Posts from Friday Apr 27 2012


Further weekend reading,

– Kai Ryssdal’s interview with Tim GeithnerRead more

Finland’s got a [redacted]

‘Greece Pays Finland Collateral Money,’ goes the Bloomberg headline.

Well, that’s broadly true we suppose. Technically, Greek banks which cannot be named have transferred €311m of Greek government bonds which then moved into the custody of an international investment bank which cannot be named which (at some point) will sell them, put the revenues in safe assets, and release the collateral to the Finnish government if Greece does things which cannot be named to its EFSF bailout loans of which Finland provides a portion. (Finland pays a fee as part of its end of an exchange of cash-flows.) Read more

The EU budget: no solidarity during austerity

Earlier this week the European Commission’s proposed a whooping 6.8 per cent increase for next year’s EU budget. Cue outrage and fury. Finance minsters around Europe stamped their feet while their assistants dialled journalists to explain just how outraged and furious they were.

This is how the FT reported it (emphasis ours): Read more

From more Russians, with longer life expectancy

In this quad of graphs, can you spot the odd one out?

 Read more

Markets Live transcript 27 Apr 2012

Live markets commentary from 

US Markets Live! 10am EST, 3pm London

Join us at the usual place for FT Alphaville’s US edition of Markets Live at 10am New York Time — we’ll be talking that disappointing(?) US GDP number, those Amazon earnings (and something on Exxon)… and reflecting on a confusing week for Fed-watching.

See you there!

US GDP: slacking off but let’s not get too dramatic

First quarter GDP in the US rose 2.2 per cent, coming in slightly under estimates for a 2.5 per cent increase and well below the 3 per cent recorded in the last quarter of 2011.

From Reuters: Read more

Finally, a truly Popular bailout!

Cyprus is apparently preparing a bailout for its second biggest bank which could come in at near 10 per cent of GDP.

This is from the Cypriot press (poorly Google-translated – sorry – and now apparently removed and replaced by a much blander article; although Reuters looks like it saw the same thing so we are not going mad): Read more

Three European equities trends to watch

Fund managers have been shunning European bank and retail stocks for quite some time now, but there are signs that things are beginning to change. At least that’s what the global equity strategy team at HSBC found when they looked at the latest (March 2012) data on international fund holdings. Three European trends stood out.

Amazingly, European banks are coming back into favour. Well… more like slightly less out of favour (emphasis ours): Read more

Famous last words, Spanish edition

History is scattered with examples of hubris.

Take the story of King Croesus of Lydia who arrogantly asked the well-known wise man Solon the Athenian who he believed to be the happiest man in the world, fully expecting that the answer would be none other than himself, the King. Read more

Markets Live transcript 27 Apr 2012

Live markets commentary from 

Pop ya collar, don’t let the S&P sweat ya

Are you pleased with how your stock portfolio has performed this year? And are you concerned that your gains may get wiped out? Not to worry! A simple option strategy recommended in BNP Paribas’ Daily Lens on Friday morning might be able to help you hedge your downside risk.

Before we get to that though, let’s get a bit of perspective: Read more

The (early) Lunch Wrap

Good morning, New York…


Another repeat from the BoJ

We love the BoJ’s no-nonsense approach to amendments. If you’re doing something wrong, or not doing enough, just cross it out and change it:

 Read more

Downgrading a eurozone sovereign: you know the drill

We liked the reaction of Societe Generale’s Sebastien Galy to S&P’s two-notch Spain rating cut:

1. A belated recognition of reality, this typically leads to some competition amongst rating agencies to capture headlines. Read more

Further reading

Elsewhere on Friday,

Fairness and taxation try to get along while top tax rates have fallenRead more

The 6am Cut London

The Bank of Japan kept interest rates at zero to 0.1% and said it would expand its asset-purchase fund to 40tn yen from 30tn, reports Bloomberg. Earlier, industrial production data for Q1 showed a lower rise than had been expected, reports Bloomberg separately.

Standard & Poor’s cut Spain’s credit rating by two notches, from A to BBB-plus, and put a negative outlook on the country’s credit. The ratings agency cited expectations the government finances will deteriorate even more than previously thought as a result of a contracting economy and an ailing banking sector, reports ReutersRead more

Overnight markets: Up

Asian shares inched up on Friday, gaining ground for a third consecutive session, says the FT, amid signs of a US economic pickup and strong corporate earnings, although gains were curbed by lingering nervousness about Europe’s debt problems.

Asian markets
Nikkei 225 up +83.03 (+0.87%) at 9,645
Topix up +1.21 (+0.15%) at 811.31
Hang Seng up +104.90 (+0.50%) at 20,915 Read more

The comms problem

Here’s one visual way to see the disconnect between the hawkish shift in the FOMC’s new federal funds rate projections and the steadfast dovishness of the statement itself, which preserved the late-2014 language.

From Credit Suisse: Read more