RSS feedWho’s bluffing about a Grexit?
The recent utterings from Europe’s political elite regarding a Greek exit from the euro and reports that the IMF is ready to walk away have been hard to read. To what extent are these warnings pure postulation? The timing is rather suspicious,
There is a disturbance in the UK funding curve
FT Alphaville has already referred to the weird phenomenon of unsecured funds trading through secured funds in the UK this week, as reported by ICAP.
By definition, secured borrowing should be cheaper than than unsecured.
Implementation, implementation, implementation
Then and now the key to the door of the eurozone’s success survival, especially given the currency union’s propensity for contagion.
There may be a relief rally because of utterances by European Central Bank President Mario Draghi,
MMFs flee. Again.
Earlier this year, while LTROs-have-saved-Europe sentiment was still a (fleeting) thing, US money market funds began gently easing back into eurozone banks.
But as we noted then, it was fickle money,
How things change, China FX manipulation edition
Mitt Romney, aspiring US president-to-be, has notoriously declared that if he ever takes office he will immediately name China a “currency manipulator”.
This, of course, is an ironic turn of events,
Top quant to next generation: you suck
OK, who woke up on the wrong side of the fat-tailed distribution?
It would appear that top quant Jesper Andreasen did. Here, according to Risk Magazine, is how the head of quantitative analytics for Danske Bank views recruiting the next generation (emphasis ours):
Draghi on *that* transmission mechanism
Some interesting comments via Reuters from Draghi on Thursday (H/T Marc Ostwald at Monument Securities):
11:13 RTRS-ECB’S DRAGHI SAYS IF PREMIA ON GOVT BORROWING HURT MONETARY POLICY TRANSMISION, THEY COME WITHIN OUR MANDATE
And from Bloomberg:
Markets Live transcript 26 Jul 2012
Markets Live chat transcript for the chat ending at 11:14 on 26 Jul 2012. Participants in this chat were: Bryce Elder/FT Tony Tassell
BEMorning.
TTgood morning
BEWelcome,
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
Grexit chances now at 90%: Kate picks up on Willem Buiter’s latest note, which sees the Citi chief economist predicting a Greek eurozone exit is now almost a certainty as is a sovereign bailout for both Spain and Italy.
Buiter’s now predicting Grexit probability of 90%
Citi’s iconoclastic chief economist Willem Buiter and team are seeing a very high likelihood of a Greek eurozone exit in the not-too-distant future, and a sovereign bailout likely for both Spain and Italy this year.
Further reading
Elsewhere on Thursday,
- The slow decline in earnings expectations.
- ‘If Romney wins global trade will collapse’ and more Mish predictions.
- Talk from the retirement couch is cheap.
- BBA,
The 6am Cut London
Nomura’s CEO and COO will step down to take responsibility for a widening insider trading scandal at the Japanese bank, according to the Nikkei. Kenichi Watanabe and Takumi Shibata had faced growing criticism over their handling of a series of insider trading incidents,
The Closer
ROUND UP
Investors remained wary as stocks vacillated between positive Euro bank news and missed earnings from Apple. The S&P 500 finished the day down 0.03%. However, the Euro made up some of its losses,
An early FOMC preview: the menu of options
You can consider this a preview of both next week’s meeting and the one in September, as various reports have indicated that he Fed may wish to wait for more economic data before deciding what to do next.
Risk premium or deflation charge?
FT contributing blogger Gavyn Davies recently wrote about the impact of what he called a disaster risk premia on bond yields — something the FT’s Gillian Tett has also followed up on here.
In both cases,
Sandy Weill regurgitates 13-year old cake
Said Wall Street legend’s barfage took place on CNBC:
“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans,
US Markets Live transcript 25 Jul 2012
Markets Live chat transcript for the chat ending at 15:05 on 25 Jul 2012. Participants in this chat were: Cardiff Garcia Joseph Cotterill, FT CGHello! CGRabble, make yourselves known
Reminder: US Markets Live at 10am New York, 3pm London
Just a reminder that after a few weeks of bouncing around from one time slot to another, we’re back to our normal starting time of 10am EST. On the menu for today is a roundup of earnings: Apple, Caterpillar,
France is a lot like Greece − or is it, really?
Is France facing a future Greece-style debt crisis? Er, maybe — so long as you ignore the difference in their government bond yields and just use debt-to-GDP projections made in a working paper from 2010.
The reverb from Shanghai rebar
Shanghai rebar, the most-traded steel futures contract, hit a 2012 low last week and is showing little sign of letting up. Are iron ore prices — already bumping around near the $120/tonne floor — about to follow rebar?
Nomura says,
UK GDP: uh oh, edition (with added Gilt weirdness)
Hysteresis indeed (click through the pic for the full report):
We might also add the UK’s yield curve to this discussion, where 2-year borrowing costs just hit a record low:
If you’re confused by that Gilt picture,
Markets Live transcript 25 Jul 2012
Markets Live chat transcript for the chat ending at 11:08 on 25 Jul 2012. Participants in this chat were: Bryce Elder/FT Izabella Kaminska
BEGood morning.
BEWelcome to Markets Live, FT Alphaville’s news thing and whatnot.
The (early) Lunch Wrap
Good morning New York…
FT ALPHAVILLE
For a few dollars more in China: We recently argued that there’s a new trend emerging in China’s foreign exchange operations — the state is becoming a net seller of foreign currencies,
For a few dollars more in China
A while ago, we dared to suggest that a new trend was emerging in China’s foreign exchange operations. Instead of being a net buyer of foreign currencies from the market — and conducting monetary policy operations in line with that position — the Chinese state was becoming a net seller of foreign currencies onto the market,
Further reading
Elsewhere on Wednesday,
- Does Europe even have a panic button?
- Jim Rogers vs Hugh Hendry and Albert Edwards.
- Meanwhile, in Legoland…
- “And this one time, at CFA camp..”
- An Izzy-inspired blog on abundance.
The 6am Cut London
Apple shares fell 6% in after-hours trading after its 3Q earnings missed consensus forecasts. Apple’s revenues of $35bn compared with analysts’ estimates of around $37.2bn, while earnings of $9.32 per share were also below forecasts of about $10.32.
The Closer
ROUND-UP
The US S&P 500 ended the trading day down 0.90 per cent despite a late rally, while Spanish yields climbed yet again to euro-era highs and the outlook for US corporates worsened with poor results and earnings forecasts from UPS and .
Apple Q3 Earnings
Big disappointment with today’s earnings report from Apple….
Analysts were expecting Apple to report sales of $37.2 bn and earnings per share of $10.36. Instead Apple reported sales of $35bn and EPS of $9.32.
The academics on QE… for now
We’ll be back later with a proper preview of next week’s FOMC meeting, but for now here is something to argue about:
1. QE1 was more effective than QE2.
2. It is easier to find and quantify QE’s effect on Treasury yields than to identify and measure QE’s effect on real economic performance.
Only fools pay tax, Greek edition (encore)
The euro crisis spotlight may be focused on Spain and the larger euro members this week, but it’s unlikely to be long before it swings right around to Greece. Again.
It seems that further EU/IMF loan disbursements to Athens are not likely before September.
