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 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
Live markets commentary from FT.com
A telling chart from Citi’s Steven Englander:
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 crises. Read more
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) (Bloomberg) Read more