Via Blackstone. Keep ‘em clean. (Unlike what the SeaWorld penguins — Blackstone owns the resort, which is planning an IPO – left behind at its offices, apparently.) Read more
The quotes below speak for themselves, and if you’re on Twitter then check out the #FOMC hashtag, where the gang at the NYT and a few others have rolling updates as they make their way through the statements.
Our earlier post is here, and emphasis ours in each excerpt…
Stockton (chief economist), September: Read more
This alarming gilt fact is brought to you by Bank of America Merril Lynch and it underlines one of the main fears many people raised about the QE surplus “raid” staged by the Her Majesty’s Treasury on the Bank of England last year.
From BofAML’s John Wraith (our emphasis):
As a result of the dramatic spike higher in yields that occurred over the first week or so of the New Year, the mark-to-market value of the BoE’s portfolio of Gilts acquired through QE over the past four years dropped by more than £7bn. This exceeds the largest decline in the portfolio’s value in any full month since QE began by more than £1.5bn, emphasizing both the extent of the rise in yields, and also the very large size the BoE’s holdings have reached (£326.7bn in nominal terms, with a basis point value of about £360m).
One of the reasons that the eurozone’s peripherals should be willing to put up with austerity is that it’s helping address internal balances and address falls in competitiveness. That’s the story being sold by the politicians at least. But now that the crisis is coming into its fifth year, there is a decent amount of data that allows us to see if those imbalances are indeed being corrected and that lost competitiveness regained.
James Nixon at SocGen has has done some clever number crunching with unit labour costs in the most crisis-hit eurozone countries since 2000, and found that any apparent improvements in competitiveness are likely to be fleeting. Read more
The Dutch central securities depository recently completed the full-scale dematerialisation process of all Dutch securities classes (bonds, equities and depository receipts) for the Dutch capital market…
Can’t believe we missed this (hat-tip Finextra). Why’s it news? Read more
A cut out and keep chart from Nomura (click to expand):
Timelines are handy. So are specific dates, especially if avoiding catastrophe. Read more
On Friday, the FSA has published its feedback and responses to a review of the Financial Services Compensation Scheme funding model issued back in July. It’s long. Lucky for us then that we were looking for one thing and one thing only — the stance on “pre-funding”.
Pourquoi?
The revised Liquidity Coverage Ratio of course! Read more
Live markets commentary from FT.com
Neil Irwin of Wonkblog has an excellent preview of what to expect when the Fed releases the transcripts from the 2007 FOMC meetings. (The Fed doesn’t say in advance when they’ll be posted, but we’re expecting them anytime now, possibly even today.) Read more
China’s Q4 GDP above forecasts || Cameron’s EU speech delayed by Algerian hostage crisis || BoJ eyes open-ended asset buying || Barclays eyes bonus pool for Libor fines || Glencore and Xstrata agree deal extension || Republicans consider short-term debt ceiling increase FAA || Boeing experts examine grounded ANA Dreamliner || Intel’s profits fall 15% || US experts examine ANA Dreamliner || Markets Read more
Young Europeans in countries hit hardest by the Continent’s economic crisis are finding it difficult to move out of their parents’ home. Data shows that over 50 percent of those aged 25 to 34 in some countries have yet to move out.
That’s the subheading of a Spiegel Online article that caught our eye this week. It came with the attention grabbing headline: Read more
Elsewhere on Friday,
- Debating Tim Geithner’s legacy.
- Here’s the transcript of his WSJ interview.
- The economics of America’s great geographic divergence. Read more
China’s Q4 GDP above forecasts || Asian markets rise, yen falls || Cameron’s EU speech delayed by Algerian hostage crisis || Barclays eyes bonus pool for Libor fines || FAA, Boeing experts examine grounded ANA Dreamliner || Why US companies are really hoarding cash Read more
China’s GDP grew 7.8 per cent in 2012; the slowest full-year of growth in 10 years, as the FT points out.
However the figure for Q4 was 7.9 per cent; a little above the consensus for 7.8 per cent. This was the first quarterly increase after seven straight quarters of decline, so it’s probably going to be seen as turning point after which China gets back towards the 8 per cent-plus growth that most forecasts are anticipating. Read more
A final word on Thursday’s defenestration of Rio boss Tom Albanense (via JP Morgan).
