Posts from Wednesday Nov 28 2012

The Closer


FT markets round-up: “Wall Street rebounded from early losses to end the session on a higher note as remarks by US President Barack Obama and by the Speaker of the House, John Boehner, raised hopes for a compromise on the fiscal cliff. The FTSE All-World equity index rose 0.2 per cent after falling earlier in the day, the dollar reversed course to trade 0.1 per cent lower and gold, which at one point lost $25 in five minutes after a succession of sell “stops” appeared to have been triggered – recovered to stand little changed at $1,718 an ounce. The FTSE Eurofirst 300 index, which was at one point in the red by 0.6 per cent, closed 0.15 per cent higher, while Wall Street’s S&P 500, which was down 14 points to 1,385 before Mr Boehner’s comments, rebounded and closed 0.8 per cent higher at 1,409.” (Financial TimesRead more

Stayin’ alive, Argentina edition

Looks like those emergency bondholder briefs had some effect on the Second Circuit…

IT IS HEREBY ORDERED that the motion by the Exchange Bondholder Group for leave to intervene as interested non-parties for the purpose of appealing orders entered by the district court on 11/21/12 and for the purpose of seeking a stay pending appeal is GRANTED.

 Read more

Olam responds to Muddy Waters

Following Muddy Waters’ report on why it’s shorting Olam, released yesterday, the company has released a detailed defence. In fact, it’s 45 pages long… Read more

US Markets Live, 28 November 2012

Live markets commentary from 

US Markets Live reminder

We’re kicking off at 10am EST, 3pm in London. As usual we have no idea what we’ll be talking about, but among the possibilities are SAC, the Greek deal, Bankia, US macro, BP, and anything else that hits the wire and interrupts us. See you at the usual place!

FX excitement! Nah, you may as well head home for Christmas

Oh dear, many an FX trader is gonna be disappointed by this one — history suggests FX volatility is heading down, not up, as we exit November.

From Deutsche Bank’s Alan Ruskin… Read more

Find “projected debt-to-GDP ratio” where country = “Greece”; run eyeroll.exe

Gary Jenkins of Swordfish Research aspired to have more thoughts on the latest Greek debt deal by Wednesday morning. Alas, it was not to be:

I was hoping that having had a further twenty four hours to digest the Greek debt sustainability plan that I would have a lot to add to yesterday’s comments, but I don’t. There have been press reports (FT) that the measures to be implemented will only bring the debt/GDP figure down to 126.6% rather than the 124% announced but I think by now we are all used to the initial figures released being subject to revision pretty quickly.

We agree — the figures around Greece always come with implied aspiration. Read more

European bank debt is attractive again (but not *that* attractive)

Things have gotten so good recently for European banks that the idea of them repaying their LTRO cash early is getting more attention as the first date at which they can do so — January 2013 — creeps up. And there’s certainly more bank debt being issued, even by the peripherals:

Peripheral bank debt issuance since January 2012 - FT/Datastream/Thomson Reuters Read more

Kabul Bank: of fraud and airplane food trays

This has been a while coming… Afghanistan has just got a new independent report published into what has previously been described as a Ponzi scheme operated at Kabul Bank, the country’s biggest lender.

It’s grim, grubby stuff, detailing how the men at Kabul Bank and their friends and relatives got rich off $861m in bogus loans and sparked a bank run in 2010, while political interference has since hampered the clean-up of the mess. Read more

Markets Live: Wednesday, 28th November, 2012

Live markets commentary from 

Wine loans: the curious cases of red inventory

Somewhere, on the shores of Switzerland’s Lake Léman — not far from the famous Geneva jet d’eau — is a high-security warehouse facility so impregnable and so discreet it could easily be used to store large volumes of gold bullion.

Yet for Stephen Burton, the founder of wine brokerage Bordeaux Cellars that’s not its most exciting attribute. He’s keen on the other more bespoke features, like climate control. Read more

The (early) Lunch Wrap

US growth hopes lifted by housing data || Olam hits back at Muddy Waters allegations || Kabul Bank review details massive fraud || Russian mobile listing raises $1.7bn || Record special payouts from US companies || Markets update || China is definitely not a currency manipulator || Why the ESM rules OK || China’s woeful stockmarket Read more

China’s woeful stockmarket

Lately it seems like no amount of happy newsflow about the latest Greek reprieve or positive US data can lift the Shanghai Composite:

Shanghai Composite 5-year chart - FT Read more

Further reading

Elsewhere on Wednesday,

– What about that hyperinflation you predicted in 2008?

Student debt == subprime? Read more

The 6am Cut London

Asian shares dropped for the first time in six sessions as renewed concerns over the US fiscal cliff overshadowed positive US economic data. The MSCI Asia Pacific index lost 0.2% with Japan’s Nikkei 225 Stock Average down 0.8%, South Korea’s Kospi Composite index off 0.9% and Australia’s S&P/ASX 200 index 0.5 per cent lower. Hong Kong’s Hang Seng index was 0.7% lower while China’s Shanghai Composite index slipped 0.4%.” (Financial Times)

Eurozone states face losses on Greek loans: Documents seen by the FT say that under the Monday deal Greece’s debt load would only come down to 115% by 2022, meaning at least another 5.1 percentage points in cuts will have to be found. (Financial TimesRead more