February, 2010
Comp v market cap – banks around the world
Here’s a fascinating table from Reuters (albeit slightly out of date): a ranking of the world’s biggest banks, along with the salary cheque trousered by their respective chief executives.
Note the comic disparity between Northern American execs and their peers in China.
Quote du jour, women and children first edition
Via Bloomberg:
“We are basically trying to change the course of the Titanic,” [Greek Finance Minister George] Papaconstantinou said at a conference in Brussels today. “People think we are in a terrible mess.
Europe’s ABS currency-swap exposure
Back in January, a US court rather controversially decided that claims of a Lehman Brothers special purpose vehicle — to which the bank was a counterparty — should not be subordinated to other creditors.
Greece v everyone, Eurostat and currency swaps edition [UPDATED]
It appears that Eurostat — the EU statistical agency — could no longer ignore that controversial-if-not-at-all-new Greek currency swap.
Some headlines on Monday:
Greece Ordered by EU to Uncover Swaps by End of February
Feb.
In the Q&A hot seat…
…Alfredo Pastor, former Spanish secretary of state for the economy and a senior economist at the World Bank.
He is currently professor of economics at the IESE Business School at the University of Navarra and is right now over at FT.com’s Ask the Expert,
How to borrow €1bn without adding to your public debt figures
Something tells us the story of Greece’s €1bn currency swap — and particularly the involvement of a bank everyone loves to hate, Goldman Sachs — is going to run and run.
Therefore we are going to republish a large chunk of the original 2003 story from Risk,
Fawlty Europe
As a well known European (anglo-centric) joke goes:
Heaven is a place where the police are English; the chefs are Italian; the car mechanics are German; the lovers are French and it’s all organized by the Swiss.
Is the party ending for junk junkies?
It wasn’t long ago that we posted this: “Junk bond junkies party on”. Now, investors are selling out of junk bonds at the fastest rate since September 2005, the FT reports on Monday, citing the sell-off as the latest indication that concerns over sovereign debt are hitting other credit markets.
Lunch Wrap
On FT Alphaville on Monday morning,
- The Spanish inquisition.
- The Greeks’ swap probe.
- 60 cent.
- Jim ‘the BRIC’ O’Neill’s big call.
- Greece’s personal wealth comedy.
- Japan:
Greece’s personal wealth comedy
Just to put some extra pressure on Greece’s finances, Fitch reminded at the beginning of February that a newly proposed Greek draft law was seeking to establish a personal bankruptcy framework for private individuals that could actually increase default rates.
Markets Live transcript 15 Feb 2010
Markets Live chat transcript for the chat ending at 12:19 on 15 Feb 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHKung hei fat choy NHwelcome to the year of the Tiger
Japan: it’s not what Tokyo says it’s how it gets there
A rare upside surprise from Tokyo, as it emerged on Monday that Japan’s economy expanded a faster than expected 1.1 per cent in the last quarter of 2009 compared with the previous three months, according to preliminary figures.
The Greeks’ swap probe
Der Spiegel reported last week that Goldman Sachs had helped Greece cover up part of its whopping deficit via a currency swap deal, which used artificially high exchange rates.
As it happens the Greek government has been probing the apparent misuse of currency swaps at least before February 1.
60 cent
Fresh jitters in Dubai on Monday morning.
RTRS-DUBAI FIVE-YEAR CREDIT DEFAULT SWAPS RISE TO 651 BPS FROM 627 AT FRIDAY CLOSE-CMA
RTRS-DUBAI FIVE-YEAR CDS RISE ABOVE NOV 2009 LEVELS TO HIGHEST SINCE MARCH 2009-CMA
RTRS-NAKHEEL’S 2011 ISLAMIC BOND FALLS 3.5 POINTS TO 50,
The Spanish inquisition
(Sorry, I’ll get my coat).
But on a more serious note, levels of delusion/paranoia are reaching dangerous highs in Spain.
From El País, via the Guardian.
The country’s intelligence services are investigating the role of British and American media in fomenting financial turmoil,
Jim ‘the BRIC’ O’Neill’s big call
He’s no stranger to headline-grabbing pronouncements and just to prove it, Goldman Sachs chief economist Jim ‘the BRIC’ O’Neill is back with a verrry big call on Monday, telling Bloomberg that “something’s brewing”
US CMBS deliquencies jump to 5.42%, Moody’s says
Loan delinquencies on US commercial mortgage backed securities posted a record 52bps increase to 5.42 per cent in January, according to Moody’s. In December, the rate was 4.5 per cent.
The rating agency said the increase in the delinquency rate was the largest thus far in the ongoing downturn:
Further reading
Elsewhere over the weekend and on Monday,
- Germany growls as Greece balks at immolation.
- What exactly is gold achieving within a portfolio these days?
- Can we handle the truth?
- Wall Street and Washington hope you’re gullible;
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: The US Government is running to stand still
Barack Obama’s ambitions to pass ground-breaking laws on healthcare and climate change have so far come to nothing,
Snap news
Breaking pre-market news on Monday,
- Yara International makes recommended $4.1bn ($41.1 a share) offer for Terra Industries – statement.
- Icap says it is conducting “broad ranging” strategic review of some of its cash equities businesses – statement.
Pink picks from FTfm
Comment, analysis and other offerings from Monday’s FTfm,
Storm clouds ahead for markets
Demographic factors mean returns for both stocks and bonds are forecast to be significantly lower over the next
CDS report: Banks and sovereigns intertwined
Markit’s Gavan Nolan wrote this CDS report
Some weeks ago we highlighted three factors that have emerged with the potential to trigger a prolonged correction in risky assets. A sovereign debt crisis,
Covered bond bailouts
Last week FT Alphaville mused on whether covered bonds — darlings of the European debt universe — could make it through a sovereign crisis unscathed.
Here’s a quick Friday follow-up.
From Deutsche Bank’s excellent fixed income team:
Around the world in 22 CDSs
For your amusement/unease/perusal — a collection of sovereign CDS, courtesy of CMA.
Interesting to note that the cost of protecting British or Japanese sovereign debt against default, is now higher than the cost of protecting government bonds from,
America is Lehman-fied
Last month FT Alphaville mentioned that Europe had become Lehman-fied in terms of CDS liquidity.
That is, its Fitch Solutions liquidity score was lower than it had been in September 2008, after Lehman collapsed.
Dubai CDS, deja vu
Something’s up in Dubai, and we were hearing on Friday that it just might have something to do with our favourite palm-tree island maker, Dubai World’s Nakheel.
As Reuters reported earlier, Dubai CDS has gone through the roof again:
Volcker turns the screw on Goldman
One of the more beguiling aspects of the detail-lite Volcker rule, as unveiled by President Obama late last month, was the notion that Goldman Sachs and Morgan Stanley could side-step all of the more draconian aspects of this regulatory clampdown by simply tearing up their puny deposit-taking licenses.
Lunch Wrap
On FT Alphaville Friday morning,
- Let’s throw a concert for Greece.
- Is sovereign strain Europe’s subprime?
- The speculation-backlash begins…
- … as the Euro falls.
- There are pangs of gilt(s) – again.