December, 2011
Prepare for the 3-year LTRO
Well, it’s the only explanation we can come up with for this morning’s up-sized Spanish bond auction.
The government had been looking to sell up to €3.5bn of paper, but ended up knocking out almost €6bn.
Disaster du jour
There’s a distinct whiff of burnt fingers in the City of London on Thursday morning.
The share price of punter’s favourite Pursuit Dynamics has crashed and burned after the fluid technology specialist announced a big revenue shortfall,
Further reading
Elsewhere on Thursday,
- The physics of finance.
- A tripolar monetary system.
- Ron Paul understands nothing about monetary policy.
- Why repo may blow up the system again.
- “Are Chinese trade flows different?”
Pink picks
Comment, analysis, and other offerings from Thursday’s FT,
John Gapper: Don’t make Amazon a monopoly
Whoever thought up Amazon’s latest idea for squeezing other retailers – offering money off to people who scanned prices in US stores with its smartphone app and then bought the goods on Amazon – deserves an award for bad timing,
Snap news
Breaking pre-market news on Thursday,
- Old Mutual puts Nordic operations up for sale for £2.1bn — statement.
- International Personal Finance warns Eastern Europe FX rates will hit profits — statement.
Further further reading
For the commute home,
- John Paulson proposes a sovereign-guarantee scheme for Europe.
- Reformed Broker picks his top 10 market moments of 2011.
- Daron Acemoglu suggests five books on inequality.
More on the conflicted Isda committee
The International Swaps and Derivatives Association has a list of journalists who’ve been naughty or nice. They write about them on their Media Comment blog here.
Given FT Alphaville’s previous post about the Isda-organised Determinations Committee,
The conflicted Isda committee
Imagine playing a game where you bet on the outcome of a certain event. Most of the time the final outcome is unambiguous: you play, and afterwards, it’s clear whether you won or you lost. But every now and then,
Tricky cartisti
There’s a certain Italian elegance to this intraday chart of Iti 10 year sovereign debt, no?
Technical analysts might spot an upside down head with a shoulder-shrug. Maybe.
That twitch higher,
CME Group plays old-school Chicago politics
In case you missed it, last night Jon Corzine was artfully thrown under what looked like a bomb-strapped bus being driven by the Chicago Mercantile Exchange, with no Keanu Reeves in sight.
Terry Duffy,
The IMF on a coercive Greek debt restructuring
We think the IMF just might be trying to say something to those who are still looking for a “voluntary” Greek bond write-down.
Interesting set of quotes dotted around the Fifth Review:
With near-universal participation in a debt exchange targeting a 50 percent face value haircut and offering a low coupon,
Not a lot of cash in the Attic
There’s so much to read in the IMF’s latest report into Greece’s bailout, released on Tuesday…
Although firstly we just want to point out what the Fund says about an increasing lack of cash inside the Greek state.
The Saudi production puzzle
Last week it transpired that Saudi Arabian oil production had hit its highest level in three years.
As Bloomberg reported at the time:
Saudi Arabia, the world’s biggest crude exporter, boosted output last month to the most in more than three decades to meet customer demand.
Blame the European banks
For their economic woes, US citizens can blame a dysfunctional Congress, greedy bankers, over-entitled workers or just plain old global imbalances. Or, of course, the eurozone debt crisis.
Goldman argues that one little-scrutinised way that the eurozone crisis could affect the US economy is through European banks pulling back on lending there.
Markets Live transcript 14 Dec 2011
Markets Live chat transcript for the chat ending at 12:25 on 14 Dec 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT NHHola Rabble NHsorry for being one minute late
As Chinese apartments go, so goes China
It seems that investors in Chinese shares are not feeling too optimistic of late:
Little sign of any of those risk-on blips on the newsflow from Europe or the US.
Chinese home buyers are also unhappy.
You have 24 months to comply
Shock, horror.
Just days after the London Stock Exchange paid a jaw dropping price for FTSE, the index provider has decided not take the nuclear option and force a 50 per cent minimum free float requirement on foreign companies listing on London.
Collateral crunch, commodity financing edition
Look at any financial market long enough and it starts to resemble the repo market.
Conventional sales and buybacks. Islamic finance. Covered bonds. Commodity contango or backwardation trades. Most of them have some form of sale and later buyback of assets,
IT consultant discovers eurozone, with disastrous consequences
For a company that does half its business in the euro area, one could reasonably expect Logica to be fully conversant with the ongoing sovereign debt crisis.
Seemingly not.
On Wednesday morning the IT company has revealed the “pockets of weakness”
Further reading
Elsewhere on Wednesday,
- Ad-libbing at the MF Global hearing.
- US tax rates too high or too low? Some charts.
- What “unemployment” means.
- On the euro arbitrage.
- Tips for low income countries.
Pink picks
Comment, analysis and more from Wednesday’s FT,
Martin Wolf: A disastrous failure at the summit
Whom the gods wish to destroy they first make mad. That was my reaction to the outcome of last week’s meeting of the European Union’s Council,
Snap news
Breaking pre-market news on Wednesday,
- Thomas Cook says first quarter bookings off to slow start; to close 200 shops; net debt £891m — statement.
- But German rival Tui says it expects to post a net profit in current fiscal year — statement.
Further further reading
For the commute home,
- Breaking: CME head says he was told by an MFG employee that Corzine did know about the missing money.
- The New Scientist takes a long look at peer-to-peer lending.
- Shiller on neuroeconomics.
Policymaker potency in the next US crisis: part II
In part one, the appetizer, we quickly looked at whether the US banking sector is stronger than it was in 2008, as Lewis Alexander, the new Nomura chief US economist, argues. On the face of it, he’s right — balance sheets appear stronger,
Policymaker potency in the next US crisis: part I
US policymakers probably have no idea what would happen to domestic banks if Europe implodes, but how useful would it be if they did?
There’s another Nomura note on US banks making the rounds, but this one is made more interesting by who wrote it: Lewis Alexander,
FOMC statement, 13 December 2011
Go back to watching Mario. See you in 2012.
– FOMC statement, 13 December 2011
Not quite, of course, but as expected, there’s nothing to see in the December FOMC statement. Rates remain the same and Twist continues.
At home with Ben
We’ve marvelled many times at Jon Hilsenrath’s extraordinary ability to mind meld with the most powerful man in global finance — Ben Bernanke (in case you were wondering).
How else to explain the string of scoops explaining the Fed’s thinking in the lead up to crucial FOMC meetings or get-togethers at Jackson Hole.
Procrastination kills, Greek debt edition
FT Alphaville is still confused by eurozone bigwigs’ promise that they’ll follow “IMF principles” to be friendly to bondholders in sovereign debt bailouts. Versus, say, being nasty about making them write down debt.