The Big (Quantitative) Easy

• Two biggest European rescues: Lloyds (43.5%), Royal Bank of Scotland (70% state owned).
• Rights issue 99% subscribed - investors have confidence in the banks to repay state loans
• Regulators suggesting that bank compensation be given in shares, which gradually mature, as to avoid excessive risk taking
• Verizon wireless: owned 55% Verizon Communications, 45% Vodaphone
• Amazon: IPO in Dec 1999, it gained 6,000% in 30 months; subsequent bubble lost 94% of value. All and all, has still beaten the S&P 22%.
• 10-year bond reaches 3.5%, attributed mostly to supply (deficit of $1,400bn - 10% GDP), and lack of demand as investors look for more yield in equities and corporates.
• Foreign ownership of JAP debt at 6%, compared to 50% for the US
• JAP: Aging population is no longer saving, which means the country can no longer run a large deficit without excess domestic savings
• quantitative easing: buy distressed assets, wait to be repriced