RSS feedBack to the BISTRO for today’s securitisations — Part 1
The airwaves are once again aflutter with tales of the “shadow banking” sector, owing to the chief of the relatively new Financial Stability Board.
As the FT’s Tracy Alloway also recently reported, the sector was already back to its pre-crisis size at the end of 2010 at a healthy $60,000bn of assets.
This (relatively) Inegalitarian Isle
This graph is from this powerpoint — part of a presentation by Alan Krueger, chairman of Obama’s Council of Economic Advisers.
So it has been used to illustrate American inequality and its effect on inter-generational social mobility.
See, ratings do matter
Note three year Portugese paper on Monday…
The yield topped 18 per cent just before pixel-time, with Portuguese sovereign debt generally suffering after the S&P downgrade on Friday.
Portugal has seen worse.
Schrödinger’s bonds
Just like Schrödinger’s cat, a fixed income security can be in two states at any one time.
Until tested in the market the bond can be considered both repo-able or lend-able.
The condition is decided upon by the observer,
Japan’s positive if unreliable indicator
In this sea of bad news, FT Alphaville would like to highlight a rare positive indicator — Japanese machinery orders in November.
They soared 14.7 per cent compared to the previous month beating expectations by nearly 10 per cent.
Eye-catching ECB liquidity number du jour
Note this comes from Credit Suisse’s equity strategists… but we think this is a forecast worth passing on all the same:
The stigma of borrowing from the ECB appears to have been removed as signalled by ING and Rabobank’s willingness to use the facility.
Markets Live transcript 16 Jan 2012
Markets Live chat transcript for the chat ending at 12:03 on 16 Jan 2012. Participants in this chat were: Paul Murphy Bryce Elder/FT Joseph Cotterill, FT PM11.00 PMGood morning and welcome
China’s foreign reserves not so hot
China’s first quarterly decline in its forex reserves since 1998 has been described as a result of “hot money” leaving China. But there are a few other reasons — probably bigger ones.
Firstly, though,
A-A-A… staying alive, staying alive
How significant is the downgrade of France by Standard & Poor’s?
According to some commenters, like the WSJ’s Simon Nixon, not that significant.
But one market which could very well feel an impact it turns out is the repo market.
Carnival drops
London shares in the owner of the Costa Concordia were down 18.5 per cent at pixel time:
Related links:
Carnival’s profit warning – Carnival
Concordia disaster revives question of ship size –
Further reading
Elsewhere on Monday,
- Bank of America has a “Chief Image Officer.”
- Why the Fed’s real error was in 2008, not 2006.
- S&P’s downgrades — the “convergence play” dies, again.
- Was S&P downgrading the euro itself?
- Bankers vs private equity:
Pink picks
Comment, analysis and more from Monday’s FT,
Edward Luce: We’re back to the phantom future
We may be entering that economic twilight zone again, writes Luce. Last week the cognoscenti were enjoying their annual celebration of the forthcoming US recovery – an event dating back to 2009.
Snap news
Breaking pre-market news on Monday,
– Carnival comments on the Costa Concordia – statement
– Board battle at Victoria – statement
– Tottenham Hotspur North London scum cleared from AIM – statement
– Phytopharm reportedly tackling amyotrophic lateral sclerosis – statement
Corporate: Robert Wiseman,
FTfm on AV
Some highlights from Monday’s FTfm.
Call for inquiry after losses at Arch Cru
Industry figures and members of parliament are calling for a crackdown on complex fund structures, as details emerge of
RBS on those S&P downgrades
A quick summary of Jacques Cailloux’s thinking on the Euro sovereign debt downgrades — Caillou being chief european economist at RBS…
The market implications of the ratings review are worse than a whole downgrade of the region owing to the increased political wrangling,
[SFTW] Salmond is on the hook
Alex Salmond looks smug as a bug right now. His popularity in the Scottish polls is approaching that of Nicolai Ceausescu when he was running Romania. He should be careful what he wishes for. His pick’n'mix approach to Scottish independence plays straight to the xenophobic basic instinct of the complaining Scot,
Further further reading
For the commute home,
- EU to jobless youth: Go home!
- There’s an art bubble in China.
- US money market funds were already fleeing French banks. Guess what’ll happen now.
- Sarkozy braced for the political impact of the downgrade.
Quick promo for Neil C’s blog
SFTW will be up here later today, but if you want a regular dose of the acerbic Neil Collins best bookmark his blog.
US Markets Live transcript 13 Jan 2012
Markets Live chat transcript for the chat ending at 16:05 on 13 Jan 2012. Participants in this chat were: Cardiff Garcia Joseph Cotterill, FT CGMorning! JCHello JCAnd welcome to Downgrades Live
US Markets Live! 10am New York, 3pm London
The curious case of ECB deposits
Bank of America Merrill Lynch analysts have taken objection to everyone interpreting high use of the ECB’s overnight deposit facility as an indicator of ‘bank hoarding’.
It is just not so, they say.
Downgrade Friday
RTRS-SENIOR EURO ZONE SOURCE SAYS S&P SET TO DOWNGRADE SEVERAL EURO ZONE COUNTRIES LATER ON FRIDAY, GERMANY IS NOT ONE OF THEM
A year in sovereign paradigm shifts
Every now and then we see credit default swap spreads out of the corner of our blog and think: “What?!!! When the hell did that happen?!!”
So FT Alphaville looked up when some of that happened, and we wanted to share our Top Five with you.
Meanwhile, in the largest US bank by assets…
Mortgage production pretax income was $161 million, a decrease of $392 million, or 71%, from the prior year. Production-related revenue, excluding repurchase losses, was $1.1 billion, a decrease of $269 million,
Clients spotted in the CDS market
“Over time we’ve seen a secular increase in the use of CDS and a decrease in the use of bonds as a trading tool,” he said. “Last year we saw bonds being placed at new issue more as a buy-and-hold investment as fund managers found their ability to trade out of bond positions in secondary markets much more limited.”
That’s Niall Cameron,
Signal failure
One cannot fault the Chinese walls at Merrill Lynch, joint corporate broker to Invensys.
We have upgraded Invensys to a Buy, with a price target of 285p. While pressure on Controls will potentially continue in the short term and H2 Rail margins could be at risk,
Markets Live transcript 13 Jan 2012
Markets Live chat transcript for the chat ending at 12:07 on 13 Jan 2012. Participants in this chat were: Paul Murphy Bryce Elder/FT PMHello there PMMorning PMWelcome to Prompt ML
Dealing with Greece’s biggest holdout
If you didn’t believe us that the European Central Bank will do everything it can to achieve seniority for its Greek bonds in the country’s debt restructuring, hopefully Thursday’s ECB press conference convinced you.
On redeeming the war loan
From the minutes of the UK’s Debt Management Office consultation with Gilt-edged Market makers and investors held on January 12:
There were also a number of calls for clarification around the prospects for the redemption of 3½% War Loan,