1) JPMorgan's Flash-Rally Theory Contains Message on Today's Market
(Bloomberg) -- Some 16 months after the "flash rally" in U.S. Treasuries blindsided Wall Street traders, little about what exactly went wrong remains resolved. The most common, albeit tenuous, explanation is that the futures market seized up that morning, creating a spillover effect into cash bonds that led to a frenetic 12-minute surge in prices. JPMorgan Chase & Co. analysts are now advancing a new theory, one they contend is a key to how to trade most effectively ...
2) Man Who Called Emerging-Market Rout Isn't Buying the Bull Case
(Bloomberg) -- If John-Paul Smith is right, some of the world's biggest investors are setting themselves up for a major disappointment. The London-based strategist, one of few to anticipate the slump in emerging markets that began in 2011, sees no sign of a turnaround and says the current environment resembles that of the late 1990s, when crises in Southeast Asia and Russia roiled the entire asset class. His stance clashes with bullish pronouncements from money managers ...
3) Lazard, AMP Shutter Asian Hedge Funds in Rising Wave of Closures
(Bloomberg) -- Lazard Asset Management and AMP Capital are the latest firms to shutter Asia-focused hedge funds. The asset-management unit of financial firmLazard Ltd. closed its $9.8 million Lazard Asia ex-Japan Equity Strategy and the Singapore-based portfolio managers have left, the firm said in an e-mailed statement. Separately, the Australian asset manager with roots in real estate and infrastructure has shut down its AMP Capital Asia Quant Fund, which held ...
4) Bond Vigilantes Slap Oil CEOs With Junk Tag on $258 Billion Debt
(Bloomberg) -- They have sold off hundreds of oil fields, eliminated thousands of jobs and slashed millions of dollars from capital spending and dividends. But in this unforgiving new world of $30-a-barrel oil, it's barely been enough. As U.S. oil executives from Anadarko Petroleum Corp. to Hess Corp. take drastic measures to weather the worst slump in a generation and cling to their debt ratings, creditors are already writing some of them off. ...
5) China Inc. Retreats From Dollar Bond Market With 50% Cost Saving
(Bloomberg) -- Chinese companies that rushed to the exit from the U.S. dollar bond market have few regrets. They've cut borrowing costs by about half while avoiding risks from a slumping yuan. Firms from the nation have redeemed $1.73 billion of overseas notes before maturity this year, jumping from $26 million a year earlier. Five of the six companies that called their bonds were builders. Sunac China Holdings Ltd. redeemed $400 million of 12.5 percent bonds due 2017 in ...
6) Glencore's Vanishing Mine Profits Send It Back to Trading Roots
(Bloomberg) -- Glencore Plc's billionaire Chief Executive Officer Ivan Glasenberg is having to trade his way out of a hole. With profits from his mining division evaporating, the debt-laden commodity company's reliance on trading jumped to an unprecedented 76 percent of earnings in the first half of last year. Ongoing losses in mining mean that percentage is likely to increase when Glencore reports results next week. Investors will be ...
7) Cheapest-Ever Chinese Banks Aren't Cheap Enough as Loans Go Bust
(Bloomberg) -- It's going to take more than record-low valuations to convince David Herro that now's the time to buy shares of Chinese banks. The manager of about $30 billion at Harris Associates LP, who's been scouring global markets for beaten-down stocks during this year's selloff, says lenders from Asia's biggest economy aren't cheap enough after they sank to all-time lows relative to net assets, earnings and dividends this month. While such gauges of ...
8) Ex-Deutsche Bank Trader Zhou Admitted to Mismarking CMBS Trades
(Bloomberg) -- Former Deutsche Bank AG trader Arnie Zhou admitted to his supervisor at the bank that he was responsible for inaccurate valuations tied to bonds backed by commercial mortgages, according to a regulatory filing. Zhou resigned Nov. 2 after Deutsche Bank questioned the authenticity of documents he gave to the bank's internal valuation department, according to a filing with the Financial Industry Regulatory Authority. The bank reported the ...
9) Negative Rates Trigger Swedish Debt Warning Amid Policy Backlash
(Bloomberg) -- While the jury is still out on the power of negative rates to revive inflation, there seems to be little doubt as to what the policy is doing to private debt burdens. In Sweden, where the central bank this month cut the benchmark repo rate to minus 0.5 percent, the financial regulator is warning that rarely before have households been so exposed to shifts in borrowing costs. "Monetary policy is extremely potent now," Erik Thedeen, director-general of ...
10) India Best-of-Weakest Status Makes Loan Bankers Tata's Big Hope
(Bloomberg) -- India's biggest conglomerate is asking loan bankers for almost as much money as global fund managers have pulled from the nation's stock and bond markets this year. Tata Communications Ltd., Tata Motors Ltd., Tata Power Co. and Tata Steel Ltd. are seeking to borrow a combined total of about $2.5 billion in syndicated loans. That compares with the $2.7 billion that foreigners have pulled from the nation's equity and bond markets this ...
