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’Do you believe in netting? — Part 2
In Part one, FT Alphaville asked whether there was reason to doubt the netted derivatives exposures reported by banks. Here, we discuss how netting works (or doesn’t, ahem) when counterparties collapse.
Do you believe in netting? — Part 1
On Friday, Jeffrey Snider of Atlantic Capital Management argued that finance now exists for its own exclusive benefit. The thrust of his argument is that derivatives have allowed banks to escape the bounds of actual cash assets and the real economy.
When the deleveraging meets the real economy
Looking forward to the new year yet?
After a likely outright contraction in GDP in 2012, in the creditless recovery that we envisage the pick-up in GDP growth is likely to be slow and shallow.
That’s from a note by Daniele Antonucci at Morgan Stanley in which the analyst assesses the impact of bank deleveraging on the real European economy.
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:
About that last bastion of health in Europe
Here’s a nice chart showing German new factory orders from Sean Corrigan at Diapason Commodities:
As Corrigan notes to FT Alphaville, orders have now suffered their worst three-month run in post-Reunification times (apart from the 2008 crash).
Anarchy in the UK
Relax everyone, the UK’s haven status and AAA rating is safe.
Or so says Nomura in a ‘Riot’ special.
Selected highlights, emphasis ours:
The initial spark was a protest over the fatal shooting of a man by the police.
Edwards says this has nothing to do with that downgrade
Thought the current turmoil was down to the downgrade of US debt? Wrong!
According to Societe Generale’s uber bear, Albert Edwards, this has absolutely nothing to do with S&P, the White House, Tea Party etc.
The global economy is critically ill
It’s a SocGen double header on FT Alphaville this Friday morning.
You’ve had the apprentice (Dylan Grice) and now it’s time for the Dark Sith Lord (Albert Edwards).
The global economy is critically ill.
Another house price decline
Because of the lag, the latest release of the S&P/Case-Shiller home price index won’t shock anyone, but it’s still worth noting:
New York, November 30, 2010 – Data through September 2010, released today by Standard &
Blast off – UK GDP rocket
And it was RBS analysts wot won it.
Economic growth in the third quarter chewed up consensus forecasts and spat them out on Tuesday — recording 0.8 per cent above a predicted 0.4 per cent.
Just ignore all those austerity clouds,
US non-farm payrolls – down by 95,000
US non-farm payrolls fell by 95,000 jobs in September while the unemployment rate stayed at 9.6 per cent, according to the Bureau of Labor Statistics.
The decline was much more than expected by the market.
Highlights (and lowlights) from the Beige Book
Just as the US was turning its weary eyes to Barack Obama’s speech on the economy on Wednesday, the Federal Reserve Board released the sixth Beige Book report of the year. This most recent edition covers activity in the last half of July and all of August.
US non-farm payrolls – down 54,000
US non-farm payrolls fell by 54,000 jobs in August while the unemployment rate remained constant at 9.6 per cent, according to The Bureau of Labor Statistics.
The decline was much less than expected by the market.
Not another freaking economic indicator
Inbox jammed with the latest barrage of daily economic data points and previews?
Feeling overwhelmed at the prospect of wading through the reports and trying to figure out what the market consensus is?
Well you don’t have to feel alone anymore.
US Q2 house warming (or should that be warning)
Yes, house prices in the US climbed in the second quarter of the year. No, that’s not cause for optimism or even relief.
First the announcement from S&P (emphasis ours):
Data through June 2010,
The three risks to global growth, from Barclays Wealth
Three regions, three problems.
According to strategists at Barclays Wealth on Monday, the global economy is facing three big risks in three big regions:
The risks are that U.S. consumers do not increasing spending,
What’s going on with lumber futures?
The Baltic Dry’s losing streak – now into its 28th day – is becoming old hat. But have you heard the one about the lumber futures?
As Bloomberg reported, lumber fell limit-down on the CME on Tuesday,
BIStoric
The Bank for International Settlements — the central banks’ bank — has done something great.
BIS has scanned and stuck all its historic annual reports online, in one easy-to-access place. The reports,
US shoppers spent less over Black Friday weekend
Consumers spent significantly less per person at the start of the holiday season this weekend, dimming hopes for a retail comeback that would help propel the economy early in 2010, Reuters reported. The lacklustre spending could pressure retail stocks on Monday,
Analysts still confident even if US consumers aren’t
My, my — Tuesday’s US consumer confidence survey certainly took some analysts by surprise.
The Conference Board’s confidence index fell to 47.7 from a revised 53.4 in September, while analysts polled by Reuters had expected a rise to 57.0.
Slow US recovery blamed on low demand
Weak demand from battered consumers will be a “major constraint” on the US economy for the foreseeable future, key White House adviser Lawrence Summers said on Monday. Mr Summers, the director of the National Economic Council,
US consumers’ credit problem
Data released on Wednesday show US consumer credit declined for the seventh straight month in August as wary, cash-strapped consumers kept their credit cards in their wallets.
The Federal Reserve said consumer credit outstanding fell by a more-than-expected $12bn in August to $2,460bn.
US unemployment hits a 26-year high
Employers cut more jobs than forecast in September, sending the unemployment rate to 9.8 per cent — the highest since 1983 — compared with 9.7 in August.
Data released on Friday by the Labor Department in Washington showed US payrolls fell by 260,000,
Don’t fear the inflation, Goldman says
Goldman Sachs is putting an end to the deflation vs inflation debate, once and for all!
In a 30-page research note out on Wednesday, the bank comes down firmly on the side of (moderate) deflation in the near-term.
Eurozone business trails US and UK
The eurozone economy may appear to be recovering faster than those of the US and UK, but its companies are underperforming their British and American rivals, according to research by ING. Companies from the eurozone are the only ones,