Links: 2013-02-13
News links for 13 February 2013
“The original party that posed the question of whether a credit event has occurred with SNS did so anonymously. While the credit derivatives industry would perhaps like the casual observer to have the impression that this over-the-counter market is becoming more transparent — thank you, Dodd-Frank — the Isda committee passed a rule change in October 2009 that allows “general interest questions” to be passed to the committee without having to identify oneself.
In the case of SNS Bank, given the headache it’s causing, we’d bet it wasn’t a bank that raised this. We’d like to think their in-house counsel would have warned them against it, given the difficulty it was likely to cause and is seemingly now causing.
There is likely only tens of millions of net exposure on the credit default swaps written on the entity. Consequently, we’re picturing a cross buyside shop that had bought protection on the subordinated debt thinking it’d pay off nicely and now it looks like it could be worthless.”
The history of Australian property values | MacroBusiness
“For those interested in the Australian residential property market, below are a collection of figures illustrating long-term trends. Housing prices and land values are compared to a basket of fundamental metrics. Australians are fortunate because much data on real estate and financial markets are publically available, going into depth not seen in other countries.”
Central Bank’s Patrick Honohan warns on mortgage arrears – Independent.ie
“Patrick Honohan warned that household financial distress is at unprecedented levels in Ireland.
He said new personal insolvency legislation made it more important than ever for banks to help struggling borrowers reach more sustainable debt levels.
“Banks will have to act more proactively and liberally in respect of those who cannot realistically pay, if they are to avoid the costs and inefficiencies of having to respond to PIA (personal insolvency arrangement) proposals or bankruptcy cases,” Mr Honohan said.”
BBC News – Mobile phone sales fell in 2012, suggests study
“Global sales of mobile phones fell in 2012 compared with the previous year, according to a report from research company Gartner.
It said 1.75 billion handsets had been bought, marking a 1.7% decline.
Analysts at the firm suggested “tough economic conditions” had been partly responsible for the drop.
It follows official data from Spain indicating its number of mobile telephone and datacard subscriptions fell by 5% over the same period.”
What Nextdoor is doing right with hyperlocal and Patch is doing wrong — Tech News and Analysis
“Most of the startups and networks focused on hyperlocal or community news and information try to be as open as possible, but Nextdoor is taking the exact opposite approach and making the barrier to entry for users as high as it can.”
“Chinese mobile maker Huawei rose to third place in the worldwide smartphone rankings for the first time in the fourth quarter of last year, according to analyst Gartner’s lastest global mobile report (Canalys and IDC have also pegged Huawei in third in Q4). In the full year 2012, Huawei sold 27.2 million smartphones to end users, according to Gartner up 73.8 per cent from 2011. However the gap between number three in the global smartphone rankings and the top two, Samsung and Apple, is more like a gulf.”
Barclays vows fresh course, axes 3,700 jobs | Reuters
“Barclays’ new chief executive pledged a fresh course for the British lender on Tuesday, axing at least 3,700 jobs and pruning its investment bank as he seeks to rebuild its reputation and boost profitability after a series of scandals.”
ING cuts thousands more jobs at retail bank | Reuters
“Dutch financial services group ING (ING.AS) announced deeper job cuts in retail banking as it prepares to separate its banking and insurance operations under the terms of a state bailout.”
Yanis Varoufakis: Are Ireland and Portugal out of the Woods? (Updated) « naked capitalism
“But as the champagne corks are liberated, and the merriment’s din fills our ears, it is worth maintaining a connection with reality. And the reality is particularly stark: There has been no progress whatsoever! Indeed, the Eurozone crisis is getting worse the calmer the bond markets seem and the more confident the commentariat is becoming that Ireland and Portugal are out of the woods. If the resolution of the Euro Crisis was all about replacing EFSF-ESM funding with the ECB, without decoupling the banking from the debt crisis and while a vicious asymmetrical recession is eating into the heart of Europe, then of course the Crisis is over. Alas, it was never about that. And so the good ship Eurozone sails on, taking water in at an increasing rate that drowns more and more of those below the decks, while its first class passengers, pacified by a cunning captain, are downing the champagne.”
