November, 2011
The wrong technocrats
I guess you guys have to be creative here.
– Barack Obama to Angela Merkel
Spot the odd one out:
Greek politicians defenestrate George Papandreou. They await a caretaker coalition government to push through tough reforms, ”opening the way for a non-political personality with a strong economic background to serve as interim premier,”
Why Italian sovereign CDS has left the banks behind
In a note on Friday, credit strategists at Citi noted the widening gap between the CDS spreads of European financials and their sovereigns, and went so far with it as to use the D-word: decoupling. Decoupler #1 being Italy,
Markets Live transcript 7 Nov 2011
Markets Live chat transcript for the chat ending at 12:28 on 7 Nov 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHMorning rabble NHwelcome to another week of ML
European equities – trick or treat?
In keeping with the bearish mood this Monday morning, we present selected lowlights from the latest Graham Secker note.
Morgan Stanley’s European strategist has downgraded equities to “underweight” following the double-digit rally,
Italian bond rout [updated]
The restaurants are full, the planes are fully booked and the hotel resorts are fully booked as well.
– Silvio Berlusconi
While in the bond market…
At the other end of the curve, Italy would now pay 5.7 per cent to borrow for twelve months.
Further reading
Elsewhere on Monday,
- FVOAL, verb [F-v-ail]: to buy back bank debt to issue equity.
- Moral perversity, technocracy — and Tim Geithner.
- Good questions on the future of leveraged loans.
- An X-Factor for prediction markets?
- TED takes on counterparty credit risk,
Pink picks
Comment, analysis, and other offerings from Monday’s FT,
Wolfgang Münchau: Summitry again proves its own irrelevance
I would have preferred the G20 summit to tell the eurozone that it needs to solve the crisis on its own,
Snap news
Breaking pre-market news on Monday,
- Ryanair raises full year guidance by 10 per cent — statement and presentation.
- Lenders to Premier Foods agree to defer upcoming covenant test; refinancing talks continue — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Europe’s DC sector set to grow
Europe’s defined contribution pension industry could be set for rapid growth as increasingly unaffordable state provision is scaled back
Greek crisis causes panic in art salesroom
You would think the established,
[Something for the weekend] Let’s have the FTUK index (and the T-shirt)
Goodhart’s Law, as refined, states that when a measure becomes a target, it ceases to be a good measure. Charles Goodhart coined it (the law, rather than anything else) at the Bank of England. At the time the Bank was targetting M3,
The Weekender
This week on FT Alphaville,
- Greece teetered on the brink.
- Italy approached the endgame.
- As its bonds did some funny things.
- But Italians can still save Italy.
- MF Global went bankrupt and we explained how and why.
Further further reading
For the commute home,
- Europe’s insult diplomacy, graphic edition.
- FT Alphaville is a warm refuge of egalitarian brotherhood and we edit each other’s copy. And we’d never do something like this.
Jefferies: for the love of a Greek God, how many times must we explain this?
Jefferies really wants you to know that its net position is “insignificant”.
In a statement released on Friday the broker took the rare step of disclosing not only the size of its dealings with peripheral Europe,
Italian settlement fail penalty, bond sell-off — causation or correlation?
This is the performance in 10-year Italian bonds this year (chart courtesy of Bloomberg):
What’s intriguing, of course, is how the bond yields spiked so suddenly in early July. Almost out of the blue.
What lies beneath the IMF’s (liquid) blanket
At first blush, it looks like a damp squib but probably better than nothing: the G20 agreement managed to foster one agreement of sorts — a new liquidity line (new special drawing rights, so-called SDRs).
Another look back at housing and deleveraging
A question we’ve been pondering lately is just why there’s been such a renewed, intense policy focus on the US housing and mortgage markets in particular.
Or rather what we’ve really been wondering is,
Related party poopers
ENRC could have saved itself $600m and some potential blushes, at least for now.
Instead of asking independent shareholders to vote on a plan to buy the remaining 75 per cent of thermal coal producer Shubarkol from its oligarch founders,
El-Erian: A disappointing G20 communiqué
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, responds to the outcome of the G20 Cannes summit.
______
With a generally underwhelming communiqué, the G20 has missed an important opportunity to address mounting concerns about the dimming prospects for global growth,
G20 defers
Or, alternative headline: World fails to save Italy.
Seems like little has changed from the d(r)aft communique.
Click to read in full:
Choice morsels and Translation:
We stand ready to ensure
Pricing CDS on the EFSF
Euro basket-case trade for sale! Contains more correlation and wrong-way risk than you can shake a stick at.
Be the first on your block to have one!
It’s CDS referencing the EFSF itself, and it’s…
US Markets Live transcript 4 Nov 2011
Markets Live chat transcript for the chat ending at 15:17 on 4 Nov 2011. Participants in this chat were: Cardiff Garcia John McDermott, FT Izabella Kaminska Sid Verma, FT Joseph Cotterill, FT CGOkay people
Come on Buffett, be greedy in fearful Europe
If it costs you millions to spend a couple of hours with the Oracle of Omaha, you could just write him an open letter for free and hope the investment pitch finds its way to him via the power of diffusion.
US Markets Live starts at 10am New York time, 2pm London time
FT Alphaville was invited to spend the weekend in Cannes, relaxing by the pool, stocking up on the latest Parmagiani time-pieces, chilling with our homeboys Silvio and Nico, complaining about the shortage of auteurs this time of year,
Honey, I shrunk Emerging Europe
Eurozone banks selling assets in Emerging Europe – to tart up their capital ratios under crisis pressure – is not front-page news at the moment.
Frankly, we think it should be!
It’s a huge test case.
About that last bastion of health in Europe
Here’s a nice chart showing German new factory orders from Sean Corrigan at Diapason Commodities:
As Corrigan notes to FT Alphaville, orders have now suffered their worst three-month run in post-Reunification times (apart from the 2008 crash).
Non-farm payrolls climbed 80k in October, unemployment falls to 9 per cent
An 80,000 rise in non-farm payrolls is disappointing, but something exorcised the devil from the report’s underlying details, which were better than hoped.
There were big upward revisions to the prior two months,
Dicing with debt, EFSF edition
If the thing set up to borrow for the eurozone can’t borrow then the eurozone is screwed.
That was the lament from the market when the EFSF decided to postpone on Wednesday its ‘no-grow’ €3bn 10 year deal to finance Ireland’s next bailout loan tranche due November 11,
TPG makes it fifteen for Yahoo
Breaking news on Thursday night/Friday morning: TPG Capital enters the fray for Yahoo.
Here’s more from the NYT:
The private equity firm TPG Capital has signed a nondisclosure agreement with Yahoo,