November, 2011
Sprechen Sie Deutsch?
Friday’s quote du jour comes from German paper Frankfurter Allgemeine Zeitung and its interview with Irish prime minister Enda Kenny.
First question – “Mr Irish prime minister, do you speak German?”
Further reading
Elsewhere on Friday,
- ‘Voluntary’ Greek bond swap update.
- The clearinghouse lender of last resort.
- ECB does not accept free-riders.
- Under the (mortgage) sea. State by state.
- Your breakfast cereal is fighting with archaeologists.
Pink picks
Comment, analysis, and other offerings from Friday’s FT,
Michael Ignatieff: Listen to the people, or fail
Politicians in Greece and Italy have failed. Now it’s the technocrats’ turn. Having been pummeled by the bond markets and disgraced by their own intrigues,
Snap news
Breaking pre-market news on Friday,
- Tullett Prebon warns of slowdown in October and November; reveals £5.5m of legal costs — statement.
- SABMiller to raise offer for Fosters after Australian Tax Office ruling – report.
Further further reading
For the commute home,
- Why not break-up Citigroup?
- Jörg Asmussen speaks.
- Local government employment analysed.
- Rule by technocracy.
- On parking.
- What does the Reformed Broker do?
- John Hempton finds another interesting paragraph in the Sino-Forest report.
Meet the new Fed stress tests…
… same as the old Fed stress tests.
At least that’s the prediction of Nomura’s Glenn Schorr, whose note published on Thursday plays down any expectations that the forthcoming Comprehensive Capital Analysis and Review (CCAR,
Everything’s not lost in a lost decade
The dreaded lost decade that is staring the developed world in the face might not be so bad after all. At least according to Citigroup’s glass-half-full equity strategy team.
Lost decades, defined as 10-year periods of painfully slow growth (circa 1 per cent per annum), are always painful for the wider economy but they need not be for equity investors.
Julius Baer on steroids? [updated]
The investment banking bloodbath continues.
UBS has just announced plans to exit or significantly downside several businesses within its IB division and axe around 2,500 jobs. That’s roughly 10 per cent of the workforce.
Eurozone GC is splitsville
Something strange is up in the world of ‘General Collateral’. And since eurozone funding markets are increasingly dependent on collateralised rather than unsecured loans, these are important developments that could be influencing rates elsewhere.
Getting a little Spanish bond yield perspective
On Thursday there was an auction of Spanish 10-year date, aka mega headline-grabbing European peripheral sovereign benchmark debt. The sovereign found itself paying a euro-era high of 6.975 per cent for the €3.56bn of issuance.
The Bank of Beard (or Northern Virgin)
Is the sale of Northern Rock to the Grinning Pullover a deal for UK taxpayers?
Chancellor George Osborne says it is:
The sale of Northern Rock to Virgin Money is an important first step in getting the British taxpayer out of the business of owning banks.
An existential crisis in Eurozone rates [updated]
[Updated to clarify some points.]
Presenting the three-month EURUSD currency basis swap, currently trading at approx -137 bps:
Though, clearly things aren’t quite as bad as in 2008 (yet).
But they are at post Lehman records.
Markets Live transcript 17 Nov 2011
Markets Live chat transcript for the chat ending at 12:28 on 17 Nov 2011. Participants in this chat were: Bryce Elder/FT neil collins Neil Hume, FT BEGood morning BEAnd welcome to Markets Live
God bless income disparity
Dennis Gartman, of Gartman Letter fame, is feeling pleased with himself.
Really, really pleased.
Earlier this week, he regaled subscribers with a story about a chance encounter with a reporter in Canada.
How I learned to stop worrying and love the UK and gilts
As a concept, the UK as a haven takes some getting your head around.
Fortunately, Andrew Roberts, head of European rates strategy at RBS, is on hand to help understand why the UK and in particular its gilt market,
Further reading
Elsewhere on Thursday,
- More on yesterday’s Fitch-inspired US bank plunge.
- Bloomberg’s loss aversion function.
- Tick tock, tick tock. (Debt clock)
- Is Bank of America doubling down?
- The latest edition of Twitter.
Pink picks
Comment, analysis, and other offerings from Thursday’s FT,
John Gapper: A better way to occupy Wall Street
It is time for Occupy Wall Street, and its derivatives around the US and the world, to learn a lesson from the name of the left-wing campaign group formed in 1998 in response to the Monica Lewinsky scandal,
Snap news
Breaking pre-market news on Thursday,
- Centrica warns of profits; blames warm weather — statement.
- Glencore shares expected to rally after trader flags solid performance of marketing division — statement.
Further further reading
For the commute home,
- The BEA releases a report titled Operations of US Multinational Companies in the US and Abroad. “In the US and abroad” seems redundant and robotic: we’d prefer “in the whole wide woolly world”.
A warning from the land of leveraged loans
Here’s one inevitable consequence of the European bank deleveraging we’ve all been anticipating:
Via S&P Leveraged Commentary & Data, the chart shows the widening gap between the leveraged loan rate in Europe and in the US since August.
Bunds get Junckered, and other repo dysfunctions
Just when you thought it couldn’t get any worse… Jean-Claude Juncker, Luxembourg Prime Minister and president of the EuroGroup speaks:
Nov. 16 (Bloomberg) — Germany’s debt level is a “cause for concern,” Luxemburg Prime Minister Jean-Claude Juncker told the General-Anzeiger newspaper.
The naked derivative exposures of banks to sovereigns
As spreads of all colours blow out due to the perpetually unresolved sovereign crisis in Europe, FT Alphaville has been wondering what non-fundamental factors are driving these moves. The bond market is in some places broken and in other places potentially being driven by regulation.
Introducing Vanquis Bank (and an apology)
We’re fascinated by Provident Financial, the doorstep lender to low-income households, and its credit card business Vanquis Bank.
Earlier this week, the company hosted an investor day for this fast-growing business,
The ETF wash rule
FT.com reporter Jason Abbruzzese submits this guest post for FT Alphaville.
They say nothing in life is certain apart from death and taxes. But, as it turns out, if you’re trading exchange traded funds the latter is becoming increasingly more questionable.
The reversing core-headline CPI gap
We still remember the August US CPI release that brought whispers of stagflation as it reported inflation in July that was well above what the market anticipated. (You heard no such whispers from us, natch.)
But since then:
Bye, bye WTI-Brent spread disconnect…
Whoa…. look at that move in the WTI-Brent spread. That’s at least $4 worth of tightening in less than 10 minutes:
And what has caused this dramatic turn of events?
No less than this surprise statement from pipeline operator Enbridge declaring a reversal of the all important Seaway pipeline,
Italy catches a cold, eurozone sneezes
Bond yields are all over the shop on Wednesday after yesterday’s buyer strike.
The yield on the sovereign’s 10-year bonds can’t seem to stop flirting with 7 per cent no matter how inappropriate unsustainable it is.
Indie v sell-side research and a UniCredit spam alert
Turn on your spam filters. UniCredit is on fire:
This email torrent was prompted by the bank’s decision to merge its loss-making western European equity-research unit with new partners Kepler Capital Markets (a French brokerage and independent provider of equity research).