ROUND-UP
US stocks hit a five-year high, housing starts hit a four and a half-year high. The S&P 500 rose 0.56 per cent, closing at 1,480.95. It is now 5.2 per cent below its all-time high set in October 2007. Housing starts shot up 12.1 per cent last month (Reuters). Weekly initial jobless claims also fell to a five-year low at 335,000 (Bloomberg). Read more
Taken together, the policy vol crunch and regret factor must be putting the remaining bears in a paroxysm of remorseful fear.
He’s very quotable, Nomura’s Kevin Gaynor. Read more
Oh, my, my, my. From JPMorgan’s Task Force Report into the London Whale with its billions of losses in synthetic credit, this footnote:
74 Late on April 6, [JPMorgan CFO] Mr. Braunstein also received an e-mail from Mr. Venkatakrishnan, via [JPMorgan CRO] Mr. Hogan, stating that Mr. Venkatakrishnan had noticed that the notional exposures at CIO were very large, totaling about $10 trillion in each direction.
We’ve been writing about Cyprus for a while, since the country has been scampering after Greece down the road to a bailout.
But there are differences, big differences, between the two, and not just the obvious ones such as the size of bailout needed and Cyprus’ inconvenient Russian connection.
The main one, argue Michael Michaelides and Harvinder Sian at RBS, happens to be Cyprus’ gas reserves. That’s should make the unpalatable task of bailing the country out go down a lot more easily – if the politicians have the foresight. Read more
Here’s the Swiss franc at its weakest level against the euro since the Swiss National Bank put its cap into place in September 2011:
The Task Force Report into the billions of dollars of losses racked up by JPMorgan’s Chief Investment Office has revealed a number of things, not least of which are some impressive spreadsheet errors.
Impressive enough, perhaps, to be worthy of inclusion in the European Spreadsheet Risks Interest Group’s list of Horror Stories.
(Yes, there is such a group and a massive H/T to reader Justin Cormack for informing us of it. Justin, we hope you don’t want to work for JPMorgan.) Read more
We still think the minutes of the December FOMC meeting — specifically their revelation that “several” committee members believe asset purchases should be slowed or stopped by the end of this year — were wrongly interpreted by some as a hawkish shift.
Bernanke explained at the September presser that asset purchases, purpose of which he said was “to increase the near-term momentum of the economy”, would continue until the outlook for labour markets had improved “substantially”. Read more
Live markets commentary from FT.com
Rio Tinto’s chief Tom Albanese has stepped down || Virtually all Boeing 787 Dreamliners have been grounded || Gas workers in Algeria sized by militants || French troops begin Mali ground campaign || UK developers warn of FSA ‘slotting’ rules || Some yen clarification from Japan’s economy minister || HP rebuffs acquisition inquiries || Singapore acts to avert property bubble || Iraq, BP considering Kirkuk field deal || Research rewrites global trade data || Fisher voices doubts on Fed bond buying || Wall St banks put brake on bonuses || Deutsche derivative helped Monte Paschi mask losses || Markets summary Read more
Obviously, there was no chance of keeping Kaminska away once the Rio story broke.
So FTAV’s commodities specialist will be joining Bryce and Murphy on Markets Live, our regular markets chat, at 11am on Thursday. Read more
Nothing short of an RNS fit for framing from Rio Tinto this Thursday morning:
Rio Tinto expects to recognise a non-cash impairment charge of approximately US$14 billion (post tax) in its 2012 full year results. These impairments include an amount of approximately US$3 billion relating to Rio Tinto Coal Mozambique (RTCM), as well as reductions in the carrying values of Rio Tinto’s aluminium assets (mostly Rio Tinto Alcan (RTA) but also Pacific Aluminium) in the range of US$10-11 billion. The Group also expects to report a number of smaller asset write-downs in the order of US$500 million. The final figures will be included in Rio Tinto’s full year results on 14 February 2013.
Older entries
1Once you turn base money into short-term debt, can you go back?
2A tempest in a spreadsheet
3Footnote 74: FACEPALM
4When cash costs extra (9% extra)
5Oh, Rio, Rio....
Show more6BHP against the iron ore price
7Will Cyprus be bailed out by gas?
8The European house of mum and dad
9The Albanese years (updated)
10From subprime to crisis: the Fed's 2007 transcripts
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