FT markets round-up:“Stocks on Wall Street fell heavily for a second day as news about an impasse in Europe over an aid programme to Greece and worries over the outlook for the US economy weighed on sentiment. Thursday’s declines come after the sharpest drop in almost a year for the S&P 500 index. The broad measure of US stocks closed 1.2 per cent lower well below the 1,400 points mark, following a 2.4 per cent slide on Wednesday. The FTSE Eurofirst 300, which dropped 1.4 per cent in the previous session, closed 0.15 per cent lower as the FTSE All World lost 1 per cent.” (Financial Times) Read more
Spain’s fiscal management seems to increasingly be a case of plugging holes, watching new ones appear, ignoring them, then relenting and also plugging those… all while delaying a clearly inevitable request for assistance from Brussels.
On the positive side, the auction on Thursday marked the completion of the country’s planned funding for this year (€86bn, but there’s also €10bn in private placements issuance). On the negative side, the €4.7bn debt sale saw unenthusiastic demand, which has helped spook investors and driven 10-yr yields up. Read more
David at Deus Ex Macchiato = disturbed:
I went to a conference yesterday which started very well, but ended up about as scary as Romney’s economic policy. Why? Because a regulator from a minor European country (but who nevertheless is apparently influential at ESMA) suggested that it was official policy to substantially reduce the size of the OTC markets in general, and the inter-dealer market in particular.
At Thursday’s ECB press conference, Mario Draghi unveiled plans to introduce a new series of euro bank notes. And there was a little video to accompany the news… Read more
China’s copper mountain continues to build. Over the past month Chinese bonded (as in copper inventories in Chinese warehouses that are yet to pay VAT) and SHFE copper inventories have risen to record high levels, according to Goldman. Anyone with new pics of the phenomenon will be rewarded with an Alphaville mug (probably).
Head to the East Midlands.
Some more details about Spain’s bad bank are filtering through, mainly on how it might function in practice. And analysts are finding that the more they find out, the more concerns they have.
On Thursday Credit Suisse’s Ignacio Cerezo and Andrea Unzueta summed up their latest thoughts on AMC following a meeting with Cuatrecasas, legal advisers to the bank recap fund FROB. Overall, they see the new details that emerged as ” incrementally negative” for both Spain and its banking sector. Read more
Pushing a fresh austerity package (the price of financing the next stage of the country’s bailout) through parliament on Wednesday night cost the Greek government and Antonis Samaras, the centre-right prime minister, dearly. And while there is no guarantee a repeat performance can be staged, there is every probability the boulder will slip and one will be demanded. Read more
Live markets commentary from FT.com
Austerity package passed in Greece || Dexia bailed out (again) || Soured Apple || Deutsche’s loss on MetroPCS merger || Argentina v Chevron || Sandy disrupts US petrol supply || Gold up || Bluffer’s guide to regime change in China || The election results and Wall Street || EC/IMF stats fight, and the art of understatement || China NOT deleveraging Read more
Forecasts for the European Union covering 2012-2014 were out on Wednesday. FT Alphaville thinks the EC may be onto an important trend:
The distress in more vulnerable Member States has progressively started to affect the remainder of the Union.
Standard Chartered’s increasingly bullish China team are arguing that fears of an aggressive deleveraging process are wide of the mark. If they’re right (implicit Chinese data opacity warning there), it’s a reason for some short term cheer but longer term worry — and it’s something the new leadership being ushered on to the stage in Beijing will have to take control of.
According to our numbers, China’s total leverage will rise from 191% of GDP at the end of 2011 to 206% by the end of this year, as we show in Figure 1.
The REALLY easy bluffer’s guide to China’s regime change taking place over the next week: wave your hands airily and declare that nobody knows. Because at this stage nobody does know; at least, no one who does know will tell you anything.
However the 18th Party Congress, which starts in Beijing today, is at least as important to the world economy as the US election was. So we’ve attempted to compile a guide on some of the best sources on the incredibly opaque world of Chinese politics (described as “the shark pool of shark pools” by one diplomat quoted by the FT’s David Pilling). Read more
Elsewhere on Thursday,
– Let the existential Republican identity crisis begin.
– Markets will do what markets do, election or no election.
– Alternative vote. (via Reddit) Read more
Greece passes austerity bill || Asian shares fall on fiscal cliff || Japanese machinery orders and trade surplus disappoint || US house prices are mostly higher || China statistics chief says October data will be good || Lenovo profits and market share up in troubled sector || ‘Cult of equities’ officially dead amongst UK pension funds || Read more