary, and I’d recommend it.
The weekender
This week on FT Alphaville,
- We introduced you to the world’s institutional investors.
- RBS calls a recession in Europe.
- Italian bonds started trading as risk assets.
- And reached the outer limits.
Strange days for goldbuggers
A bloodbath for gold this week but especially today, when it was off more than $100 at its lowest point before rallying a bit:
Reuters analyst John kemp pointed out earlier in the day that this is more than a four-standard deviation move:
Meet the institutional investors
The end-users, the clients, the buyside. Or in more standard parlance – institutional investors. Not “buyside” like hedge fund — more like your pension fund, insurance companies, reserve managers, sovereign wealth funds,
Leveraged ETFs: not for retail investors
FT.com reporter Jason Abbruzzese submits this guest post for FT Alphaville.
These things always seem to start with the best intentions.
Leveraged ETFs are becoming an industry whipping boy,
US Markets Live transcript 23 Sep 2011
Markets Live chat transcript for the chat ending at 15:23 on 23 Sep 2011. Participants in this chat were: Cardiff Garcia Joseph Cotterill, FT LSPollack Paul Murphy CGSo that went well
It still all depends on the humble Greek depositor
There’s been plenty of comment, and prodding, about how European politicians need to man (and woman) up, bite the bullet, and start acting with conviction. After all, with every passing day, the price tag rises as the level of distress increases and lack of growth butts up against austerity measures.
Gold, puking, and vodka
“Liquidation” seems to be the word here…
Seems clear that the unwinding of gold longs is crashing into equities longs on Friday. Though it’s also worth standing back and looking at commodities leading sovereign credit — such as Russia and crude,
Markets Live transcript 23 Sep 2011
Markets Live chat transcript for the chat ending at 11:25 on 23 Sep 2011. Participants in this chat were: Bryce Elder/FT Joseph Cotterill, FT Paul Murphy
BEGood morning
BEAnd welcome to Markets Live