You can’t get only good news after the close. Google beating estimates and stock surging, but Fitch just downgraded several of the biggest Investment Banks.
Fitch Reviewing Global Trading and Universal Banks; Places Seven on Rating Watch Negative
In conjunction with a broad assessment of the ratings for the largest banking institutions in the world, Fitch Ratings is conducting a review of the global trading and universal banks in its rating portfolio. As part of that review, Fitch has placed the Viability Ratings (VRs) of seven and the long-term Issuer Default Ratings (IDRs) of six global trading and universal banks on Rating Watch Negative. At the same time, Fitch has placed the short-term IDRs of four of the banks on Rating Watch Negative.
As our readers know, we have covered the HFT space extensively during the past time. More and more people are acknowledging the HFT phenomenon, and now we get sporadic articles in the mainstream media popping up. Below from FT.
At one point during the day no fewer than 6.1m data messages per second were being pinged around US trading venues, according to industry data complier MarketDataPeaks.com. That was nearly 600,000 messages per second higher than the previous record, which had only stood since August, as global markets convulsed amid US and European growth and debt fears.
Yet that small footnote contains a neat picture of the speed and market complexity that regulators around the world will have to monitor and judge in coming years.
Full article here.
Guest Post by World Complex. Today we present a plot of the Case-Shiller index (an inflation-adjusted index of US house prices) against US real interest rates over the past 60 years. Inflation data from this site.
The other data came from Robert Shiller’s data site. Unlike the last plot, the real interest rate here was based on the difference between the long rate (reported in the Shiller data file) and the CPI (reported on the inflation site above).
These guys blew a bubble of astounding proportions.
Silvio is getting more desperate by the day it seems. Italian people are suffering under the mountain of debt, youth unemployment is at very high levels, and politics still run by one man. With the inevitable default/big haircut in Greece, focus will shift once again to Italy. Today we get increasingly desperate news from Silvio such as “there is no alternative than keeping Silvio” etc. Beside giving Italy talk shows with beautiful ladies, what has Silvio actually done? The Economist report from earlier this year, great reading on the Italian mess here.
What about that debt under Silvio?
Guest Post by Macro Story.
Wells Fargo published a report titled “Why Long-Term Investors Should Consider Buying Stocks Today.”
However as CNBC is quoted “Wells is among a number of Wall Street firms that have scaled back their portfolios’ exposure to equities in the past month, shifting away from stocks and into fixed income and cash.”
Markets trading in a risk off mood today. Volumes are light, but the moves are rather big. With volatility crushed over the last days, people will start feeling nervousness creeping up again. As usual, people have sold volatility in “panic”, and will be very surprised if we see SPX 100 handles lower. We believe yesterday was a nice last short covering panic.
Below some short term charts, and for those saying HFT don’t trade currencies, review the charts below…
SPX Trend Channel, market is losing steam.
Guest Post by Sturdyblog;
“This isn’t how a great nation was built. Britannia didn’t rule the waves with arm-bands on.” David Cameron 5 October 2011
Brilliant stuff, right? Evocative, inspiring, witty. Also, inaccurate.
I apologise for robbing you, dear reader, of this romantic illusion, but Britannia was wearing arm-bands; great big ones. On her left arm she was buoyed by slavery and the oppression of the working classes at home; on her right the exploitation of subjugated colonies abroad.
And, ultimately, this is what Cameron’s blueprint for our future requires a return to. He said recently in Europe “Some of my fellow leaders complain that it’s all about markets and speculators, but none of us are proposing to change the market system.” But that system can only function when sitting on a cushion of human misery. Cameron’s ideas do not look to the future. They sigh with nostalgia towards a Dickensian past.
Don’t believe me? Read on.
Three bilateral trade agreements passed the US House of Representatives and Senate on Wednesday. But the votes came with a sense of relief rather than celebration from their supporters, and resignation rather than anger from their opponents, http://ftalphaville.ft.com/thecut/2011/10/13/701141/congress-agrees-trade-agreements/
Apple has won an important legal battle in a Sydney court to block rival Samsung Electronics from selling its Galaxy Tab 10.1 in Australia ahead of the crucial Christmas shopping season, the FT reports. In a blow to Samsung,http://ftalphaville.ft.com/thecut/2011/10/13/701101/australian-court-blocks-samsung-tablet/
Growth in Chinese trade slowed significantly last month as the effects of the economic turmoil hitting its most important trading partners in Europe and the US, the FT reports. Overall Chinese exports increased 17.1 per cent in September from a year earlier, http://ftalphaville.ft.com/thecut/2011/10/13/701061/news-corp-questioned-over-circulation/‘
China has for the first time revealed the estimated size of its copper inventories, implying the country’s consumption may have been lower than thought, the FT says. Chinese copper inventories stood at 1.9m tonnes at the end of 2010,http://ftalphaville.ft.com/thecut/2011/10/13/701026/china-reveals-size-of-copper-inventory-2/
Leading European banks say they would rather sell assets than raise expensive new capital to meet compulsory demands from the European Union for higher capital ratios, threatening a further contraction of credit to the enfeebled eurozone economy, http://ftalphaville.ft.com/thecut/2011/10/13/701001/eu-banks-could-shrink-to-hit-capital-rules-2/