Posts from Friday Oct 4 2013

A debt default’s calamity transmission mechanism

Dick Bove has a widespread reputation for Bloomberg-unfriendly borderline-delusional persistent bullishness on bank stocks (then walking back said bullishness, then reasserting it later).

But his note on the potential effects of a US treasury default is every bit as apocalyptic as the warnings coming out of the Treasury department. While the latter is naturally focussed on the possible economic impact, Bove gets into the immediate consequences for the financial sector. Read more

The banks are OK, Friday chart edition

The European asset quality review is on its way! Or at least details of how the ECB plans to run the so-called AQR are due this month. We expect fine tooth combs, desk lamps in faces and penetrating stares.

But, as the Economist explains, it is not a stress test. That would be all about simulating disaster to spot it in advance. Read more

Computing the bill for European taxpayers, come the next crisis

Pity the French…

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Markets Live: Friday, 4th October, 2013

Live markets commentary from 

The (early) Lunch Wrap

Good morning New York,


Swap ye not Argentine bonds


DECLARED that for the avoidance of doubt (i) the implementation of the plan to allow Exchange Bonds to be exchanged for securities or similar instruments payable in Argentina, which was announced by President Fernandez de Kirchner in her speech of August 26, 2013, (ii) implementation of any functionally equivalent or reasonably similar plan, or (iii) any step towards implementing (including without limitation the formulation or design of) such a plan or a functionally equivalent or reasonably similar plan, each would violate the Anti­ Evasion Injunction of the March 5 Order and Paragraph 2 of this ORDER…

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Hold on, the periphery looks relatively calm?

A telling chart from Citi’s Steven Englander:

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Further reading

Elsewhere on Friday,

– Twitter’s share-class equality (but mind the voting agreements, and the naughty y-axes).

Shutdown markets in everything.

– “If the Communist Party of China could vote in US elections, they’d vote Libertarian.”

Phantom crisesRead more

The 6am London Cut

Markets: Major bourses across Asia Pacific turned downward on Friday after the S&P500 experienced its worst session in more than a month. Stocks headed lower and the US dollar remained under pressure as the government shutdown continued for a third day. (Financial Times) (Reuters) (BloombergRead more