February, 2010
The SNB can’t help intervening
Looks like the SNB has been at it again:
The Swiss franc weakened as much as 0.4 per cent on Tuesday, the most since February 5, according to Bloomberg. There was no comment from the SNB on whether it was down to central bank intervention,
THIS WAY TO THE ATHENS STOCK EXCHANGE –>
Well this was bound to happen.
About 200 Greek trade unionists have blocked the entrance to the Athens Stock Exchange.
Exchange staff have been unable to enter the building since around 6:45 a.m.
Further reading
Elsewhere on Tuesday,
- The Deflationist.
- Don’t ‘bail-out’, just ‘bail-in’.
- Adventures of a foreclosure attorney.
- The one chart that scares Richard Russell.
- A curious instrument of deflation torture?
- Another recession casualty:
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Jonathan Bell: China at risk of a home-grown financial crisis
The pathology of the western financial crisis is all too familiar: misallocation of capital fuelled by cheap credit and lax regulation,
Snap news
Breaking pre-market news on Tuesday,
- AstraZeneca settles transfer pricing dispute with HMRC, to pay £505m – statement
- Office of Fair Trading says Reckitt Benckiser sought to restrict competition to Gaviscon – statement
- Luminar,
And a round of applause for those who blew up the economy…
We’d never heard of the Dynamite Awards before, but they appear to be — in ethos at least — a distant cousin of the notorious Darwins.
But unlike the Darwin Awards, these gongs aren’t handed out to those who’ve managed to kill themselves in inordinately silly ways.
Dubai World: the restructuring that keeps on giving
The debt shenanigans at Dubai World are keeping analysts, investors and the financial media quite busy.
In the latest issue of Moody’s Weekly Credit Outlook, the rating agency estimates that Dubai World’s UAE-based creditor banks “would incur losses amounting to only around 9 per cent of their capitalization as of year-end 2009″
CDS report: walking(out) on Air
Markit’s Otis Casey wrote this CDS report
Anxiety was high in Europe today not because of movement in the sovereign markets as has been the case but rather due to the airlines. Union strikes, particularly from pilots,
A little perspective on the euro?
The “everyone is shorting the euro” story continued to hold court in the financial media space on Monday.
Bloomberg noted that:
“Euro Worst to Come as Greece Hammerlocks ECB on Rates ”
While Reuters observed:
Eric Daniels no longer the last man standing
Yep, the CEO of Lloyds, is going to waive his 2009 bonus of £2.33m.
Not that he had much choice in the matter after his opposite number at RBS, Stephen Hester, announced on Monday morning that he would forfeit an estimated £1.6m in bonus,
‘Half-baked justice at best’
So why accept it, you might ask?
Unlike the cheery countenance portrayed in his stock pic, Judge Jed Rakoff has been all scowls since the day he picked up the case of SEC v Bank of America Merrill Lynch.
Goodbye to the risk-free rate
Morgan Stanley’s Graham Secker has put out an interesting note on the rising cost of capital on Monday.
And it’s not a cheery read if you happen to be a sovereign issuer, given the shift of private-sector debt into the public sector.
Dubai World debt: to pay or not to pay?
Further developments in the Dubai World restructuring saga.
The Dubai government is no longer seeking preferred creditor status, according to Reuters. If true, that removes a key sticking point in the $22bn debt work-out discussions.
Bank of Spain to raise provision requirements?
On Monday, Reuters citied Spanish media on a story that the Bank of Spain was considering raising the minimum amount banks must hold in provisions against potential losses on property assets.
According to the news wire,
The defensive Goldman Sachs [updated]
On Monday, Goldman finally acknowledged those Greek currency swaps with a statement of the bleeding obvious. The swaps were legal the bank says, and consistent with the rules at the time etc.
All of which is true,
Anthony Bolton’s ‘stagging’ risk
Stagging: buying into an IPO and flipping at the first opportunity.*
Anthony Bolton’s soon-to-be launched China investment trust runs the risk of being ‘stagged’, Fund Strategy said in a report on Monday.
Guest post: Roger Ehrenberg asks, ‘are derivatives the real problem?’
Roger Ehrenberg, a veteran of Wall Street (and derivatives), contends that the focus on the ‘evils’ of the derivatives market is misplaced.
Regulators, Congress, and the media generally focus on the crisis at hand.
Lunch Wrap
On FT Alphaville Monday morning,
- CMBS then and now, and in 2006-2008.
- Shareholder activism, Mike Ashley-style.
- A new(ish) sovereign to short.
- CLSA is in Tokyo. Not Rio.
- A JPM dust-up Down Under.
Total refinery strike down *alert*
Here’s a story that’s currently topping the minds of most energy traders in Europe, via Bloomberg:
Feb. 22 (Bloomberg) — Total SA unions called for a refinery strike to spread to all French plants and said fuel shortages could be imminent.
VaR and piñata pensions reform
Here’s something you may have missed down Mexico way.
From the Wall Street Journal:
[Mexico's pensions regulator] Consar also approved modifications to the [Mexican pension funds} Afores’ risk control methodology in order to avoid forced asset sales during periods of extreme market volatility in order to comply with value-at-risk limits.
Markets Live transcript 22 Feb 2010
Markets Live chat transcript for the chat ending at 12:22 on 22 Feb 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHhola NHand welcome to Markets Live
CLSA revives Tokyo’s ‘high touch town’
Who said Tokyo, as an investor destination, had lost its mojo?
At least, this week, as Asia-focused brokerage and investment firm CLSA kicked off its 7th annual Japan Forum at the Grand Hyatt hotel in central Tokyo,
How do you say speculators in Japanese?
Which sovereign(s) would you short?
There’s a plethora of options based on fiscal positions, as the chart, courtesy of Sean Corrigan at Diapason Commodities, shows. For now though, we’d note that the biggest outlier — Japan — might be starting to become more popular among certain speculating factions.
Shareholder activism – Mike Ashley style (updated)
You have to admire the chuzpah of the Sports Direct owner — he’s the one on the right by the way.
His company might face an OFT probe into alleged cartel activity in the sports retail market, and a criminal investigation by the Serious Fraud Office.
CMBS then and now, and in 2006 to 2008
Bored of US commercial real estate yet?
Not us. Nor, it seems, are the ratings agencies.
Standard & Poor’s issued its latest quarterly report on US commercial mortgage-backed securities (CMBS) late on Friday.
JPMorgan’s dust-up Down Under
Investment bankers everywhere might want to keep a watchful eye on a relatively small but highly symbolic legal battle taking place in Australia.
An Australian court on Monday was set to hear the case brought by JPMorgan Chase’s Australian arm against Palmary,
Further reading
Elsewhere on Monday,
- AIG and Greek government debt. Dear God, no.
- Whither junk?
- Still toxic after all these years!
- The right lessons from interest rate swaps.
- Let’s create a really,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
George Soros: Questions for Europe and the euro
The survival of Greece would still leave the future of the euro in question, says Soros, chairman of Soros Fund Management and author of the Soros Lectures,
Snap news
Breaking pre-market news on Monday,
- BAA reports FY pre-tax loss of £821.9m – statement.
- Lufthansa halts 67 per cent of flights as four-day pilot strike starts – Bloomberg.
- Sports Direct says will vote against resolutions proposed by Blacks Leisure at this week’s AGM – statement.