Welcome to see such punchy prose from an executive, surely.
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?” Read more
Downloadable for your Friday afternoon commute, we had a chat about a few topics we’ve been covering lately and even answered some of the questions you, the readers, submitted last week. If you want to jump directly to a topic, below is a time guide and some links we refer to in the podcast: Read more
The eurozone’s largest economy has defied the crisis better than most expected, yet it couldn’t maintain growth in the final quarter of last year, shrinking by an estimated 0.6 per cent. That compares to France’s 0.3 per cent and Spain’s 0.7 per cent respective falls. But given that usually Germany is the region’s engine of growth, the key question is how long this weakness might last.
Fortunately it seems that the recovery might be brisk. Read more
Mortgage markets come in many different flavours. Some American states, for example, like theirs to be non-recourse. In such locations, a homeowner can walk away from their mortgage, and send the house keys to the lender secure in the knowledge that the only asset that can be seized is the property.
Such tastes no doubt contribute to a higher proportion of non-performing loans, as mortgage-holders are quite aware of their right to walk away — an option that becomes increasingly more attractive in an economic and housing downturn.
And now it would appear that the Spanish might prefer their mortgage market to have a taste of the non-recourse mortgage in future, as a pressure group succeeded on Tuesday in getting the country’s parliament to debate an initiative for making the change. Read more
This is a follow up to Thursday’s post about Rosneft’s 500 million barrel collateralised financing (to raise money for its purchase of BNP-TNK) and how the market managed to absorb it almost without any price impact.
Most of the previous post was based on the observations of Philip. K. Verleger, who believed the latter point represented a triumph for the futures markets, which had reached a whole new level of maturity.
And yet, as we have been reporting, it’s always more important to look to the curve. Spot price, or “flat price” as traders like to call it, is almost irrelevant. What’s happening in so-called time-spreads is usually much more critical. (And yes, nobody usually takes unhedged positions on flat price.) Read more
Live markets commentary from FT.com
Anglo slumps to full-year loss || ECB won’t cut rates to weaken euro, says Weidmann || Broker draws Tullett into Libor scandal || Buffett and Brazil tycoon make Heinz offer || Commerzbank chief to forgo bonus || Cameron blasts retailers over horsemeat || JPMorgan’s Gulati to launch own fund || Meteorite hits central Russia, 400 hurt || Markets: Traders are in cautious mood Read more
It’s the latest in Japanese swings and roundabouts, pushing the yen higher and JGB yields and stocks lower… What to blame? What to blame?
Asian markets lower || Muto reportedly leading BoJ contender || Tullett Prebon drawn into Libor scandal || Dell on offensive over buyout || Portugal confident of bond market return || Lehman wants to talk to London Whale || Browett returns to UK high st after Apple || The EU FISH Read more
ROUND-UP
FT markets round-up:“Disappointing European economic data crimped optimism about global growth prospects and weighed on global stocks. The single currency also fell sharply on the day. The FTSE All-World equity index fell 0.1 per cent as the FTSE Eurofirst 300 closed 0.2 per cent lower. In New York, the S&P 500 turned an initial 6 point loss into a 1 point advance to 1,521 — a fresh five-year closing high.” (Financial Times) Read more
The CLO kind of got off lightly in Fed governor Jeremy Stein’s “Overheating in credit markets” speech.
Makes sense, given what Stein was mostly talking about — places in the market where the yield chase could be relying on assets that in turn rely on short-term funding. In other words, leverage that turns “overheating” into a supernova. Read more
Philip K. Verleger, veteran independent energy consultant, has been doing some sleuthing concerning some of the more opaque areas of the oil market.
What he’s unearthed is interesting, to say the least. Read more
Cars and motoring are not really FT Alphaville’s specialty. But we do love public spats.
The current one running between Tesla and SpaceX founder Elon Musk and John Broder of the New York Times is particularly engaging. It regards Broder’s test-drive of the Tesla Model S and his subsequent rubbishing of the experience in an article that claimed the electric car ran out of battery early and generally failed to perform in cold weather. Read more
That’s coming from CNBC who are suggesting Berkshire are going to hit them with a big bag full of $28bn.
