The (early) Lunch Wrap | FT Alphaville

The (early) Lunch Wrap

Good morning New York…


Fitch tallies cost of Basel III: David takes us through the 29 global systemically important financial institutions which, according to Fitch, will need to collectively raise $566bn in common equity  to satisfy new Basel III capital rules.

Hold your Greek Trojan horses! The ECB isn’t pausing all liquidity ops to Greek banks, it’s just changing them, a little. Joseph explains how ELAs work and why it’s wrong to believe the ECB has just abandoned a whole swathe of Greek banks.

What price a slowing population? Not that high, according to Nomura. They believe that the negative impact from a population decline may not be as large as some observers fear.

A little inflation trend path comparison. Cardiff asks you to consider two different inflation paths and what they really mean.

Existential angst is out there: Fund managers have never been more gloomy, says Masa. First it was Hugh Hendry talking about the plight of bananas, now Cripsin Odey is preparing to play a piano in the dark.


European leaders pitch June Greek election as a referendum on eurozone membership: José Manuel Barroso, Angela Merkel and Francois Hollande have all stressed that they want Greece to remain in the union. Mario Draghi, meanwhile, has acknowledged for the first time that Greece could leave the monetary union, while the ECB temporarily has halted some regular liquidity operations to a number of Greek banks. (FT, Bloomberg.)

Cameron adds to eurozone warnings: David Cameron is set to warn that the unravelling of the euro will “carry huge risks for everyone”, this as he backs Francois Hollande’s proposals to boost European growth (Financial Times).

Fed’s minutes focus on eurozone fears. The statement shows that eurozone fears were partly behind the clash between its forecast of low interest rates through late 2014 with members’ individual predictions that rates will need to rise earlier (Financial Times.)

Japan’s Q1 GDP higher than expected. Growth came in at an annualised rate of 4.1%, but the figure was boosted by reconstruction spending that’s poised to fade just as a worsening in Europe’s crisis threatens to curtail export demand. (Bloomberg.)

JPMorgan’s CIO trading loss has surpassed the bank’s initial $2bn estimate by at least $1bn, according to people with knowledge of the losses. (NYT DealBook

Facebook’s investors plan to cash out: Some of the company’s largest investors are planning to sell as much as half of their stakes in the social network’s initial public offering this week, says the WSJ. Goldman Sachs, Tiger Global Management and Facebook director Peter Thiel, who was one of the social network’s first investors, more than doubled the amount of stock they plan to sell.  (Reuters).

China to expand the scope for short selling. It will start a trial next week to allow brokerages to borrow stocks for clients (Bloomberg).

HSBC doubles revenue target: Europe’s biggest bank, said it cut costs by $2bn after one year of a 3-year turnaround plan, and is on target to meet its return on equity and other financial targets (Reuters, Bloomberg).

Russian investors flee: Funds are fleeing Russia as demonstrations against President Vladimir Putin gain traction, exacerbating the impact of Europe’s debt crisis on the country’s markets, money managers from Frankfurt to Moscow said (Bloomberg).

Chinese bank lending plunged in April, according to the PBoC, and remained weak in May according to bankers and borrowers, says the WSJ.

Markets: Growth-focused assets were striving to consolidate after several weak sessions – primarily driven by eurozone angst – which left many benchmarks at multi-month troughs. The FTSE All-World equity index was fractionally higher and sitting just above its lowest mark since mid-January. So far in May the gauge has only seen three days of gains and is down 7.2 per cent. The FTSE Eurofirst 300 opened with a mild rise after the Asia-Pacific region added 0.9 per cent. But it has faltered again and is now down 0.5 per cent – as miners struggle – even though US stock futures point to a 0.2 per cent pop for Wall Street later in the day.