FURTHER FURTHER READING
- The FX 'manipulation' thing: thoughts from Matt Levine, Kid Dynamite, and Felix.
- "High collateral haircuts increase the risk of large price falls." Discuss.
- When's too old for a PhD?
- The Congress-members/panhandlers Venn diagram.
- The decline of distressed (and foreclosed) home sales.
- Arbitrage opportunities in the NBA.
ROUND-UP
The Dow's longest sell-off since 2012. The index lost 0.8 per cent on Wednesday, closing at 14,995 and bringing its losses over the last three days to 1.7 per cent. The S&P 500 declined 0.8 per cent (Bloomberg).
Stephen Hester will step down as RBS chief executive at the end of the year. Hester parted ways with the bank after the UK government, its part-owner, and the RBS board decided that a fresh face should lead a five-year transition to normal commercial banking again. "Having brought RBS back from the brink, now is the time to move on from the rescue phase," Chancellor George Osborne said (Financial Times). Hester is the sixth chief executive to leave a British bank since the financial crisis began, including his predecessor at RBS, Fred Goodwin. The RBS board will launch a formal search for a successor (Wall Street Journal).
North Dakota's fields helped spur the biggest annual jump in oil production in US history last year. The 14 per cent increase to 8.9 million barrels per day was also the largest around the world in 2012, according to BP's statistical review (Wall Street Journal).
Stanley Fischer quote du jour: "All those who've been worrying about so-called currency wars should be feeling better... I am happy to see these rises in Treasury yields because we've been dealing with capital inflows which are not particularly wanted." (Bloomberg)
The EU abandoned data-privacy safeguards that would have limited US spying on European citizens after lobbying by the Obama administration. The 'anti-Fisa clause' was removed from legislation in January 2012. It would have nullified US requests to hand over data, but was also opposed by many commissioners from EU member-states who did not want to antagonise the US as an ally (Financial Times).
Apollo Tyres will pay $2.5bn for Cooper Tire, the biggest-ever US acquisition by an Indian company. The $35 per share all-cash offer is a 43 per cent premium to Cooper's closing price on Tuesday, and will allow Apollo Tyres to diversify away from a slowdown in India's car market (Financial Times).
Settlement failures have risen in repo trading since the Fed began signalling withdrawal of its stimulus. Fails involving Treasuries increased from $14.5bn to $58.5bn in the week to May 29. It has coincided with a surge in investor demand to borrow the securities for short sales to hedge the risk of rising rates (Financial Times).
