September, 2011
Another two worrying notes on US unemployment
As if you needed more.
In this post we’ll stick to the descriptive parts of these notes and leave aside the prescriptive, as the potential efficacy of various monetary loosening measures has been (and will continue to be) debated ad nauseum pretty much everywhere,
UBS rogue trade – Kengeter memo
In which the CEO of UBS’s embattled investment banking arm urges his staff to move “forward forcefully and decisively” and vows to “deal appropriately with those individuals who were responsible for significant operational and management supervision lapses.”
Chinese decoupling, meet Chinese stagflation
This China decoupling thing was never really going to take off, was it?
From Bloomberg:
China’s economy is highly likely to slow next year and efforts to spur growth will be constrained by inflation and government debt burdens,
Creative ways to avoid exposure to LNG cost blowouts
Despite the prospects of entering a golden age for natural gas, investors are looking decidedly less excited about LNG.
Australia is set to take over Qatar as the biggest exporter of LNG within the next decade or so.
Markets Live transcript 19 Sep 2011
Markets Live chat transcript for the chat ending at 11:13 on 19 Sep 2011. Participants in this chat were: Bryce Elder/FT Neil Hume, FT BEHello! BESorry – appallingly late today.
Breaking on FedWire…
This is getting ridiculous.
At this rate there won’t be any point logging on to read the FOMC minutes on Wednesday evening. FedWire, the unofficial/official news service of the Federal Reserve, has done such a comprehensive briefing the market on what to expect that there can’t possibly be any surprises…
Secret suitors outed
Aren’t these new UK Takeover Panel rules fun?
On Monday morning we’ve been treated to the sight of several companies being forced to reveal more about the takeover offers they have received.
For example
Merchant Securities:
I spy $5.8bn of SPY settlement fails
SPY is industry shorthand for the SPDR S&P 500 — until very recently the world’s largest ETF by market capitalisation.
Though don’t let that mislead you; it’s still number two in the grand scheme of things,
Wheel comes off Webvan 2.0
No wonder analysts have been slashing forecasts. Monday’s trading update from the internet grocer — or Waitrose distribution arm as it is also known — reveals there has been no improvement in sales in the last quarter.
European repo turns to Japan
The latest European repo council survey is out, and some interesting new trends have been detected.
For example, since the last survey was taken in December 2010:
Dollar-denominated repo has fallen to make up 16 per cent of the market,
Further reading
Elsewhere on Monday,
- Where was the Fed?
- So there, Geithner.
- Zing! Synthetic eurobonds.
- It’s not fair, but what are the alternatives?
- Get ready for commodity position limits.
- Unemployment-related riots in the US. Get ready for them,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Lawrence Summers: The world must insist that Europe act
In his celebrated essay The Quagmire Myth and the Stalemate Machine, published in 1972,
Snap news
Breaking pre-market news on Monday,
- Lloyds Banking Group loses its finance director to Resolution — statement and statement.
- Ocado reports Q3 sales growth of just 17 per cent and says Q4 running at the same level — statement.
UBS rogue trade – details of the fictitious trades
Sunday’s statement from UBS, in which the bank reveals the loss from ‘unauthorized’ trading in various index futures (over the last three months) was in fact $2.3bn.
On September 15, 2011 UBS announced that it had discovered unauthorized trading in its Investment Bank.
FTfm on AV
Some highlights from Monday’s FTfm.
Cash pipeline to aid bank funding
A new electronic trading platform could help funnel more wholesale funding to Europe’s beleaguered banking sector and provide higher returns to lenders such as companies and asset managers.
[Something for the weekend] Just what Dr Vickers ordered
Sir John Vickers is laughing all the way to the bank(ing commission). As a movie plot, the publication of his report, immediately followed by a spectacular demonstration of why we needed it, is much too far-fetched.
The Weekender
This week on FT Alphaville, starting with a roundup of our UBS coverage in chronological order…
- The first alerts.
- Initial cost estimates.
- Grübel sends a note to his employees.
- Identity revealed.
UBS trading losses – the regulatory response
Notice anything unusual about this press release hot off the regulatory press?
UBS trading losses: FSA and FINMA to launch investigation
The Financial Services Authority (FSA) and the Swiss Financial Market Supervisory Authority (FINMA) are launching a comprehensive independent investigation into the events surrounding the trading losses incurred by UBS AG in its London operations.
An experiment in Delta None
Just as correlation does not imply causation, this post should not imply usefulness. Consider it a bit of light frippery at the end of a rather challenging week for symmetrical trading.
Here’s how it works.
US Markets Live transcript 16 Sep 2011
Markets Live chat transcript for the chat ending at 15:19 on 16 Sep 2011. Participants in this chat were: Cardiff Garcia Joseph Cotterill, FT Izabella Kaminska Neil Hume, FT CGHello!
Rogue island
Madeira, a scenic archipelago of 267,000 people, crashed into the Portuguese mainland on Friday, scattering shards of new sovereign liabilities…
…Experts estimated the damage reached at least 0.3 per cent of the country’s GDP.
Charges in UBS trader case
City of London police statement:
At 12.56hrs (September 16) the CPS authorised the charging of Kwaku Adoboli, from Bethnal Green. City of London Police has since charged the 31-year-old with fraud by abuse of position and false accounting.
Reminder: US Markets Live today at 10am New York, 3pm London
You know where to find us.
Rogue blogger John McDermott continues his trek through the Colombian hinterlands, but stepping in will be our very own Alpha One desk of Izabella Kaminska, Neil Hume, and Joseph Cotterill.
Something for the ETF lobby to chew on
Exchange Traded Funds are being mis-sold to the retail market and the risk of running, constructing, trading and holding them are not sufficiently understood by the market or the banks that create them.
Markets Live transcript 16 Sep 2011
Markets Live chat transcript for the chat ending at 11:26 on 16 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHGood morning rabble NHand welcome to Markets Live
Gulf Keystone plots $200m fund raising
Earlier this week Gulf Keystone Petroleum – the next super major oil company – spelled out its plans for the future.
The highlights were a move to the main market of the London stock exchange from Aim and a plan to develop a pipeline capable of carrying 440,000 barrels a day north from its Shaikan field to the Kirkuk-Ceyhan export pipeline.
Beware the market spam
In light of the news that Goldman Sachs’ Global Alpha — le quant fund extraordinaire – has started “liquidating” its holdings, and that other algorithmically minded unwinds have probably been stalking the markets,
The pre-conditions for a double-dip
Fed tightening, apparently.
(Not that there are a lot of examples to go on.)
This is from Spyros Andreopoulos at Morgan Stanley. He sifts through all the slowdowns — defined as two successive quarters of growth not exceeding 1 per cent — recorded since 1950.
Further reading
Elsewhere on Friday,
- “Rogue trader, my ass!”
- Citigroup revelation du jour.
- In praise of Ray Dalio.
- The maddening sticky wages problem.
- Drowning in bank data.
- Decline watch,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: This $2bn mess has uncanny historical echoes
In May, I wrote a column that warned that the fast-growing world of exchange traded funds was heading for a scandal,