The Banking and Strategy Initiative

Chillin' out till it needs to be funded

The Mid-week Trading update: No #JobsFriday, No #TwitterIPO, You and I might know the Euro is not the next Reserve currency for anyone..(US:TWTR, $TWTR, US:GS, US:JPM, $XRH)

Exchange rate data were found here: http://www...

Exchange rate data were found here: http://www.oanda.com/lang/de/currency/historical-rates/. They were normalized with respect to their Jan. 1999 value and divided by the weighted mean of all. The weights are the GNP in relation to their GNP sum. GNP data from 2007 from CIA factbook (http://www.umsl.edu/services/govdocs/wofact2008/rankorder/2001rank.html). Calculation to be found here: http://www.box.net/shared/gry1nkry20tpodcfb9yt (Photo credit: Wikipedia)

But then, remember it is a slow week and Twitter filing public IPO documents also means less for them as the shutdown continues, but then back on the topic we have enjoined.

China and Europe keep Services recovery happening, but reserve currencies?

The Euro might think one of its redeeming features might be when the eventual decimation ( as opposed to decimalisation, deliberate diplomatic cough) of Dollar as the Global reserve currency considering it lasted fair numbers of crisis and no one urrency can last more than that. The Euro therefore assumes it will be a likely candidate when it pushes its price upwards a s Dollar tags down on shutdown-Taper-no shutdown- no taper- what emerging markets kind of fracas and China and Japan for starters see merit in no longer being overweight on US treasuries at SAFE, PBOC and many other reserves within those two Asia Pacific Powers itself. The week continues to show however that despite the USD having limited recovery power, nether does the Euro have any superhuman strength and though Renminbi’s own candidacy as the world’s largest traded and therefore safer reserve may not be cogent let alone the pat answer for a small Exporter or an emerging market, it is also but obvious that Renminbi’s already public spats with the Economic area and worries about Germany’s big brotherliness endangering the Euro system present a big downside to the Euro (or they just provide more stability to the currency as it survives with internal surpluses generated by the Dutch and the Deutsch)

European PMIs were again mostly positive on the back of  stronger recovery in the fully depleted Services PMIe allowing real positive backlog orders to regenerate the indices across the 17 individual Euro nations allowing the political instability in Italy this time soon after the German elections ad the Euro trades to 1.40, and as we said, is closely chased by the GBP. Also the Aussie probably is staying around the 90 cent level more comfortable till China works than the above par levels on the flip side till earlier this year in the period of the crisis The graph above, of course just manages to show everyone a loser including the Euro, Pound and Dollar since 1999 except perhaps how the Yen broke out of its pain.

For others watching there are other more important reasons for the reserve currency to not be a safe haven like the Euro which is getting more cheap hot money flows like the Yen did and not really intentioned reserve for banks or sovereigns guaranteeing most of the world’s future debt. Also, this weeks upsurge of the Euro contains the story of the smaller time South Europe exporters getting twitchy to sell Euro at the opportunity as will Pound Sterling based importers. The Pound also mercilessly stays above 1.61 and the nose of the currency is pointed upward, retaining hopes of turning the Euro down till German customers put their hands up or the Eurosystem finds a new issue with UK. Consolidated Bank supervision seems a bit away despite the calendar already discussed and approved by the Euro zone committees

Twitter files for IPO ..but shutdown(The S1 filed with SEC)

Twitter, for on visible interlude is actually quite a  symbol of the Economic impact a US shutdown was initially supposed to have. Additionally, it has chalked up a suitably large loss just in time so it is likely still a sub $1 Bln listing approved by the JOBS Act to keep promoter filings and ownership secrets minutes(3 weeks) before book estimates are computed with real investor interest and in fact finalised for the retail portion put forth to the exchanges. Not to make too fine a point, but the filing can’t be approved if the Tea party shennanigans continue in the Congress/House

In the meantime, Manchester United already managed an IPO and Empire State REIT s trading above the issue price this week alongwith two other recent IPOs also trading above issue rice and Twitter might well want to have this IPO now while the no Taper and Taper discussions have both ruled in favor of equity investments. The revenue mdel for advertising in the moment led it to grow Revenues per user and increase revenues to a $500 mln runrate for the year ( probably $600 mln including a better second half , ut no deeper calculations there, just first level stuff and there could be actually signed contracts etc) People were sceptical of facebook moile too, but th world changed to instnt noodles a long time back!!

No Jobs report on Friday ..need we worry

While the SEC will still be monitoring markets and a half dozen Twitter advisors include the two leads that led Facebook with the fracas of the NASDAQ Order Book and Deutsche bank and Code Advisors,  the BLS is also an additional victim of the shutdown by the Tea party and here will be no edition of the Jobs report this morning. Also the last report brought back the structural, not so temporary 512k additions to the long term unemployed and the consumer data suggests untenable lverage from households hitting consumption negatively heading into the holiday season.

Auto sales however show, that the data may be reactive to previous slowness encouraged by public recognition of the extraneous house pricing and limited housing recovery and that House and Auto being the priority items and in demand, the US consumer may still be counted on to keep the Holiday cheer

During the shutdown period BLS will not collect data, issue reports, or respond to public inquiries. Updates to the site will start again when the Federal government resumes operations. Revised schedules will be issued as they become available.(BLS.gov notice from CNBC)

English: Jack Dorsey and Barack Obama at Twitt...

English: Jack Dorsey and Barack Obama at Twitter Town Hall in July 2011 (Photo credit: Wikipedia)

# Dealbook Deal markets (FT.com)

Meanwhile municipals seem to be getting back slowly and surely as Miami Dade got its latest issues among many other US municipals getting bonds rated and banks and Investment Banking Fee up for nine months over 2012 with JP Morgan $4.2 Bln in Fees in three quarters and $3.2 Bln at Goldman Sachs continuing the better scores till the weak season in Holiday sales. M&A activity is down 20% this year an Bond issue shave moved from Asia to the Middle East and Africa

Equity issuance has recovered this year in US and Europe leading to a global back of almost 20% to $11,6 mln in over 2000 stories

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