March, 2010
What the heck is a non-performing loan anyway?
From the European Mortgage Federation’s (EMF) study on non-performing loans in the EU on Thursday:
Available information from participating countries suggests that indicators of NPLs– arrears, doubtful loans,
FDIC’s mark-to-mayhem
File under Good intentions –> Unintended consequences –> FDIC.
The Federal Deposit Insurance Corporation, the body charged with insuring US bank deposits, has taken over about 200 banks since 2007.
Down with volatility, and down with volatility indices
The fear gauge. The chaos barometer. The weathercock of mild investor perturbation. Vix, Chicago’s almighty options volatility index, has been going down of late — having breached 17 on Wednesday, indicating that anxiety in equities is at its lowest since May 2008.
Markets Live transcript 18 Mar 2010
Markets Live chat transcript for the chat ending at 12:38 on 18 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder Paul Murphy NHGood morning NHHola to our friends in Spain
Asia is getting a little hot (money) under the collar
The warmth is spreading all over Asia-Pacific at the moment — and Taiwan’s central bank moved on Thursday to cool things down round its neck of the woods. The China Post has the details on some rather frisky fund flows:
‘A rate hike would be bullish’
Here’s an arresting graphic from Merrill Lynch’s chief global strategist, Michael Hartnett.
It shows short term interest rates during the US depression and Japan’s lost decade:
So why the history lesson?
Well,
Greece, the IMF – a timeline
Confused by the recent twist and turns in the dramatic mini-series that is the Greek bailout attempt?
Here, courtesy of FT Alphaville, is a timeline to help soothe through some of your muddles:
February
A slow grind higher
Messy isn’t it?
But the above graphic from Citigroup’s Robert Buckland makes a serious point; for all the talk about the structural impact of the global financial crisis and subsequent deep recession,
Germany’s Bank-Asset-Berg
The ABCP Matterhorn? Der Asset-Alps? Das Bank-Massiv?
Below is the net foreign asset position of banks in Germany, France, Italy and Spain.
The chart uses BIS data and was created by financial consultant Achim Dübel.
Managing the vampire squid, one scenario at a time
Referring to Goldman Sachs as a vampire squid, the graphic description evoked by journalist Matt Taibbi for a Rolling Stone profile of the mega-bank last summer, has become somewhat passé.
But the bank is still battling the godzilla-like imagery evoked by Taibbi — alongside derivatives and AIG-bailout controversies.
Further reading
Elsewhere on Thursday,
- The IMF on Europe: masters of understatement.
- Revaluation: ‘It’s China’s world, we’re just living in it’. Almost.
- The liquidity trap goes on a world tour.
- Will the Dodd bill make SEC a true enforcer?
- Equity risk premia,
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Market Insight: Why bankers must bear the risk of ‘too safe to fail’ assets
The financial crisis of 2007-09 featured large-scale losses to financial institutions from assets such as AAA rated tranches of mortgage-backed securities.
Snap news
Breaking pre-market news on Thursday,
- Aegis appoints Buhlmann as CEO, proposes bond – statement, statement.
- Iberia, British Airways to approve merger deal on March 25th – report.
- Enel sees no growth in core earnings next year – statement.
CVAs, regulation by stealth?
Our previous encounters with the concept of Credit Valuation Adjustments were at the height of the crisis, when banks started to book “profits” arising from the fact that their own debt had blown out (i.e.
CDS report: a comfortable place
The European credit and equity markets took their cue from across the Atlantic and rallied today. The Markit iTraxx Europe index was trading around 73.5bp, about 2bp tighter than yesterday’s close.
‘$50bn is a drop in the ocean’
Quick! Someone tell Steve Jobs that former Lehman executives appear to have made off with his infamous reality distortion field, if their recent statements are anything to go by.
Consider the following assorted media reports (emphasis/links ours throughout).
Fed bank supervision: the case for the defence
Ben Bernanke’s prepared testimony for his appearance before the House Financial Services Committee on Wednesday makes a case for the continued independence of the Federal Reserve, at least as far as bank regulation is concerned.
Memo to corporate treasurers: you can’t handle derivatives
Another day, another round of investment banks getting it in the neck over derivatives.
On Wednesday, an Italian judge ordered JP Morgan, UBS, Deutsche and Depfa to stand trial on charges related to a 2005 deal involving Milan and a €1.7bn bond issue.
Phantom securities at the BoE
The Bank of England, it turns out, is looking to change the type of collateral it accepts at its discount window facility (DWF), according to a consultative paper published on Wednesday.
The main proposal
An Italian derivatives headache for JP, UBS, Deutsche and Depfa
It would appear Italian prosecutors’ anti-derivatives crusade has stepped up a gear. As Reuters reported Wednesday lunchtime:
An Italian judge ordered on Wednesday four international banks to stand trial on charges four international banks to stand trial on charges stemming from a 2005 derivatives swap for a 1.68 billion euros bond by the city of Milan,
Lehman alone in its Fed-Freedom CLO bid?
One more little piece of the Lehman puzzle.
Deus Ex Macchiato points us in the direction of Volume IV of the court-appointed Examiner’s report into the Lehman Brothers’ bankruptcy. Specifically, the bank’s use of the Federal Reserve’s Primary Dealer Credit Facility,
Renminbi revaluation: it’s a world war out there
…To judge from the international institutions which were shoved into the fray over RMB appreciation on Wednesday, including the World Bank and UNCTAD. At least it means the debate is now getting to the broader problem — imbalances.
Markets Live transcript 17 Mar 2010
Markets Live chat transcript for the chat ending at 12:16 on 17 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHTop of the morning to you NHand happy St Patrick’s day to everybody
Would that be the smell of burnt GBP fingers?
Oooh, here’s some hubris for you.
Just when the pound was notching up some stellar gains against the euro on the back of a larger than expected fall in the UK jobless claimant count, Jim Rogers — he of ultimate sterling weakness talk — was on CNBC Europe reiterating his position on the Great British Krona.
Executive moonlighting – Prudential edition
If you thought Tidjane Thiam had enough on his plate trying to persuade shareholders to back the $35.5bn acquisition of AIG’s Asian business — well, think again.
The Prudential boss apparently has time to go plural.
Daitiye nam rizyku!
Here’s a telling factoid from BNP Paribas’ Emerging Markets team on the state of global risk appetite.
A Ukrainian local debt auction on Tuesday attracted what the analysts described as “spectacular and unprecedented demand from international investors”.
Dividend overboard at Man Group?
Strange but true. One of the highest-yielders in the FTSE 100 is Man Group. Shares in the struggling hedge fund manager offer a prospective dividend yield of almost 12 per cent (in dollar terms).
Usually when a blue chip company yields that much it can only mean one thing — the dividend is about to be slashed.
A UK labour boom (updated)
Not of the political variety either.
The UK’s office of national statistics announced on Wednesday that the number of Britons claiming unemployment benefits fell unexpectedly in February by the biggest amount since November 1997.