Posts from Wednesday May 30 2012

The Closer


Risk was very much off for US stocks on Wednesday. The S&P 500 closed down 1.43 per cent at 1,313. The S&P has lost almost 6 per cent in May, making the month its worst since September (Reuters). The euro fell to its lowest level in nearly two years against the dollar, dropping under $1.24 (Bloomberg). Read more

Ay, Bankia, nos reimos para no llorar

Some light relief from Wednesday’s ECB mystery. From Bankia’s web siteRead more

Just to close off the European session….

That’s the euro, deteriorating further against the dollar late in the day, London time. 1.2380 at pixel. Read more

Greece: stuck between Iran and Glencore

You know things are tricky when your energy options are Iran, Glencore or blackouts, and then the Iran option is removed.

We’ve known for while that Greece’s reliance on Iranian oil has put it in a difficult situation, at time when banks are pulling letters of credit and Iran sanctions bite. This was an early sign of creditors’ fear of drachma exposure. Read more

Bankia, Spain, the ECB and a proliferation of “mistakes”

So, Bankia is in trouble and no one seems to know what is going on. First, the FT said that:

A Spanish plan to recapitalise Bankia, the troubled lender, by indirectly tapping the European Central Bank for cash, was bluntly rejected as unacceptable by the ECB, European officials said.

 Read more

US Markets Live transcript 30 May 2012

Live markets commentary from 

China on the eurozone crisis, and vice versa

With the news being all eurozone-eurozone-China-eurozone of late (at least, in our world), interactions between the two — who happen to be massive trading partners — have produced some interesting stories. Which are probably best illustrated with cats and animated gifs.

What Chinese officials say they think about the eurozone and Greece’s place thereinRead more

Spain, Bankia and the credibility problem

Spain’s government has been left looking increasingly desperate/reckless/ineffective by its plans to rescue Bankia, as today’s FT describes:

Mr Rajoy and his government are facing growing domestic criticism over repeated errors of strategy and communication, which that have given an impression that Madrid has run out of ideas on how to handle its financial and economic crises. Read more

“Since the introduction of the euro…”

Click to read circa 350 pages…

Markets Live transcript 30 May 2012

Live markets commentary from 

The (early) lunch Wrap

Good morning, New York…


Richard Koo’s prescription for Greece (and Germany)

Nomura’s Richard Koo is kinda with Christine Lagarde when it comes to the Greek tax problem.

But eurozone bonds (aka eurobonds) are not the solution, he says. Firstly, Greece needs to address its mutual distrust problem with Germany, and persuade the Germans that it will get serious about this tax collection thing: Read more

Fancy some Italian 5-year? (updated)

The 10-year has spiked through 6 per cent, btw. Read more

Spain’s long climb to the liquidity hospital [updated]

UPDATE: We have a denial or two. This is from the ECB’s twitter account:

Contrary to media reports published today, the European Central Bank (ECB) has not been consulted and has not expressed a position on plans by the Spanish authorities to recapitalise a major Spanish bank. The ECB stands ready to give advice on the development of such plans.

 Read more

Further reading

Elsewhere on Wednesday,

– The new stimulant of choice on Wall St is just… weird. Read more

The 6am Cut London

The ECB has rejected Spain’s plan for Bankia, telling Madrid that it would be in danger of breaching an EU ban on “monetary financing”, says the FT, citing two European officials.

A top Obama administration official was dispatched to Europe on Tuesday, reports the WSJ, to press eurozone officials for changes such as broadening the rescue funds and allowing them to directly recapitalise banks. The Treasury Department’s under secretary for international affairs, Lael Brainard, met Greece’s interim finance minister on Tuesday and will be in Frankfurt today. Read more

Overnight markets: Down

Asian shares fell on disappointment over Chinese stimulus plans, while concerns grew over Spanish banking problems, says the FT.

The MSCI Asia Pacific index lost 0.7 per cent with Japan’s Nikkei 225 Stock Average off 0.7 per cent, South Korea’s Kospi Composite index down 0.8 per cent and Australia’s S&P/ASX 200 index 1 per cent lower. Read more