November, 2011
Dr Gloom’s Reform Trilogy
Brace yourself we have another helping of doom and gloom from Dr Tim Morgan, the author of the recent Project Armageddon report.
It’s the first part of his Reform Trilogy, titled Challenging the denial consensus:
Prepare the printing presses
And so it begins. The softening up exercise for another splurge of QE.
From the Bank of England’s depressing November inflation report.
First, growth (or lack of):
Output appears likely to be broadly flat in the final quarter of 2011.
Markets Live transcript 16 Nov 2011
Markets Live chat transcript for the chat ending at 12:46 on 16 Nov 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHCiao Rabble NHsorry we are late
If you tolerate this, then your T-bills will be next
In the sound and fury of eurozone sovereign debt activity on Tuesday, we forgot to take note of Belgium’s auction of short-term T-bills.
It was not good.
It was really not very good:
Yields on both the three-month and 12-month paper sold reached three-year highs.
The Bank of LSE
As expected the star of the show in Wednesday’s half year figures from the London Stock Exchange was its Italian clearing business.
Income was up 225 per cent on a year ago, as the LSE sweated the margin posted by clients of Cassa di Compensazione e Garanzia (CCG). By that,
Is Basel 2.5 hitting the bond market?
What can be confusing about the carnage in eurozone sovereign bond prices, is that there are so many factors at work all pushing the same way.
There are technical and fundamental factors on top of the blind panic and fear.
Further reading
Elsewhere on Wednesday,
- Eurogeddon.
- Did the Russian default disprove MMT?
- Positive Money on why money can exist without debt.
- Should the BoE hand out free money?
- Rating agencies in the dog house again.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Europe must not allow Rome to burn
Confronted with turbulence in the provinces, the eurozone has sent in new governors.
Snap news
Breaking pre-market news on Wednesday,
- LSE says income from its Italian clearing business up 225 per cent from a year ago — statement.
- Icap says expects to meet 2012 forecasts if markets stabilise — statement.
Further further reading
For the commute home,
- American internal migration reaches record low.
- Effective sanctions + regional cooperation + weaponization of the opposition = eventual dictator downfall?
- Stock buybacks versus dividends.
Sino-Forest still has many questions to answer
And it can start by answering: what’s the deal with these alleged whistleblowers (see below)?
The interim report published by Sino-Forest claims to exonerate the company, but that’s going too far, too soon.
The City of London job cull…
… shows no signs of letting up.
The latest casualty is Altium Securities.
We are also picking up rumours that Religare is considering “strategic options” for its UK operation, which owns Hichens, Harrison,
John Pluthero – Thank you and goodnight
When we last looked at the Cable & Wireless Worldwide share price (about seven hours ago) it was down around 12 per cent.
By the close of play in London it was down 26 per cent.
John Pluthero what have you done?
The answer,
A Sino Fudge
Inquiry Clears Sino-Forest of Short Seller’s Fraud Charges screamed numerous headlines on Tuesday, following this statement from the embattled Chinese tree churner. An extract, quoting vice chairman and CEO Judson Martin:
The battle for Zuccotti Park [updated]
Update (4:54pm New York time): The state supreme court declined to extend the earlier court order, judging that protesters’ first amendment rights weren’t being undermined by the city’s enforcement of its park and health and safety rules.
French bonds — some (parabolic) perspective
Chart of French 30-year bonds’ spread to German debt over the last five years (via Reuters):
We think it’s a good chart… because it shows that investors really, really want Bunds, and this is why spreads even among the AAA members of the eurozone are moving out so much.
Markets Live transcript 15 Nov 2011
Markets Live chat transcript for the chat ending at 12:31 on 15 Nov 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT Izabella Kaminska NHHola NHwe’re going Spanish again
The LSE and the Cassa di Compensazione e Garanzia
What’s one of the fastest growing parts of the London stock exchange?
Answer: its Italian clearing house business. According to Goldman Sachs income from this operation has grown four-fold in only 15 months and it now accounts for as much as a third of group earnings.
John Pluthero – my work here is done
Farewell then John Pluthero, chairman, chief executive and all powerful being at Cable & Wireless Worldwide.
It’s fair to say you won’t be missed by shareholders, who seem to have come to the conclusion that you aren’t the right man to take the company forward.
Dios mío! – redux
Oh dear.
Oh dear, oh dear.
Oh dear, oh dear, oh dear.
Further reading
Elsewhere on Tuesday,
- On Europe: Bill Gross vs Mohamed El-Erian.
- On North America: Paul Krugman vs Larry Summers.
- More and more of our imports are coming from overseas.
- Eurozone debt-to-GDP heatmap.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
David Miliband: Don’t split Europe; make it stronger
I don’t know whether to weep or laugh, writes Miliband, MP for South Shields, and former British foreign secretary.
Snap news
Breaking pre-market news on Tuesday,
- UBS names Sergio Ermotti as CEO; Axel Weber to become chairman a year early — statement.
- John Pluthero to step down as CEO of Cable & Wireless Worldwide after £443m half year loss — statement and statement.
Further further reading
For the commute home,
- The latest estimates of fundamental equilibrium exchange rates, courtesy of our colleagues at Money Supply.
- The return of Treasury Secretary Summers, bank failure simulation edition.
The new EFSF is (nearly) dead; long live the new ESM!
No-one likes to kick a financially engineered monoline-cum-CDO super-fund of dubious sovereign debt when it’s down.
Aside from Moody’s, that is.
In its latest weekly credit outlook, published Monday,
Please give generously…
… because Unicredit is passing round the begging bowl.
It’s asking shareholders to back a €7.5bn cash call and trying to make it all look a bit better by pulling the old reverse stock split trick.
Some euro banknotes are more equal than others
With market chaos still firmly gripping the eurozone system, it may be time to tackle the next possible hotspot – the issue of eurozone settlement mechanics.
Luckily for us, John Whittaker, an economist at the University of Lancaster,