11) Japan Builds $124 Billion Cash Hoard Even as It Cuts Treasuries
(Bloomberg) -- Japan has stockpiled a record amount of cash at central banks as part of its currency reserves, after selling Treasuries, as policy makers around the world adjust to rising U.S. interest rates and falling bond-market liquidity. Foreign-exchange deposits in the vaults of overseas institutions ballooned to $124.1 billion as of Jan. 31, from $14 billion at the end of 2014, according to data from Japan's Ministry of Finance. That's the ...
12) Mafia Profits Tempt Marxist Rebels Ditching 50-Year Struggle
(Bloomberg) -- In January, parts of the city of Buenaventura on Colombia's Pacific coast began observing a 10 pm curfew. The source of the order was not the mayor or police but a drug-running extortion gang known as the Urabenos. What is especially noteworthy about the gang is that its members come from a defunct right-wing paramilitary group which cut a deal with the government to disband a dozen years ago. The move was acclaimed as a key step in restoring the rule of law ...
13) SocGen Said to Cut 5 From New York Office in Fixed-Income Cull
(Bloomberg) -- Societe Generale SA cut at least five people in its New York office, primarily in U.S. government bond sales and trading, as investment banks globally grapple with increased regulation and declining profitability from fixed-income businesses. The company, one of 22 primary dealers that trade with the Federal Reserve, dismissed senior rates salesman Chris Brighton, senior U.S. Economist Brian Jones, and Treasuries trader Sean Murphy, according to ...
14) Indonesia Refinery Restart Shows Long Road From 1998 Asia Crisis
(Bloomberg) -- Just as rating companies see rising risks for defaults in Asia, one Indonesian refiner may finally be emerging from the shadow of 1998's currency collapse. PT Trans-Pacific Petrochemical Indotama, a project that stalled during the Asian crisis, resumed operations last quarter and is now running at about 70 percent of its capacity to produce gasoline, said President Director K. Denni Wisnuwardani. The earnings are being used to pay operating ...
15) OPEC of Maple Syrup Under Fire as Farmers Turn to Black Market
(Bloomberg) -- It's boom time for Canadian maple-syrup producer Ray Bonenberg, who is expanding sap output from his tree farm near Pembroke, Ontario. About three hours away in the province of Quebec -- the Saudi Arabia of syrup -- producers like Jim Dempsey can only watch in frustration. Dempsey's output is capped by the Federation of Quebec Maple Syrup Producers, a kind of government-sanctioned cartel that accounts for 71 percent of world supply. The Federation has ...
16) Distressed Retailers Turning Into Pariahs as Financing Dries Up
(Bloomberg) -- Struggling U.S. retailers are finding it harder to get a lifeline. Fewer shoppers are going to the mall -- opting instead to spend their money on experiences and online orders -- and there's less access to credit that might help troubled retailers stay solvent. That means distressed apparel sellers and other chains are probably headed for another year of bankruptcies and liquidations in 2016, according to panelists at an event ...
17) Judge Clears Way for SunEdison's $1.9 Billion Vivint Deal
(Bloomberg) -- Billionaire David Tepper can't block a key part of SunEdison Inc.'s $1.9 billion buyout of residential solar-power provider Vivint Solar Inc., a Delaware judge ruled Thursday in rejecting the hedge fund manager's claims the deal isn't fair to some investors. Officials of Tepper's Appaloosa Management LP "couldn't prove" the terms of the Vivint acquisition harm shareholders in TerraForm Power Inc., a separately ...
18) China's Pricey Buying Spree Shows Force of Desire for U.S. Firms
(Bloomberg) -- After a record-breaking 2015, dealmakers have pulled back this year as market volatility spooks both buyers and targets. But for U.S. companies still intent on cashing out, China is playing the white knight. Already this year, Chinese buyers have proved they're willing to pay high prices for U.S. targets -- often outbidding domestic suitors -- even as equity markets in both countries swing wildly. After just 56 days of the year, Chinese ...
19) Russia Seen Dodging Political Storm as Putin Rides Out Recession
(Bloomberg) -- As Russia hunkers down for the second year of recession, most economists say a parliamentary election in September won't unleash the kind of protests that rattled the country in 2011. There's a 30 percent chance that economic distress will translate into political unrest, according to the median of 27 estimates in a Bloomberg survey. Just six of the economists see at least a 50 percent probability of upheaval. Russia, one of only ...
20) Iran Seeks Oil Barter as European Buyers Face Banking Hurdles
(Bloomberg) -- Iran is offering to swap exports of crude oil for imports of refined fuel as some European customers struggle to find banks to process payments, a sign the Middle Eastern nation is still having difficulty regaining markets since the removal of sanctions. The National Iranian Oil Co. is resorting to barter because financial restrictions still impede trade, said three officials who asked not to be named citing company policy. Hellenic ...
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