Full text of GOP response to State of the Union – MarketWatch
“The following is Sen. Marco Rubio’s response on behalf of Republicans to President’s Obama’s State of the Union address.”
Full text of Obama’s State of the Union address – MarketWatch
“The following is the prepared text of President Obama’s State of the Union address”
Hunt for Yield Sows Junk-Bond Boom – WSJ.com
“Last month, European companies with a “junk” rating issued nearly $16 billion in bonds, the most ever in any January. Nearly $8 billion came from the euro zone’s most troubled countries—Spain, Greece, Portugal, Italy and Ireland—by far a record for the month and five times the amount issued in those countries in January 2012.
“It’s been a radical change in January,” says Anil Jhangiani, director for ratings of industrial companies for Fitch Ratings. “There is this hunt for yield. It started with the biggest issues, then it went down the rating spectrum.””
CEO Marissa Mayer Says Yahoo-Microsoft Search Deal Is Underperforming | TechCrunch
“The deal has not delivered the market share gains or revenue boost that was expected, Mayer said. Yahoo and Microsoft inked the 10-year search partnership in 2010 as part of an effort to challenge Google. But Google retained a 66.7 percent share of the U.S. market as of December, almost the same as its 66.6 percent share two years ago, according to ComScore. Microsoft lagged behind with a 16.3 percent share and Yahoo had 12.2 percent.”
Apple Tops Japan’s Handset Market For The First Time, Says Counterpoint Research | TechCrunch
“Thanks to its complicated regulatory structure and the continuing popularity of web-enabled feature phones, Japan’s mobile market is difficult for foreign companies to penetrate. But Apple has finally managed to work its way to the top, according to a report by Counterpoint Research (h/t TNW).”
Here’s a Quick Way to Fire Up Your Motivation
“But when you start to think about it, backup plans don’t just make sense as, well, backup plans, but also as a means of driving you forward at the precarious early stages of a project.
That’s because our motivation to succeed is heavily tied in with our expectations of success. No one drives to a shop that they are pretty sure is closed. What feeds our motivation is knowing that we have a good chance of achieving the goal.”
Oh look the CDS market isn’t working again | FT Alphaville
“The question of an SNS credit event, and potential failure to hold a meaningful auction is causing some excitement, demonstrating a certain lack of faith in the Isda duct tape. But that’s us being nice about it. If we were being mean, we’d say it was part of a lobbying effort by some to ensure that European politicians tweak their bail-in legislation to ensure the smooth operations of credit derivative markets because banks like trading the instruments ever so much.”
ISDA to Meet on SNS Reaal CDS Compensation – The Euro Crisis – WSJ
““Unless these [bank bail-in] issues are addressed, we could see a significant decline in bank CDS liquidity, with negative consequences for the bank bond market as a result,” Citigroup analysts said in a note to clients Monday.”
Beleggers SNS mikken op schadeclaim wanbeleid | Het Financieele Dagblad
Is it finally ‘Over over there?’ | GlobalPost
“US lecturers, administrators, soldiers and their families have lived in and around the German-Austrian border for 60 years — some of them stationed at American military bases, others at institutions such as the NATO School and the larger Marshall Center for European Security Studies in Garmisch-Partenkirchen.
Still others staff a myriad of support facilities such as the Garmisch Family and Morale, Welfare and Recreation Division, or spend time here as guests at the 338-room Edelweiss Lodge and Resort.
The US military’s gold-plated “footprint” here went largely unquestioned for decades, part of the trappings of America’s superpower status and its victory over Hitler, whose own Alpine retreat is just a quick Panzer ride down the road.
But with Washington alight with talk of the government’s impending automatic spending cuts to everything from Medicare to missiles, some say maintaining a force of more than 88,000 American troops here — along with the accompanying schools, housing, recreation centers and ski resorts — isn’t in keeping with the times.”
Monetary policy: The wisdom of Scott Sumner | The Economist
“It would be irresponsible, in the wake of the great crisis and recession, not to reflect on the policy failures that contributed to the disaster and learn how to do better in the future. Looking back over the whole of the past century, however, it is far from obvious that a greater willingness to use monetary policy to rein in boisterous credit markets would lead to better overall outcomes. It is certainly possible! But one should be realistic about the ability of central bank officials to spot and respond to dangerous credit conditions (and only truly dangerous credit conditions). And one should be aware of the potential of too-tight monetary policy to generate surprisingly large and persistent economic costs. There are worse things than overheating credit markets. Every once in a while a central bank forgets that, generally to its sorrow.”
