John McDermott
Rally monkey makes a splash in global liquidity
The almost-useless DJ Industrial Average on Wednesday climbed nearly 500 points – its largest one day gain since March 2009 – returning it to positive territory for 2011.
Financial comet crashes into planet hyperbole
Well, we asked for an update. Now let’s play spot the difference.
Before (about 10am New York time):
After (about noon New York time):
The collateral limits of coordinated action
Wednesday’s central bank intervention is impressive in its symbolism but unlikely to do much more than buy eurozone leaders a few days.
RBS’ US rates team has provided a useful analysis of the move. The immediate background to the intervention,
NYSE invokes rule 48 for Wednesday’s open
Tin trampolines at the ready, it’s set to be a fast open:
Wednesday, November 30, 2011 9:13:02 AM RTRS – NYSE AND NYSE AMEX CASH MARKETS INVOKE RULE 48 FOR OPEN.SPXNYX.N
And before you ask, here’s what it means via the NYSE website:
The OBR “perhaps” stress tests a eurozone crisis
The central forecast in Tuesday’s OBR report predicts that the UK will return to trend growth within three years and eliminate the structural deficit in 2016-17, one year later than the chancellor’s previous commitment.
UK economic policy: less plan B, more plan A+1
If you liked the Bank of England inflation fan charts, then you’ll love the OBR’s fan charts.
GDP:
Public sector net borrowing:
Cyclically-adjusted current budget (i.e. when will the structural deficit be eliminated?):
Further further reading
For the commute home,
- Foreign Policy publishes its list of the “top 100 global thinkers”.
- Europe is facing ”that rarest of problems—one that you really can solve just by throwing money at it.”
Black Friday to the rescue — but at what cost?
US equity markets are nearly as excited about Black Friday as these shoppers:
Retail surveys all point to above-expectations spending over the so-called “first weekend of the Holidays”, which begins with Black Friday,
Las Vegas bets on a tech future
FT Alphaville takes a break from the gambling tables and reports from Las Vegas.
The Cosmopolitan Hotel in Las Vegas is so trendy that FT Alphaville put all its chips on green, lost, and escaped as quickly as the floors full of preening pseudo-hipsters allowed.
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,
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 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.
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,
Introducing the Keep America Safe Job-Creating Congress ETF
CBS’ flagship 60 minutes programme carried a feature Sunday night that looked at whether Congressmen have been trading stocks based on insider information. It’s a theme that’s been well covered in the blogosphere but last night it reached prime-time.
US Markets Live transcript 11 Nov 2011
Markets Live chat transcript for the chat ending at 16:10 on 11 Nov 2011. Participants in this chat were: John McDermott, FT Cardiff Garcia Joseph Cotterill, FT Izabella Kaminska JMLet’s try this again
US Markets Live: 10am New York time, 3pm London time
The date is 11.11.11.
We don’t know what that means either.
But we do know we’ll be chatting all things markets in a few minutes time — join us here for this week’s US Markets Live.
We’ll be looking at Italy’s impact on this hard land,
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,
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,
Further further reading
For the commute home,
- On Berlusconi: “… he knows nothing about the Internet, but he’s really a pro at daytime television.”
- Isda vs NYT, explained.
- Negative interest rates are unnatural.
EFSF: a circular, counterproductive, and creative cannibal (continued)
Part two.
Unfortunately, Nomura’s analysis of the EFSF’s shortcoming is both more convincing and more extensive. Here are some choice extracts, with our emphasis:
1) Correlation or Circularity is deepened:Neither option solves the correlation or circularity problem (i.e.,
EFSF: a circular, counterproductive, and creative cannibal
The revamped EFSF risks becoming the wiggle side chair of financial engineering, lauded for its creativity but rarely used for its intended purpose.
On Monday, Nomura strategists released a useful note explaining the two new aspects of the EFSF — the special purpose investment vehicle (SPIV) and the credit insurance option — along with their pros and cons.