This week on FT Alphaville,
- Draghi’s comments and the EUR fall provided a Rorschach test for the markets. Read more
A great resource from Shearman & Sterling, in their note marking the end of the briefing war in the Argentine vs holdouts pari passu saga.
It’s a schematic of the arguments which the Second Circuit will likely consider when deciding appeals against an order for Argentina to pay holdouts alongside restructured bondholders. Some of the arguments are key. Some are not so key. Read more
There’s a lot I disagree with in Ross Eisenbrey’s NYT piece on high-skilled immigration, but I’ll start with this:
The bill’s authors, led by Senator Orrin G. Hatch, Republican of Utah, argue that America would benefit from letting more immigrants trained in science, technology, engineering and math work in the country, with the sponsorship of high-tech companies like Microsoft and I.B.M. … Read more
When good opportunities are scarce, hedgies will seek them in rather unlikely places.
Take Sareb, the Spanish ‘bad bank’ in the process of raising €250m in new equity for the second round of asset transfers from the country’s beleaguered lenders. Read more
Live markets commentary from FT.com
EU leaders near €960bn budget deal || Apple under pressure on $137bn cash pile || Sony’s sells property rather than TVs || China denies targeting Japanese ship || Dell to repatriate $7bn of overseas cash || China trade growth hints at strong 2013 || Bloomberg’s British empire || Investments pay off for KKR || Markets update: Closing out a fairly volatile week in a more positive mood Read more
“Oh, Hollande…” said Mario Draghi as the rest of us wondered if he had or hadn’t entered the supposed currency wars. Or if, in fact, the question was redundant.
The euro’s dive on Thursday was impressive and clearly the result of ECB president Draghi’s comments after the ECB’s rate setting meeting. But whether it was justified or not is very much contested. Read more
Elsewhere on Friday,
- Perverse incentives and productivity.
- The brief fashion that was housing investment.
- Makers versus takers: an update. Read more
A 6 per cent drop in Sony shares stood out as Asian stock markets fell. The Nikkei fell more than 1 per cent. Japan posted a current account deficit for a second month in December, leaving its 2012 annual surplus the lowest on record (Reuters). Sony posted an unexpected quarterly loss and cut its sales forecasts for TVs and games devices (Bloomberg).
Apple and David Einhorn clashed over its cash. The company said it would “thoroughly evaluate” Greenlight Capital’s call for it to issue preferred stock as a way of tapping its $137bn hoard, despite the activist fund’s decision to sue it over a proxy proposal that investors vote before this kind of share can be issued (Financial Times). “Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money,” Einhorn said in a letter to other investors. Greenlight has a 0.12 per cent stake in Apple, having advocated its shares since a fall in them began last year. But Einhorn has worked for months behind the scenes to convince Apple management of the preferred shares scheme, which they rejected for involving too high a dividend (Reuters). Read more
ROUND-UP
FT markets round-up: “Markets struggled for a foothold, with many stock barometers pulling back from recent multi-year peaks, as a batch of earnings reports disappointed and European Central Bank warned about the outlook for the region’s economy. The FTSE All-World equity index, which last week hit a four-and-a-half year closing high of 235.7, fell 0.5 per cent to 232.9 as the FTSE Eurofirst 300 closed 0.3 per cent lower and Wall Street’s S&P 500 lost 4 points to 1,508. The single currency began with gains earlier in the session. But after the ECB left policy unchanged, and Mr Draghi delivered his prepared statement at the start of his press conference, the euro started to slide. The euro last traded 0.9 per cent lower at $1.3397.” (Financial Times) Read more
And why this could well have been the best possible deal for Ireland.
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Here’s the transaction doc from the Irish ministry of finance. Click through the pic for the full pdf:
With all the excitement about ‘the great rotation’, it often feels that the debate focuses too much on analysing the recent flows, and less about the greed/fear dynamics driving them.
