Posts from November 2012

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

The Closer


One of those days when Harry Reid moved stocks. Apparently. The S&P 500 closed down 0.5 per cent at 1,398.14, while the Dow fell 0.69 per cent, with blame cast on signs of trouble for a fiscal cliff fix (Reuters). Read more

“China not a currency manipulator, everyone back to work”

Or if you prefer the US Treasury Department-ese version:

Based on the analysis in this report, Treasury has concluded that no major trading partner of the United States met the standards identified in Section 3004 of the Act during the period covered in the Report.

 Read more

Why the ESM rules OK (says the ECJ)

It’s the clause that makes German officials’ faces look like they’re struggling to keep their lunches down when someone mentions the prospect of write-downs on Greece’s official loans. The no bailouts clause! Article 125 of the EU TreatyRead more

Mike’s mad at Meg

With a h/t to All Things D, here’s Mike Lynch’s open letter to HP: Read more

The Amazon Economy: live Q&A starting at 11am EST

Our colleague Barney Jopson has an FT e-book out today that expands on his earlier series of articles about Amazon. Click through to buy it:

 Read more

Kill the old, jobs edition

If increased proportions of older workers are squeezing out some of the younger would-be workers there could be a significant downside in the longer term — ironically, due to the ageing population.  Read more

Markets Live: Tuesday, 27th November, 2012

Live markets commentary from 

The (early) Lunch Wrap

Eurozone ministers agreed a Greek aid deal || OECD slashes 2013 growth forecast || Lehman Brothers has agreed to sell Archstone || Intrade no longer accept bets from U.S. residents || HP sued over Autonomy takeover || GMO abandons bond market || Buffett thinks Dimon would make a good Treasury secretary || ResCap creditors target cash from Ally asset sales || Olam International said it will continue to raise debt to fund expansion || South Africa’s economy grew at the slowest pace since a recession in 2009 || Fed’s Fisher says unemployment in U.S. is main worry || Markets cautiously up Read more

How Ozzy got his Canuck

Canada’s central bank governer Mark Carney may have played hard to get with British chancellor George Osborne, but Ozzy was up for the challenge. Doubt this man’s resolve at your peril. Read more

Muddy Waters (finally) publishes report on Olam

Carson Block has faced some criticism in the past couple of days (such as from the FT’s Lex) for the week-long delay in releasing the promised Muddy Waters’ report on Singapore-based Olam International.

But the wait is over. The report was published on Monday night. Block has not skimped on his allegations, so have a new ink cartridge ready if you’re planning on printing out all 133 pages. Read more

Further reading

Elsewhere on Tuesday,

Italy: what’s going on?

– Is RIM the Keith Richards of stocks?

– The great oil fallacyRead more

The 6am Cut London

Greek deal reached by eurozone ministers || Asian markets rise || Argentine bondholders seek stay of judgment || Shareholder sues HP over Autonomy || Buffett thinks Dimon could be a good Treasury secretary || How the UK persuaded Mark Carney Read more

A ‘broader concept of debt sustainability’ for Greece (feat. OSI-lite)

The IMF’s desired target of a 120 per cent debt-to-GDP ratio by 2020 has been replaced by 124 per cent by the same date — thanks in large part to official creditors taking a lower interest rate on repayments from the original bailout. A lot also seems to hinge on the Greek debt ‘buyback boondoggle’, which is now well and truly on the table.  Read more

Stop, in the name of restructured Argentine bondholders [updated]

Stay, actually. An emergency motion for a stay on Judge Griesa’s sweeping order in the Argentine bond holdouts case — filed on Monday night by the Exchange Bondholder Group:

 Read more

A mere three weeks later, a Greek debt deal [updated]

A deal, a late-night press conference, an inevitable fudging of the numbers. You know the rules.

Eurogroup officials will hold a press conference on Monday night at 11pm CET – or at least, that’s the time given in this link… Read more

Amazon borrows cheap money because, we guess, money is cheap to borrow (and easy to spend)

From the FT’s Barney Jopson and Vivianne Rodrigues:

Amazon was set to issue a bond for the first time in more than a decade on Monday, taking advantage of rock-bottom borrowing costs as it continues an investment drive that is withering its profits.

 Read more

The Closer


FT markets round-up: “Global stocks started the week on a downbeat note following a string of gains in the past couple of sessions as worries over a looming fiscal cliff in the US, and lingering debt woes in the eurozone weighed on investors’ sentiment. The mood was cautious, with copper steady at $3.53 a pound as the euro fell 0.1 per cent to $1.2965. The dollar index was little changed, while Treasuries attracted buyers, pushing 10-year yields down 3 basis points to 1.66 per cent. Gold also edged lower, falling $1 to $1,748 an ounce. High quality global journalism requires investment. The FTSE All-World equity index retreated by 0.1 per cent after Asia was broadly firmer. The FTSE Eurofirst 300 closed 0.5 per cent lower as Wall Street’s S&P 500 fell 0.2 per cent to close at 1,404 points.” (Financial TimesRead more

Marginal tax rates and that thing that’s happening at the end of the year

We’re trying not to get too caught up in the play-by-play of the negotiations between the President and Congress about the [rhymes with, um, driscoll spliff], thinking it better to wait until we start getting more definitive news. We recommend the NYT’s Debt Reckoning site to those who want frequently updated coverage.

But we recently came across a series of useful and well-constructed charts from Credit Suisse, and we wanted to highlight a couple of them: Read more