Posts from Tuesday Mar 19 2013

The Closer


FT markets round-up: “Uncertainty over the situation in Cyprus made for another nervous session in the markets, as the country’s parliament overwhelmingly rejected a tax on bank deposits, throwing into question plans for an international bailout. The ECB responded to the Cypriot vote by reaffirming its commitment to provide liquidity, within existing rules. That helped the euro pare an earlier fall that had seen it touch a four-month low against the dollar. Global equities also rallied off their lows, with the FTSE All-World index trading 0.3 per cent lower and the S&P 500 ending down 0.2 per cent. In Europe, where stock markets had already closed by the time the news of the vote emerged, the FTSE Eurofirst 300 finished with a loss of 0.4 per cent. Spanish and Italian stocks came under greater pressure amid fresh concerns about the potential for contagion from Cyprus. The Ibex 35 index in Madrid fell 2.2 per cent and the FTSE MIB in Milan shed 1.6 per cent.” (Financial TimesRead more

You say nein, we say oxi [updated]

No: 36
Yes: 0
Abstain: 19

That’s the result of Cypriot MPs’ vote on the current version of the bank deposit levy, rejecting it as a condition of the island’s bailout. Note that the ruling party abstained. Still, that is the first no, after all these years and the bailouts, to the Troika. Read more

So, are they stupid?

To be perfectly honest, trying to second-guess Cyprus isn’t gonnna get us anywhere. The situation at pixel time was moving too fast at too great a distance. While we wait for a tiny bit of clarity — whether this evening’s vote on the bailout will go ahead is till unclear, let alone what the outcome will be — a question being asked by Credit Suisse’s William Porter and team seems apropos: What if they’re not “stupid”? Read more

03/23/2012 06:20:09 BRUNO IKSIL, JPMORGAN CHASE BANK, says: i did not fail

06:19:55 BRUNO says: u will feel less alone very soon
06:20:06 BRUNO says: but like u
06:20:09 BRUNO says: i did not fail
06:20:16 BRUNO says: this is not what i will be told
06:20:25 BRUNO says: unlike you Read more

Humongous credit derivatives cake proves inedible

As we wrote in our last post, the structured credit portfolio (SCP) that ended up costing JPMorgan some $6.2bn was probably meant to hedge something somewhere. But seeing as we can’t be sure of exactly what that was, maybe we should all stop pretending it was anything other than a prop trade. Hedges do not spring forth from good intentions alone, after all.

What seems more likely is that the portfolio had done quite nicely over time, especially in relation to the relatively low headcount needed to run it, so it wasn’t policed as hard as it should have been. Read more

Political blowback from Cyprus

The Game of Cyprus is still being played and the incredibly liquid situation could change in a matter of hours. It’s fitting really, given that it kicked off in similar mannerRead more

Markets Live: Tuesday, 19th March, 2013

Live markets commentary from 

What did the ECB tell Cyprus?

The ECB’s role in this eurozone crisis/saga has been complex.

Yes, yay for Draghi with the OMT/whatever it takes and before that, the LTROs.

But there’s a couple of other niggles that have been highlighted, yet again, by the Cyprus ‘bail-out’. Read more

Its purpose limited only by one’s imagination…

Once upon a time, there waz a big, big bank called Jay Pee Morgan. Also there waz a crysis! Everywon was wery scard. Som of the otha big banks got in trobel. Dis made Jay Pee Morgan ewen biger. So big that is Chwef Inwestment Ofwice hade $350bn dolars. Dis means it waz da sventh bigst bank in the countree if it was all on is own! Al so Jay Pee Morgan was big caus had got a big Bear and also took all the piggybanks dat Washtown Mootowel had. Meanie.

Some da $350bn dollarz froom all da piggybanks was inwested in kredit derivativs. But the stwange ting waz, none of the grown-ups seem to no why… or wha phor. Silly grown-ups!

* * * * *

Seriously, it’s that awkward trying to figure out what the structured credit portfolio (SCP) of JPMorgan’s chief investment office (CIO) — that lost the bank some $6.2bn — was meant to be doing or hedging. Read more

The (early) Lunch Wrap

Cypriot authorities rushed to renegotiate the terms of under threat €10bn bailout || Japan’s crippled Fukushima Daiichi nuclear station suffered a power failure on Monday night || Citi to pay $730m in subprime class action deal || Blackstone considering Dell bid || Brussels green light for Italy debt sale || Argentina charges HSBC with money laundering || China’s foreign direct investment rose || Ryanair unveils $15.6bn Boeing order || Contractors reap $138bn from Iraq war || Markets roundup || Alphaville’s latest Read more

In Memoriam – Australia’s inverted yield curve

Remember Australia’s inverted yield curve in 2012?

 Read more

Further reading

Elsewhere on Tuesday,

Troika manual (for wrecking countries).

– The Game of Cyprus.

– What Cyprus really shows (hint, involves ECB). Read more

The 6am Cut London

Asian stocks rebound somewhat || Cyprus vote postponed until today; rush to revise deal || Citi to pay $730m in subprime class action deal || Power failure at Fukushima || Argentina charges HSBC over money laundering || The ECB’s role in bailouts comes under scrutiny Read more

What will Russia do?

Nicos Anastasiades is between a rock and a hard place.

On one side there’s Cypriot citizens and official creditors — all, it seems, not liking the levy on deposits below €100,000 — and on the other, Russia. Read more