September, 2011
Knife-catching – The Director’s Cut
Following Monday’s disappointing trading update, Ocado chairman Michael Grade waded into the market and bought stock.
And it’s been downhill ever since.
In fact to bring things bang up to date,
Blood and iron (ore)
It was only a couple of months ago that Vale was talking up iron ore prices out to 2015 and beyond, and analysts were saying the discount being applied to company shares on expectations of a glut were too steep.
BoE MPC minutes – market reaction and comment
The Great British Krona has taken a knock following the publication of the September MPC minutes.
For context, that’s an 8-month low against the dollar.
And so to the comment.
Nomura’s economics team focus on the difficult PR task that faces the Bank:
Markets Live transcript 21 Sep 2011
Markets Live chat transcript for the chat ending at 11:22 on 21 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola NHWelcome to Markets Live
UK QE2 coming down the slipway
The minutes of the Septmeber’s MPC meeting are out and …
-BOE – DECISION ON QE IN SEPTEMBER WAS FINELY BALANCED FOR MOST MPC MEMBERS
- BOE – FOR SOME MEMBERS, CONTINUATION OF TRENDS SEEN IN AUGUST WOULD BE ENOUGH TO JUSTIFY MORE QE
- BOE- MPC DISCUSSED OTHER OPTIONS TO EASE IF NEEDED,
Webvan faces Tesco price offensive
More bad news for our favourite internet grocer – that’s Webvan2.0 Ocado in case you hadn’t already guessed.
Tesco is about to start a price war.
From Retail Week:
Speculation is mounting that grocery and general merchandise giant Tesco is preparing to launch a price offensive next week,
Brooding over Gruebel
“Oswald Grübel has been asked to leave,” a source close to the UBS board has told Bilan. “The discussion has now turned to possible successors. Once a decision is made, the departure of the CEO will be announced.”
Italy, Lebanon, and the sovereign outer limits
Something’s wrong with this picture… (chart via Exotix):
(An older version of the same chart from Exotix can be found here)
It’s Italy, whose government bonds trade with a wider zero-volatility spread to Lebanon,
Further reading
Elsewhere on Wednesday,
- That Republican letter to the Fed.
- Guinea pigs and Swiss repo.
- Fear of passive tightening.
- Fixing securitisation, a SEC start.
- The real solar crisis is in China…
Pink picks
Comment, analysis and other offerings in Wednesday’s FT,
Martin Wolf: Why breaking up is so hard to do
Members of the eurozone are suffering from a severe bout of buyers’ remorse, writes Wolf.
Snap news
Breaking pre-market news on Wednesday,
- Lloyds of London announces half year loss before tax of £697m — statement.
- Inditex half year profits beat expectations — statement.
- Philip Richards and Michael Alen-Buckley will invest $30m in Rab Special Situations Fund — statement.
Further further reading
For the commute home,
- The staggering cost of patent trolls.
- Europe can expand the EFSF even without the approval of every member… or maybe it can’t.
- The short case for ignoring Dan Yergin on oil prices,
Credit Suisse on where the market has mispriced Twist
Operation Twist is mostly priced in at this point, but has the market priced it correctly?
Credit Suisse have a short note saying that markets have overestimated the amount of purchases that will head to the longer end of the curve when the Fed sells from its front-end bucket…
Credit profiles up and down
Here’s a breakdown from a recent Moody’s report showing which corporate sectors have improved balance sheets since the end of the last recession:
The report is titled The Great Credit Shift, and it explains how some sectors have solidified their credit profiles…
Margin squeeze… rally?
The idea that the corporate profit train will have to crash, or at least slow down, in the not too distant future has been percolating for a while now.