It’s been well documented that bond holders are increasingly frustrated by the miserable yields on offer in the fixed income markets, and are apparently flocking into the ‘cheap’ equity markets. We’ve already voiced our scepticism about the scale of this flocking. Yet what’s potentially also underestimated is the degree of skittishness by bond holders when the stock markets show signs of a wobble. After all, a lot of capital in fixed income got there after investors were burnt in the early 2000s. This loss aversion shouldn’t be underestimated. Read more
Reuters flashes hitting now (we note):
07-Feb-2013 14:56 IRISH PM SAYS 20 BLN EUROS REDUCTION IN NTMA MARKET BORROWING REQUIREMENT OVER THE NEXT DECADE
07-Feb-2013 14:53 – IRISH PM SAYS IRELAND HAS REACHED CONCLUSION WITH ECB TO PUT IN PLACE MORE SUSTAINABLE PROMISSORY NOTE AGREEMENT
Draghi follows Mark Carney onto the stage… Read more
Live markets commentary from FT.com
Rate-fixing scandal rocks three continents || Monte dei Paschi aided by covert loan || UK December industrial output rose in December || Sony hit by quarterly net loss || Credit Suisse raises cost-cutting targets || Dividend hurdle almost derailed Dell deal || Obama orders release of drone details || Murdoch shrugs off Liberty threat to BSkyB || Markets update: Struggling for momentum Read more
It’s Carney live. We know George Osborne is frustrated excited. Mark Carney, the next Governor of the Bank of England and the man Osborne once called “quite simply the best, most experienced and most qualified person in the world to do the job”, is in front of the Treasury select committee.
Here’s the live feed:
Elsewhere on Thursday,
- The simplicity of Chinese fraud.
- Are we too scared, or not scared enough?
- The fantasies that make DC insiders feel good. Read more
Asian shares lower || Anglo Irish Bank liquidated || ECB meeting today || Mark Carney before Parliament today || Cantor Fitzgerald in late-stage talks with Seymour Pierce || PBoC signals inflation fear || Solvency II costs ‘indefensible’ || Boeing developing 787 battery changes Read more
Click for the feed from the Irish parliament, where legislators have until the morning to pass an emergency bill liquidating Anglo Irish’s resolution company, unlocking a promissory note deal which might be on its way, before creditors of Anglo hit the LITIGATE button. Or something. (The entire prom note deal is needed by the Irish government before the notes’ next circa €3bn interest payment, because that’s what they promised the public.) Read more
ROUND-UP
FT markets round-up:“Stock barometers eased back from recent multiyear highs, though moves were mild as optimism over the global economy and corporate profits still provided some support to certain so-called growth assets. The FTSE All-World equity index edged higher as the FTSE Eurofirst 300 fell 0.2 per cent, after the Asia-Pacific region climbed 1 per cent. Wall Street’s S&P 500 ended the session fractionally higher at 1,510, leaving the benchmark just 3.6 per cent shy of record territory. Despite the softness on Wednesday, it appeared that Monday’s risk asset wobble on a spark of eurozone political fears was treated by many investors as simply an opportunity to buy back into a rally that has left the All-World flirting with its best levels since June 2008.” (Financial Times) Read more
World’s oldest bank puts out a late-night statement confirming “the presence of errors” in three structured transactions. Click for the full release… (it’s in Italian)
*NOONAN SAID TO PLAN ANGLO IRISH SPEECH IN PARLIAMENT
A few hours later… Read more
Yeah, so “stupid Libor emails” is now an established sub-genre in banker literature.
Though the funny thing about Wednesday’s RBS revelations is that attempts at manipulation generally, at least at the start, weren’t written down. The whole problem was that people trading rates were sat right next to people in charge of submitting rates for Libor. That’s due to the “Short-Term Markets Desk”, RBS management’s October 2006 bid to “facilitate more communication”. Oops. Read more
Presenting the CFTC order against RBS, as part of the bank’s $325m settlement with the regulator over allegations of “hundreds” of attempts at manipulation of Libor (notably Yen Libor):
We’ve recently heard an interesting suggestion that China’s ageing population — generally a bad thing for growth — might also have the positive side-effect of inducing a transition away from the country’s unusually high ratio of investment to consumption. But will it? Read more
The first one probably needs no introduction:
Live markets commentary from FT.com
Older entries
1Employer power, high-skill immigration and what we're really talking about
2Dear Ben, David and Doug, thanks but no thanks. Love, Sareb
3Choose your own adventure, sovereign debt trial of the century edition
4Weekender