October, 2011
Why sterling just got splattered
Impressive move following the Bank of England rebooting QE…
Some immediate reaction from Alan Ruskin of Deutsche Bank:
A few things stand-out immediately on BOE QE decision to do extra 75bn, which was more than the market expected,
Four months of UK QE
But not for Christmas! From the Asset Purchase Facility’s market notice for the BoE’s £75bn of further quantitative easing:
Asset Purchase Facility: Gilt Purchases
1. The MPC has decided on a further £75bn of gilt purchases as part of its programme of asset purchases financed by central bank reserves.
Bank of England restarts QE
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to increase the size of its asset purchase programme,
Markets Live transcript 6 Oct 2011
Markets Live chat transcript for the chat ending at 11:35 on 6 Oct 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT pastit2 NHHola rabble NHWelcome to Markets Live
Something for the EBA
A stress test calculator.
Have a play around. It’s fun and kinda scary.
Markets Live – JCT special
I would like very much to hear some congratulations for this institution, which has delivered price stability in Germany over almost 13 years at approximately 1.55% – as the yearly average of inflation – we will recalculate the figure to the second decimal.
The end of the beginning?
Have Eurozone policy makers finally got it?
The signs are certainly encouraging, says Citigroup.
… in the last 2 weeks we have moved from not being sure that Europe was coordinated enough and didn’t ‘get’ it &
LCH.Clearnet to accept gold as collateral
First there was cash for gold. Then there were commodity exchange positions for gold. Now, thanks to LCH.Clearnet’s move to accept gold as collateral by the end of October investors will be able to take any leveraged stock position (or range of other OTC market positions) for gold.
Commodities become more… benign
As these graphs illustrate, although it’s 2008 all over again in equities, history is not repeating itself in the commodities markets:
The charts are from a note by BarCap looking at why commodities are no longer a safe haven in these volatile times.
Further reading
Elsewhere on Thursday,
- It’s the end of the fake recovery.
- Navigating volatility.
- Introducing a land peg.
- The ‘Kerviboli’ twins.
- MMT the movie.
- Are robot lawyers the future?
- Steve Jobs 1955-2011.
Pink picks
Comment, analysis, and other offerings from Thursday’s FT,
Obituary: Steve Jobs, technological visionary who reshaped the world
Steve Jobs stamped his mark on more than 35 years of personal computing history,
Snap news
Breaking pre-market news on Thursday,
- TNT Express warns of tough Q3 — statement.
- Axis-Shield recommends improved offer of 470p a share from Alere — statement.
- F&C Asset Management says CEO to retire;
Steve Jobs has passed away
A statement from the Apple board (picture above via the Apple home page at pixel time):
CUPERTINO, Calif.–(BUSINESS WIRE)–We are deeply saddened to announce that Steve Jobs passed away today.
Steve’s brilliance,
Further further reading
For the commute home,
- How well do financial markets separate news from noise: a case study.
- Your reaction to this headline might say something about your ideology.
- Why more Americans are bringing their work home.
The mystery of US banks’ European exposure
This might just be the most important piece of paper in US banking right now:
FFIEC 009 is the form US banks send to regulators about their exposure to Europe (sovereigns and corporates) and it provides the basis for many of the estimates of vulnerability.
Commodities and currencies won’t save you(r earnings)
It requires a bit of head-tilting, but this chart from UBS is worth a look given the advent of third quarter earnings season in the US:
According to the estimates UBS has pieced together, roughly two-thirds of revenue growth for companies in the S&P 500 in the second quarter was down to commodities price swings and a combination of the weaker dollar and non-US sales growth.
YahooSoft, a match made in 1997 heaven
It’s 2:59am and there’s nobody else left unpaired on the dancefloor:
Wednesday, October 05, 2011 2:45:37 PM RTRS – EXCLUSIVE-MICROSOFT CORP MSFT.O IS CONSIDERING A BID FOR YAHOO INC YHOO.O -SOURCES MSFT.O SILAK.UL YHOO.O
The resulting action:
Nomura: Trichet to deny Europe a fun going-away present
Or, why this letter is likely to make its way quickly into the recycling bin.
Just a couple of weeks ago, the conventional wisdom was still for a 50bps rate cut at Thursday’s ECB meeting — Jean-Claude Trichet’s last as ECB president — in light of rising expectations rise of an eurozone recession.
UBS trade execution(s)
RTRS-UBS SAYS LEADERSHIP CHANGE IN UBS INVESTMENT BANK’S GLOBAL EQUITIES BUSINESS
RTRS-UBS SAYS FRANCOIS GOUWS, YASSINE BOUHARA, CO-HEADS OF GLOBAL EQUITIES, RESIGNED FOLLOWING RECENT UNAUTHORIZED TRADING
IMF SPV — splatted
IMF European director Antonio Borges sallies forth to fix Europe’s sovereign debt crisis once mo — oh, hang on, oops:
Let me be clear about some earlier comments I made
The rest of it… is quite painful:
Recaps of banks vs recoveries on sovereigns
There’s something important missing from this recent Goldman call: (from a note earlier in the week)
We are not convinced that an effective ring-fence [for bank capital from a Greek default] is a realistic concept.
Bumi and the Bakrie Brothers
Is there any more Bumi Resources can do to make itself uninvestable to the average UK institutional investor?
It seems there is, albeit indirectly.
Wednesday’s announcement from Nat Rothschild’s company within a company,
Quantum leap: EuroTARP
The FT’s report yesterday that policy makers may finally be getting around to throwing a TARP over European banks has sure got people talking. Will Dexia go down as the unwitting catalyst to addressing the lingering questions around bank solvency? And has the feedback loop between banks and their sovereigns been recognised as the death spiral that it is?
For an overview,
The crisis that was always coming
This looks a bit like how 2012 will turn out, doesn’t it?
European countries are at present locked into a severe recession. As things stand, particularly as the economies of the USA and Japan are also faltering,
Markets Live transcript 5 Oct 2011
Markets Live chat transcript for the chat ending at 11:34 on 5 Oct 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola Rabble NHwelcome to markets live
Compare and contrast – Italy and the UK
First the caveat. The following is written by the chief economist of a big Italian bank. So you can be forgiven for thinking “he would say that, wouldn’t he.”
But Unicredit’s Erik F Nielsen is surely onto something when asks why Italian funding costs are sitting above 5 per cent while investors demand just above 1.6 per cent to lend to the UK government.
The curse of the UK IPO strikes again
Barely six weeks after chief executive Jim French confirmed guidance and described forward tickets sales as encouraging, Flybe, the regional UK airline, has issued another profits warning.
Flybe’s press release:
What makes a reserve currency?
Here’s an interesting way of looking at the market’s current obsession with public debt and reserve currency status.
Consider, for example, that a large amount of public debt is an absolute necessity to ensure a functional monetary system and a reserve currency position.
“But wouldn’t a weak euro be preferable to no euro at all?”
In case you didn’t see the full-page ad placed on page 5 of the print edition of Wednesday’s FT…
Presenting French fund manager Edouard Carmignac’s valedicton to European Central Bank president Jean-Claude Trichet,