October, 2011
Further further reading
For the commute home,
- A day in the life of Rajat Gupta.
- What happened to productivity and welfare after the 2001 Argentine crisis.
- New Rajan paper on sovereign debt and government myopia.
MF Global and the repo-to-maturity trade
If ever there was an example of an “overnight repo Black Swan” event, MF Global’s “repo-to-maturity” laddered trades seem to be it. Though, in this case, they’re probably better described as the realisation of the “short-term repo Black Swan”.
Who lost Greece?
Did someone forget to ask Papandreou what Greece thinks of the new eurozone deal? The Greek Prime Minister said on Monday that “we trust citizens” — and we’re about to find out what that means. From Reuters:
G4SISS RIP
Is this the final nail in the coffin for the G4s/ISS deal?
Statement from Harris Associates.
In a word, yes.
Harris (4.9 per cent) is the third biggest shareholder in G4s and it’s difficult (in fact almost impossible) to see the highly ambitious £5.2bn deal being voted through at Wednesday’s EGM without the support of the influential Herro.
Work out where the money is with these handy EFSF guides
RBC Capital Markets has busted out the PowerPoint to depict the two ways EFSF could achieve the “several fold” leverage pledged last week by European leaders in Brussels. They may come in handy as you prepare to jet off to this week’s G20 summit in Cannes.
Citi: EM rate cutters sheathed
If you were expecting widespread easing of policy rates across the emerging world, think again.
Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing,
Greed and fear with Bob the Bear
And now for something completely different.
In his latest note to clients, Nomura’s Bob Janjuah goes all technical:
In terms of the secular outlook, I wanted to do something different, so I have included below a classic Greed &
MF Global files for bankruptcy
There’s to be no last-minute deal to salvage MF Global: the futures brokerage and sometime European debt specialists filed for bankruptcy on Monday in New York. Click through to access the filing (H/T John Carney):
Through the looking glass, (another) markets edition
Several commentators have in recent days drawn attention to the extremely overbought market.
Cullen Roche at Pragmatic Capitalism, for example, notes that 95 per cent of the S&P 500 is trading above its 50-day moving average.
A historian’s view of the UK stock market
FT Alphaville has a soft spot for historians.
Not only because of their services to tweed and elbow patches, but also because they offer refreshingly long-term views (a welcome change from the short-termism of many market commentators).
NY Fed suspends MF Global business [updated]
Statement Regarding MF Global, Inc.
The Federal Reserve Bank of New York has informed MF Global Inc. that it has been suspended from conducting new business with the New York Fed. This suspension will continue until MF Global establishes,
Sovereign CDS index – it’s alive!!
Either that, or credit indices with Western European sovereigns are in the process of dying, depending on one’s views of the consequences of CDS on Greece not triggering (yet) and the naked short ban.
In any case,
E*C*B
WE DON’T KNOW WHAT THIS MEANS:
Hat-tip James Mackintosh. It appears on page 8 of the FT’s UK print edition. It’s like one of them Renaissance allegory paintings… although we’re not sure what connection this all has to LLeju Productions,
Markets Live transcript 31 Oct 2011
Markets Live chat transcript for the chat ending at 12:27 on 31 Oct 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT
NHHola rabble
NHwelcome to Markets Live
Qantas flies the unfriendly skies
The dramatic decision by Qantas to ground its fleet on Saturday has ended well, so far — for passengers, at least.
The national workplace relations tribunal, Fair Work Australia, convened over the weekend and in the early hours of Monday morning gave Qantas what it was seeking:
The ECB is not here to save the world — redux
Weirdly, the ECB does seem to be here to play chicken with Silvio Berlusconi, though:
That’s the only reason we can give for Italian 10-year bonds yielding 6.1 per cent on Monday. The debt last reached this level before ECB intervention began in August.
Emergency repairs at Homeserve
Oh what fun, another UK mis-selling scandal. Only don’t call it that because what’s been going on at Homeserve, the UK’s leading home emergency insurance provider, is something different… apparently.
Inter-yention — it’s back
After the Japanese yen hit a record high of ¥75.311 against the dollar on Monday morning, the BoJ/Japanese government jumped in, selling an unspecified amount of yen which brought its valuation down about 5 per cent against the dollar and 4 per cent against the euro:
Further reading
Elsewhere on Monday,
- How CCPs really work.
- China has little choice about where it invests its reserves.
- If CDS is broken, who suffers?
- It’s yen intervention time (again).
- How fast is fast enough?
- Sovereign bond holdings are not the reason for recent bank stress.
Pink picks
Comment, analysis, and other offerings from Monday’s FT,
David Cameron: A three-pronged plan to revive Britain’s economy
I am confident that we can both resolve the crises at hand and come through them with an economy that is stronger and fundamentally fairer,
The minutes tick away for MF Global [updated]
[Update: WSJ is saying MF Global is close to filing for chapter 11 bankruptcy protection as soon as Monday, and to selling its assets to Interactive Brokers. A little earlier, the FT earlier reported Interactive
FTfm on AV
Some highlights from Monday’s FTfm.
UAE may force pensions on expats
The UAE is hoping to set up a pensions scheme for expatriates who make up more than 90 per cent of its 8m-plus population. The scheme would represent a huge opportunity for international asset managers and local stock exchanges.
The Weekender
This week on FT Alphaville,
- Many questions remained after a late night in Brussels…
- … which we tried to answer using bank recap history.
- Merrill Lynch’s derivatives set sail for safe harbors.
Further further reading
For the commute home, have a nice weekend,
- Transatlantic cable to Shave 5 Milliseconds off Stock Trades.
- Norman Davies, FT Alphaville’s favourite historian, on Europe’s vanished states.
- Fascinating new details on the migration patterns of Americans.
China to Europe: that’s a sure nice EFSF you have there
The EFSF roadshow is in Asia trying to drum up interest in the newly leveraged, newly insured, revamped fund. The Chinese are counting their chips and considering whether to double down on their European bet.
Another reason the Fed might buy MBS
If you’ve been following reports of what might happen at next week’s FOMC’s meeting, you probably know that the Fed is contemplating further purchases of agency mortgage-backed securities.
And there are least two,
MF Global flies too close the sun
Pity there isn’t a bond that pays out if MF Global leaves Jon Corzine.
The brokerage is looking for buyers after a hellish week, reports the FT:
MF Global’s executives were racing to secure a sale of the company as two rating agencies downgraded its credit to “junk”,