RSS feedAn exit strategy for the Fed
We have all the tools we need to achieve a smooth and effective exit at the appropriate time.
Ben Bernanke, Semiannual Monetary Policy Report to the Congress, March 1, 2011
Friday’s decent jobs report and accompanying hawkish cacophony have encouraged further talk about when the Fed will raise rates and revert to a place called normalcy.
Further further reading
For the commute home, where your very own recovery starts,
- The pieces of America’s recovery are falling into place (maybe).
- A Reuters special report on the West’s unwanted war with Libya.
- Q1 M&A,
US Markets Live transcript 1 Apr 2011
Markets Live chat transcript for the chat ending at 15:03 on 1 Apr 2011. Participants in this chat were: John McDermott Cardiff Garcia Neil Hume, FT Joseph Cotterill, FT JMGood morning from New York,
Centralised price discovery!
Behold a central pricing solution for illiquid assets… stuff like TruPS CDOs or, err, Irish bank loans.
Now that comes from independent valuation consultancy firm PF2 Securities Evaluation, so there’s more than a little self-interest here.
Non-farm payrolls up 216,000
Non-Farm payrolls rose by 216,000 jobs in March, according to the Bureau of Labor Statistics.
Analysts had been expecting an increase of 190k jobs in the month. The unemployment rate came in at at 8.6 per cent,
The perplexing US consumer
The more we read about recent US consumption activity, the less we seem to understand exactly what’s happening.
But that won’t stop us from trying. Get comfortable, folks — this will take a while.
Consumer sentiment
Certainly the discouraging news on consumer sentiment was coming in spades through the middle of this week.
Markets Live transcript 1 Apr 2011
Markets Live chat transcript for the chat ending at 11:30 on 1 Apr 2011. Participants in this chat were: Neil Hume, FT Joseph Cotterill, FT NHHola la Rabble NHand welcome to Markets Live
Stress-testing Ireland’s stress testers
BlackRock is really making a name for itself in financial crisis-related services — valuing the Fed’s Maiden Lane portfolio and undertaking the Irish banking stress tests too. But Ireland’s central bank also hired Boston Consulting Group (BCG) to supervise the stress testers,
Bank of Ireland – it lives!
The price action early on Friday morning:
No, that’s not an April fool.
Shares in Bank of Ireland really are trading higher.
And that’s because traders and analysts think there’s still an equity investment case and a chance government ownership can be kept below 50 per cent (if subordinated debt holders to play ball).
An MEP out to risk-weight the eurozone
Here’s a tip for all financial journalists and market participants.
To spot the next source of financial instability — simply identify the assets currently considered ‘safest.’ At the moment we’d argue those are covered bonds,
Tepco confusion
The latest kerfuffle about the future of Tokyo Electric Power Co, the power provider and operator of Japan’s crippled Fukushima nuclear power plant, began quietly enough, with a small report in the Mainichi Daily newspaper,
Irish loan losses, forbearance, and a bad feeling
We’re still working our way through the Irish banks’ stress tests results. But there’s already a conundrum in assessing the severity of the tests.
Severity being the essential variable here — a severe test underlines Ireland’s vulnerability to restructuring and makes the case to outside actors that they need to provide backstop funding,
Further reading
Elsewhere on Friday,
- Support is running out for the muni market.
- The entrepreneurial spirit returns.
- On blind bankers.
- The perception of the Sokol situation.
- Some cornography.
- Japan’s liquid fuel crisis.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Analysis: Chinese finance – a shadowy presence
With banks subject to Beijing’s tough credit and interest rate controls, a growing system of informal loans provides capital to the private sector but buoys inflation,
Snap news
Breaking pre-market news on Friday,
- Bank of Ireland working on initiatives to meet €4.2bn equity capital requirement; shares to resume trading– statement.
- Logitech warns on profits; blames weak retail sales in EMEA region — statement.
Further further reading
The “Further further readings” post usually runs in the late afternoon US time, but in this case you can file it under “we forgot to hit publish”. Doh! Or consider it a Tokyo special. Either way, sorry about this.
Ireland: does the fire sale start here?
You’ve already had the stress test results (more on those in a moment), here’s the Irish finance minister’s statement regarding what survives of Ireland’s banking system.
In short: a rump Bank of Ireland,
Who won the energy speech?
It would be easy to brush off President Obama’s “Blueprint for a Secure Energy Future” initiative and associated speech yesterday as the obligatory promise to lower dependence on oil in response to the latest surge in gasoline prices.
Crisis market metrics
Or, how well did the market do in judging banks’ health during the financial crisis? How accurate was the market stigma surrounding banks that might be tapping the Federal Reserve for help?
And so on.
Ireland’s stress test results [updated]
Here’s the full report, click image to open:
The bank recapitalisation grand total: €24bn
Allied Irish Banks: €13.3bn
Bank of Ireland: €5.2bn
EBS: €1.5bn
Irish Life & Permanent:
A first look through the Fed’s discount window
You’ve had the Primary Credit Dealer Facility data — ready yourself for the discount window stuff.
On Thursday the Federal Reserve released some 25,000 documents laying out just who tapped the Fed’s famous overnight facility between August 2007 and March 2010.
Viva, O’Vegas
As we wait for Ireland’s latest bank stress test results (due within half an hour at pixel time), a tidbit on methodology from the Irish Times:
BlackRock, the consultants hired by the Central Bank to verify the tests,
Why is the Vix so low?
This is the Vix — globally respected barometer of market fear:
But now count the peaks of fear.
One: International financial crisis. Two: Flash crash/European sovereign debt escapade. Three:
Crop shops
A chart from Citi showing how this morning’s crop report fared against expectations:
And a bit of commentary, emphasis ours:
USDA’s Prospective Plantings report released this morning has farmers planting slightly more acreage for corn and wheat than expected,
Sokol speaks…
… and when he looks back at Thursday’s interview with CNBC it might be with some regret.
When you are in a hole, stop digging etc…
Via Reuters:
SOKOL SAYS “I DIDN’T HAVE ANY INSIDE INFORMATION”
Lessons from the People’s Repository of China
Countries of the world take note!
When faced with falling demand for one of your nation’s top domestically produced crops (versus growing commodity import bills) follow the example of China. Stockpile!
The benefits of stockpiling can include:
