Posts from Monday Feb 25 2013

The Closer


Doesn’t it feel like 2011? The S&P 500 had its worst day since November (closing down 1.8 per cent at 1,487.89), Morgan Stanley shares fell 6.57 per cent, and the euro lost 1.7 per cent against the yen. The 10-year Treasury yield dropped to 1.86 per cent, a one-month low (Reuters, Bloomberg). Read more

I can’t Belize it’s not ratable payment [updated]

Update (Feb 26) — It turns out that we failed to be clear on something pretty important here… rendering our headline ironically pretty apt. Maybe you really can’t believe Belize’s disavowal of ratable payment on its bonds.

OK, so here’s the section on pari passu language in the new bonds’ Offering Memorandum: Read more

A dollar bully

Dear everyone, this article is based on a questionable premise: that the dollar is about to head off on another bull run. We know this may not happen. Thanks, us. Read more

Stable Italy shocker hopes dashed!

No sooner had Italian stocks soared and bonds tightened (sic) on early exit polls suggesting Pier Luigi Bersani’s centre-left Democratic party might have secured victory in both the lower and upper houses of the Parlamento Italiano, than…

 Read more

Sesterces in the game

So Nassim Taleb had a go at TED the other week. Over “skin in the game”.

(There’s also a paper. On skin in the game. Not on TED.) Read more

Markets Live: Monday, 25th February, 2013

Live markets commentary from 

The (early) Lunch Wrap

New president elected in Cyprus, now onto the bank bailout || New BoJ governor || China flash PMI || To the polls in Italy, with a low turnout || The UK’s downgrade hits pound || RBS to float Citizens || Revisiting the budget sequester || Markets update Read more

‘This downgrade is nonsense!’

That’s the considered opinion of Julian D. A. Wiseman (most recently head of UK rates strategy at Société Générale but writing on his personal blog here) on the Monday after Moody’s cut its credit rating for the UK from Aaa to Aa1, taking the Bank of England down with it. For those keeping count, that makes it a downgrade that was neither surprising, nor informative nor, in itself, damaging (as Martin Wolf put it)… but more to the point it was just plain silly. Read more

The Chinese PMI circus [Updated]

The flash HSBC/Markit China PMI number for February: 50.4. That’s a four-month low and quite a drop from 52.3 of January. Yet, as HSBC’s Hongbin Qu reminds us, it’s also the fourth consecutive month of expansion above 50 — the level which demarcates between above-trend and sub-trend growth.

So, what to make of it? Well firstly, Chinese New Year happened in February and, yes, you probably need to treat January and February data with caution because this holiday a) can fall in either month, and b) is huge. Read more

Kuroda! The BoJ’s goldilocks

This Monday edition of rising Japanese equities/weak yen is brought to you by Haruhiko Kuroda, president of the Asian Development Bank and according to various media reports, the likely nominee for Bank of Japan governor.

Kuroda reportedly said early this month he was quite happy at the ADB and had nearly four years to serve of his third term. But to that we say: Mark Carney! Read more

Cyprus is a small island, they DSA things differently there

Now that Cypriots have elected the guy who’ll have to negotiate how to pay for the costliest bank bailout in history (relative to the size of the economy on the world’s 81st-biggest island)…

He (and they) could do worse than look at these charts, courtesy of Gabriel Sterne at Exotix: Read more

Further reading

Elsewhere on Monday,

– Payments, finance and a proto-shadow banking system in Ancient Rome.

– The arrival of Japan’s sunset.

THAT question revisited. Read more

The 6am Cut London

Asian markets rise, yen weakens || Kuroda tipped for BoJ governor || China flash PMIs surprisingly weak || Italians go to polls || Osborne in difficult position after downgrade || Scottish currency battle looms || RBS may sell part of Citizen || RBS to pay Direct Line advisers more || BP in holding pattern  Read more