The combination of company cost-cutting and policy-driven demand,
Silent SNB hypnosis
As rumours swirl in the market of a Swiss National Bank press conference later on Tuesday (the SNB said it had no comment)…
… Deutsche Bank’s Alan Ruskin chimes in with some advice for Philipp Hildebrand:
Markets Live FOMC edition — Wednesday at 2pm NY, 7pm London
Much of the suspense about tomorrow’s FOMC announcement, set to be released at 2:15pm EST, has already been removed. At this point the unknowns are issues of form rather than timing.
Operation Twist Part Deux is on the agenda and possibly also a reduction in IOER.
More deal-making with Nat
We’ve debated before why big investors have given Nat Rothschild’s Bumi Plc (née Vallar Resources) a wide berth.
The company blames the fact that it’s not indexed. We’d say it’s also down to the sheer complexity of its corporate structure and deal-making activity.
Increasing Macroeconomic Fright
Title of the IMF’s World Economic Outlook, September 2010:
Recovery, Risk & Rebalancing
The title of the September 2011 edition (just out at pixel time)…
Slowing Growth, Rising Risks
It’s generally
Europe’s fragmented ETF settlement system
A fundamental challenge when trying to understand what’s going on in the world of exchange traded funds is that no generalisations can be made.
Not only is every ETF structured differently — it can depend on the asset classes it tracks or which provider it’s issued by — there are also major differences related to the markets they trade in.
Markets Live transcript 20 Sep 2011
Markets Live chat transcript for the chat ending at 11:35 on 20 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola Rabble NHwelcome to Markets Live
Siemens in knots
Oh no no, of course we didn’t take cash out of a French bank!
RTRS-SIEMENS BANK SAYS FT REPORT THAT IT TOOK MONEY OUT OF FRENCH BANK AND DEPOSITED IT WITH ECB IS FACTUALLY NOT CORRECT
Oh, er, maybe we did or maybe we didn’t!
RTRS-SIEMENS GROUP SPOKESMAN DECLINES TO COMMENT ON FT REPORT THAT COMPANY SHIFTED FUNDS FROM FRENCH BANK TO ECB
Oh,
Preparing the slipway for QE2
And so, the softening up process begins.
Surely that’s the only way to read Monday’s Quarterly Bulletin from the Bank of England, which featured the following article on QE.
(emphasis ours)
Between March 2009 and January 2010,
Further reading
Elsewhere on Tuesday,
This time is different: 1970s inflation version.
The flight of the depositors, in remembrance of WaMu.
Mission: Impossible, moving from the back to the front office in the future.
Pink picks
Comment, analysis and other offerings in Tuesday’s FT,
Gideon Rachman: The single currency’s true fatal flaw
If you want to understand why the euro is in such trouble forget, for a moment, debt and sovereign bonds – and take a look at the bank notes,
Snap news
Breaking pre-market news on Tuesday,
- Bank of China halts FX swaps with European banks — report.
- Debenhams says full year profits will be ahead of expectations — statement.
- Gulf Keystone Petroleum raises $200m via equity issue priced at 140p a share — statement.
S&P downgrades Italy
Una sgradita sorpresa:
On Sept. 19, 2011, Standard & Poor’s Ratings Services lowered its unsolicited long- and short-term sovereign credit ratings on the Republic of Italy to ‘A/A-1′ from ‘A+/A-1+’.
Further further reading
For the commute home,
- What happened on that phone call between Venizelos and the Troika.
- A sorry story of American trade.
- Why we’re in the dark about the mortgage market.
- The SEC aims to end conflicts of interest in securitisation deals.
Markets vs UMich on inflation expectations
On Friday there was an intra-Economist discussion between Free Exchange and Buttonwood about inflation expectations, a topic that’s an old favourite of ours.
At issue was Buttonwood’s use of the latest University of Michigan consumer sentiment survey to argue that inflation expectations have been climbing in the US.
Operation sovereign debt net
From the ivory tower of academia has come a novel idea: why not just net away all those troublesome debt exposures?
For example, say Spain held Irish debt to the tune of €12bn and Ireland held €20bn of Spanish debt,