Here’s the snaps from Reuters while we wait for something official waiting over, it’s official and the statement is below:
14-Feb-2013 12:47 – BERKSHIRE HATHAWAY INC BRKa.N TO BUY H.J. HEINZ CO HNZ.N FOR $28 BLN – CNBC CITING SOURCES
Live markets commentary from FT.com
German and French economies contract as Euro area GDP disappoints || Japan’s recession continued in Q4 || The BoJ maintained asset purchase programme size and rates || AB InBev makes offer to seal Modelo deal || Rolls-Royce names next chairman || Fat-cat referendum in Switzerland || Rocky road lies ahead in trade pact talks || US Treasury, banks, businesses criticise EU Tobin tax plans || FSA warns banks not to leave Libor || Rio Tinto falls into $3bn full-year loss || AMR board approves US Airways deal || CITIC buys stake in Australia’s Alumina for A$452m || Google sues BT over patent || Time Warner in talks to spin off magazines || ‘Abe trade’ boosts macro hedge funds || SAC Capital probe widened || Monte Paschi former finance chief held || Markets summary || Valentine’s day GDP massacre || Isda committee decision on SNS Bank CDS weird or what? || Exorcising eurozone ELA as we know it Read more
(Header credit to UBS’ Paul Donovan)
Flash estimates for euro area GDP below. Warning: they’re not pretty. Read more
Elsewhere on Thursday,
- Root causes of currency wars.
- David Graeber: Debt is bad, or something…?
- Beyond hydraulic policy. Read more
Japan’s economy failed to grow in Q4 || Asian markets higher on Abenomics hopes || BoJ continues as expected || US banks, Treasury, etc criticise EU Tobin tax || AMR-US Airways deal agreed || Google sues BT over patent || Macro funds do well on Abenomics yen short || CITIC buys stake in Australia’s Alumina || Barclays puts everything first Read more
ROUND-UP
Jack Lew placed tax reform “at the very top” of his priorities if confirmed as Treasury Secretary. Lew pledged to look at business tax cuts and brushed off questions on his past as a Citigroup executive, in a mostly placid Senate Finance Committee hearing on his nomination by President Barack Obama (Reuters, Financial Times). Read more
We’re confused about the restructuring credit event that the Isda determinations committee voted for on Wednesday. It took them three meetings to do it, and Bank of America Merrill Lynch doesn’t agree, but there you go.
Oh, and the Q&A document that Isda published about CDS written on Greece has a line that appears to be in contradiction to decision, but there you go… Read more
Yes the IMF calls for common eurozone deposit insurance, in this new banking union paper. But also look at what they suggest on emergency liquidity assistance:
Lender of last resort. The lender of last resort makes liquidity support available to solvent yet illiquid banks. Centralizing all LOLR functions at the ECB would in the steady state eliminate bank-sovereign linkages present in the current ELA scheme (see Box 1). This would require changes to the ECB’s collateral policy, as by definition euro area banks that tap ELA cannot access Eurosystem liquidity owing to collateral constraints. Until such time as all banks are brought under the ECB’s supervisory oversight, ELA would be sourced through both the ECB (for banks brought under its purview) as well as national central banks (for banks that remain under national supervision, albeit with adjustments made to the national ELA limits).
Which would be nothing short of a revolution. Read more
The currency war meme rumbles on as the G7 does its very best to avoid a coherent message amid arguments about whether drawing a distinction between “domestic objectives” that weaken a currency and just plain weakening it actually matters. Ho hum. Read more
SNS Reaal’s sub expropriation was a restructuring credit event after all, according to 14 of the 15 Isda determinations committee members on Wednesday:
Oh boo, the committee that decides on whether credit default swap contracts should payout appears to be having trouble reaching a conclusion about whether the nationalisation of SNS Bank counts as a “credit event”. While the quantity of swaps that hang in the balance is teeny tiny, the issue itself is a big deal because it reveals some of the problems that might crop up in future bank rescues and bail-ins of debt while demonstrating yet again that CDS don’t appear to do what a reasonable person would think they do. Read more
Live markets commentary from FT.com
Obama drive to ‘reignite’ US economy || Neither US party swallows a compromise || G7 fails to defuse currency tensions || Comcast in $16.7bn NBCUniversal buyout || Banks in capital race to top as Sweden’s 12 per cent rule sets pace|| Ailing Peugeot posts record net losses || Australia banks on housebuilding boost || Apple downplays Einhorn suit as ‘sideshow’ || Intel to launch internet-based TV service || Markets: Mixed opening of European trading, but stocks close to multiyear highs Read more
Older entries
1On cash hoarding
2Isda nationalisation of SNS Reaal a credit event? Yes it is
3Elon Musk vs The New York Times
4The non-precedent setting, own-law making, secretive CDS committee is having a seriously bad month
5Mi casa es all you're going to get
Show more6Did you hear the one about Rosneft's 500m barrel hedge?
7Buffett does Heinz
8Isda committee decision on SNS Bank CDS weird or what?
9Currency wars. You're doing it wrong.
10A Rosneft hedge distortion?
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