Marking a fourth consecutive day of decline, the S&P 500 fell 0.81 per cent. It’s the longest losing streak that the index has experienced since May. Meanwhile, European equities essentially stayed flat, with the FTSE 100 registering a modest 0.65 per cent gain on news of a Spanish bailout blueprint (Bloomberg). Read more
With a big hat-tip to El Pais, the draft memorandum of understanding for Spain’s bailout. We’re still reading through all the conditions imposed on Spanish banks…. Click pic for full doc
Featuring bank bail-ins for subordinated debt, notably: Read more
At an ungodly hour of Tuesday morning, eurozone ministers agreed that the EFSF will lend Spain €30bn for its banks by the end of July.
Two weeks. Read more
Some wise words from John Kemp at Reuters on Tuesday, now contemplating the side-effects of the bubble in fear:
It is the importance of non-rational motivations that explains why Keynes placed so much emphasis on “animal spirits” or the state of investors’ and entrepreneurs’ expectations. By sapping that willingness to shoulder a degree of incalculable uncertainty, the bubble in fear destroys the vital process by which economies form capital, grow and generate employment.
Yeah, yeah, yeah, yeah. This post is offering an idiot or two the publicity they were hankering after.
But there’s something strangely post-modern about this “news.” It’s like the financial crisis never hit. And it may be that none of us can actually move post-crisis until the individuals concerned depart this planet. In a corporal sense. Read more
Click through the pic for a look at how PFGBest was hoping to avoid becoming the next MF Global.
In our previous post, we made the point that if the old goldbug accusation that central banks and bullion banks were suppressing the gold price by selling or lending gold into the market is true, then in the current cash-for-gold universe — which features negative gold lease rates — the opposite must apply.
That is, the very same entities may now, if anything, be supporting prices in the market. Read more
A while ago we observed that negative gold leasing rates were potentially signalling something awry with the Libor rate.
That judging by gold forwards, the Libor component of the gold lease rate calculation (Libor-GOFO = Lending rate) was coming in much lower than what might otherwise be expected. Read more
First, an inventory from Barclays’ Marcus Agius to Committee head Andrew Tyrie in advance of his appearance on Tuesday morning (click through the pics to get the full documents):
Live markets commentary from FT.com
Do not be misled by the “big jump in surplus” headlines: as most reports on the subject will quickly point out, China’s trade figures for June are another signal of slowing growth.
Export growth fell as expected, but import growth fell much more than expected (hence the big surplus). Many imports are destined to become exports, so a slowdown in imports points to falling demand for Chinese goods too. And the categories of imports bear this out, says Nomura’s Zhiwei Zhang points out: Read more
This is one hurt banker.
Bob Diamond is letting all his stock and options lapse as he departs from Barclays. Read more
Click the pic for the live feed from Wilson Room, Portcullis House…
The Eurogroup finance ministers have inched things forward with their long Monday summit, but the press conference in the early hours of this morning also reaffirmed that many big questions remain.
The first headline is that Spain gets an extra year to meet its 3 per cent deficit-to-GDP ratio target. Just as well, because the country was extremely unlikely to hit that by the end of next year. The Journal reports that a draft statement says this means Spain can now run a 6.3 per cent deficit this year without risking penalties, compared with 5.3 per cent under the 2013 target. Read more
Elsewhere on Tuesday,
– Oh no, not another MF Global? Read more
China’s trade surplus jumped to $31.7bn as import growth slowed more quickly than exports. Exports rose 11.3 per cent from a year earlier, down from May’s 15.3 per cent pace. Imports increased 6.3 per cent from a year earlier, half of May’s 12.7 per cent and well below expectations. (Financial Times)
US regulators have barred Peregrine Financial Group, a Chicago-based futures broker, from doing further business amid a probe into missing customer funds after an apparent suicide attempt by the company’s founder. The National Futures Association said it had taken “emergency enforcement action” against Peregrine, on suspicion it “not have sufficient assets to meet its obligations to its customers”. The action was taken because of a note written by founder Russell Wasendorf in which he “said he had done something wrong”, according to a company spokeswoman. (Financial Times) Read more