Stocks Are Set for a Possible Repeat of 1987! Says Marc Faber | Breakout – Yahoo! Finance
“”Either the market is going to correct more meaningfully now or we have a shallow correction and a continuously rising market until July or August,” Faber told me via phone from Thailand. If stocks don’t pullback soon, he says we risk a repeat of 1987 when stocks rallied 40% into summer only to collapse 41% in 2 months.
“In March of 2009 everything looked horrible, now nobody can find a reason why stocks could go down,” Faber claims. “We ask that you should buy stocks when everything looks horrible, you shouldn’t rush to buy them when everything looks perfect.””
Goldman Sachs Downgrades Global Equities – Yahoo! Finance
“”We think the equity market will need time to digest the recent gains,” Goldman said in a research note, although its long-term view is still pro-risk
“Asset prices have moved a long way and are now very close to our 3-months targets.””
Bridgewater Bets on Stocks as Cash Moves Into Market – Bloomberg
““You want to be borrowing cash and hold almost anything against it,” Prince said, according to a transcript of the call obtained by Bloomberg News. “We are at a possible inflection point right now with respect to the pricing of economic conditions in markets and then the actual conditions that are likely to occur.””
L’accord sur l’emploi en route vers la loi – Libération
Hollande: la France pourrait réviser sa croissance “dans les prochains jours”
“Nextdoor, the company that lets people create private social networks with others who live in their local neighborhoods, has raised $21.6 million in a new funding round led by Greylock Partners with the participation of existing investors Benchmark, DAG Ventures, Shasta Ventures, Allen & Company, Pinnacle Ventures, along with new investors Bezos Expeditions and Google Ventures.”
Iran claims conversion of uranium to fuel – FT.com
“Iran confirmed that it is converting medium-enriched uranium into reactor fuel in a move that may partly allay international concerns over its nuclear stockpiles and add more time for diplomatic negotiations.
Ramin Mehmanparast, Iran’s foreign ministry spokesman, told reporters on Tuesday that some of the country’s stock of 20 per cent-enriched uranium would be committed to a facility called the Tehran research reactor, which needs fuel for medical purposes and production of radio isotopes.
Once it transfers part of its stock of more highly enriched uranium to the reactor, it is hard for the relevant stock to be used for a nuclear weapon, something western powers believe Iran is secretly committed to acquiring. Iran carried out a similar move last autumn, which also reduced tension over its programme.”
Hollande urged to cut public spending – FT.com
“France must make big cuts in public spending after imposing “massive” tax increases over the past three years, the country’s national auditor has said, warning the government it is likely to miss its budget deficit target this year.
In an annual report that makes sobering reading for François Hollande’s socialist administration, the Cour des Comptes said over-optimistic growth projections and a likely shortfall in tax receipts meant that the 2013 target of reducing the nominal deficit to 3 per cent of output “has little chance of being met”.”
Japan’s economic minister wants Nikkei to surge 17% to 13,000 by March | The Japan Times
“Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.
“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech.
The Nikkei 225 stock average, which last week climbed to its highest level since September 2008, finished at 11,153.16 on Friday.”
Frankreich – Hollande will Gesetz gegen Werksschließungen – Wirtschaft – Süddeutsche.de
French President Francois Hollande wants to prevent companies that are making good profits from being permitted to lay off workers by passing a law which forbids this. The employers’ association is against this.
A physical vs forward commodity market disconnect | FT Alphaville
“A strange thing is happening in commodity markets.
As we already commented on Twitter, what the physical supply and demand situation is telling us is getting increasingly disconnected from what the forward and futures markets are saying.
The curve, in short, is feeling mispriced.
And not in the, “oh the market has corrected for too much supply but the forward curve has not caught up” way, but rather in the “physical market in many commodities is still looking weak, if not weaker, yet the curve is going the opposite” way. Weird.”
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