November, 2011
Further reading
Elsewhere on Friday,
- OWS makes it into not one, but two SEC filings.
- Shorting season starts in Italy.
- Where, oh where, did the safe haven assets go? …
- … to gold mining companies,
Pink picks
Comment, analysis, and other offerings from Friday’s FT,
Martin Wolf: Bob Diamond’s unconvincing defence
Talk is cheap. Action is expensive. But Bob Diamond’s inaugural Today Business Lecture was clever talk,
Further further reading
For the commute home,
- What if the ECB rewarded Spain for good behaviour?
- Bill Clinton has some ideas for the US economy.
- General Ben’s marching orders.
- Could the ECB become the Central Fiscal Authority?
- MF Global:
Study the financial crisis with the new Greek PM
It’s not just the rise of the technocrats, it’s the rise of the professors, too.
On Thursday afternoon the ECB announced Lorenzo Bini Smaghi was leaving the bank, presumably to make way for a Frenchman,
A snapshot of collateral stress, courtesy of the Fed
Many might not be aware, but the Fed introduced a quarterly survey “on changes in credit terms and conditions for securities financing and over-the-counter derivatives transactions” over a year ago.
The point was to shed light on the mysterious practices of the shadow banking sector and in particular the daily goings on in the repo finanicng markets.
Italian CDS curve inverts (and who made money?)
It’s not every day the second-biggest name in the CDS market goes from a healthy shape to a distressed one.
But Wednesday was that day, thanks to Italy.
Italy’s CDS curve — constructed from prices for one-year,
French exposure in pictures
Au bout du fossé, la culbute.
Brace yourself. Here are some reasons why markets are giving France, in particular, a kicking today, according to the Banca D’Italia’s latest financial sector report on November 2:
While everyone is obsessed with sterilisation in Europe…
… the Fed continues to quietly sterilise away.
Case in point, the Fed’s continuing 28-day term deposit facilities.
Readers may recall, these were originally introduced over a year ago and billed at the time as a type of “exit strategy”
When Italian bonds trade in zero gravity
The drama in the Italian bond market in recent days has naturally raised a lot of questions, not least as to how sustainable the current financing levels are.
Citi’s rates strategy boffins have been mulling “fair value”
Markets Live transcript 10 Nov 2011
Markets Live chat transcript for the chat ending at 12:25 on 10 Nov 2011. Participants in this chat were: Neil Hume, FT Tony Tassell Joseph Cotterill, FT NHCiao NHand welcome to Markets Live
Goodbye risk-free, hello French spreads at 21-year high
Another nail in the coffin for old Europe’s risk free status.
The French 10 year note is now seen as a spread product over comparable Bunds — 153bp at pixel time.
Via Reuters.
(click to enlarge)
According to our quote machines,
Bunga, bunga
Italian bond yields are falling — the 10-year’s below 7 per cent:
European equity markets are rallying, helped by rumours of an emergency ECB announcement later today.
And… Italy has managed to get that 12-month T-bill auction away.
Chinese stimulus *spoiler alert*
“So mild we might not even feel it” – is how Stephen Green and Wei Li at Standard Chartered anticipate the Q4 Chinese fiscal stimulus.
That would be the stimulus that everyone is hoping like mad will
Nat Rothschild, an innocent abroad
Compare and contrast.
Nat Rothschild’s letter to the FT on October 19th.
We insist on strong, independent boards. In the case of both Bumi and Vallares, the controlling shareholders’ voting rights are limited to less than 30 per cent.
The view from Rome
(Front-page headline from Il Sole 24 Ore. “HURRY”)
Although there’s a tiny amount of breathing room…
Italian bond yields were falling at pixel time — partly because everyone who had to sell because of the margin increases yesterday have already sold,
Is fuel oil changing everything?
Fuel oil: a byproduct of the petroleum distillation process, usually considered either a distillate or a residue.
Or as Wikipedia explains:
The term fuel oil is also used in a stricter sense to refer only to the heaviest commercial fuel that can be obtained from crude oil,
Why Italy is ‘Oh, so special’
Well this is embarrassing. Turns out that Banca D’Italia released its latest financial stability report on November 2.
It’s a shame we missed it because it is literally jam-packed with market info. Worth a read on all fronts.
Further reading
Elsewhere on Thursday,
- You too can can apply to manage the EFSF balance sheet!
- How the Eurozone rescue plan is like a toxic dumpster.
- Italy tax fact of the day.
- Why Italy’s original sin was borrowing in a foreign currency.
Pink picks
Comment, analysis and more from Thursday’s FT,
John Gapper: Olympus’ deceit was dishonourable
It is still possible to believe that the accused trio of directors, headed by Tsuyoshi Kikukawa, the former chairman of the camera and medical equipment company,
Snap news
Breaking pre-market news on Thursday,
- Profits at Credit Agricole because of Greek sovereign debt woes — statement.
- 3i Group to increase dividend following pressure from shareholders; NAV down 16 per cent — statement.
Further further reading
For the commute home,
- Today in toldyaso: five years of Berlusconi on the cover of the Economist.
- And today in it’s about damn time: SEC approves new listing standards for reverse mergers.
- Free Exchange reviews Race Against the Machine.
Emergency Markets Live transcript 9 Nov 2011
Markets Live chat transcript for the chat ending at 20:32 on 9 Nov 2011. Participants in this chat were: John McDermott, FT Izabella Kaminska Joseph Cotterill, FT Cardiff Garcia JMGood afternoon
Emergency markets live starting now!
It’s a bunga bunga bloodbath out there.
Dow Jones
11,785.86 -384.32 (-3.16%)
S&P 500
1,230.78 -45.14 (-3.54%)
Nasdaq
2,627.62 -99.87 (-3.66%)
Tin hats and cotton bandages at the ready,
Another day in Europe…
More EU pantomime on Wednesday:
Take one, via Reuters:
Italy was offered aid from the European Financial Stability Facility (EFSF) during the G20 summit at Cannes last week but Prime Minister Silvio Berlusconi refused it,
The US Treasury investment that’s a bit bunga bunga
As we all know by now, providers of swap-backed ETFs have no obligation to collateralise funds with anything resembling the indices being tracked.
It’s all okay, because the collateral is marked-to-market every day,