April, 2010
Rooting for Goldman
Spencer Jakab, from the FT’s Lex team, has produced a lovely On Wall Street column, speaking up for a bank that many have chosen to hate.
It’s packed with anecdotes and well worth a read. Here’s a taste:
‘We are wall Street…we are smarter and more vicious than [dinosaurs]‘
If anyone knows who wrote the following email, which has been pinging around Wall Street and across prop desks, tell ‘em get in touch with FT Alphaville. We like the writing style.
“We are Wall Street.
FX gyrations
Something is afoot in the foreign exchange market.
Both Citigroup and Barclays Capital put out notes on Friday suggesting the market should be in for some sizeable dollar selling, on the back of month-end portfolio fixings by fund managers.
Get Goldman
Goldfellas
Business of protection
Vampire shark
Orange jump-suits anyone?
Those in the investment banking business – outside of Goldman Sachs, that is – have quietly enjoyed the fact that Goldman has some how managed to attract all the regulatory and political heat over the past year or so.
[Abacus] Understated Research Headline of the Year, Part II
Hello criminal probe, goodbye hard-earned reputation — and, er, about seven per cent off Goldman Sachs’ stock, as at pixel time.
This note from a Merrill Lynch analyst says it all:
We are lowering our rating on GS to Neutral from Buy and our price objective to $160 from $220.
Can Portugal cut it?
Greece has agreed to find €24bn in fiscal savings in order to stave off default and get international aid back on track. Austerity is back in Athens, at last. Or so we hope.
Now how about Lisbon?
After all,
Moody’s cuts nine Greek banks
Greek banking pain, again, as the country’s financial institutions reel from the effects of one sovereign downgrade from S&P — and expect action from Moody’s soon.
The latter agency had some bad news in the meantime.
Presenting, the Eurozone-Trapp finmin family
It’s ‘Greek bailout’ hype Friday, which means the eurozone finance ministers are once again preparing to talk aid packages over the weekend.
A Reuters snap confirmed that there would indeed be (yet another) ministerial huddle:
Markets Live transcript 30 Apr 2010
Markets Live chat transcript for the chat ending at 11:20 on 30 Apr 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHello there NHIt’s 11.03am NHand time for some more Markets Live
[Abacus] Call the cops
If you thought the media was starting to lose interest in that Goldman Sachs fraud case, think again.
The Wall Street Journal:
Federal prosecutors are conducting a criminal investigation into whether Goldman Sachs Group Inc.
The UK is the next Greece (updated)
(Now with added graph and context)
As investors scramble to protect themselves from the next credit flare-up in Europe, their worries are spreading to the U.K.
So writes the Wall Street Journal on Friday morning.
How Greece is contaminating European financials
Erste Bank’s research analysts draw attention to the following chart of the iTraxx Senior Financials versus the iTraxx Main index on Friday:
There is a notable breakout in the financials index — which represents the cost of insuring the senior debt of 25 European financial companies against default — at the beginning of April.
Lehman-Greece parallels du jour
Spotted off the coast of Germany, the lesser-yielding Bubill:
That’s the yield on the three-month German bill, and it is has been verging on the negative in recent days. In fact it reached a low of 0.09 on April 20 — the day Bundesbank President Axel Weber said Greece may need more bailout money than initially expected.
When what Mervyn King says in private goes public
Or, how one paraphrased quote is making lots of trouble.
Here’s the offending remark:
“I saw the governor of the Bank of England [Mervyn King] last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be.”
Further reading
Elsewhere on Friday,
- Lights! Camera! Information asymmetries!
- Why Greece is good for US mortgage rates…
- …while China looks on.
- Testing European banks’ solvency.
- Pointing fingers at the ECB.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Banking regulation bill is too big to succeed
The debate about financial reform is reaching fever pitch in Washington and on Wall Street,
Moody’s holds fire on Greece – for now
Breaking…
London, 29 April 2010 — Moody’s Investors Service has today announced that it expects to complete its review of Greece’s A3 sovereign bond rating shortly after the details of the euro area/IMF programme are unveiled.
Creative comp – Fuld claimed to have earned $200m more than he stated
You’ll have to bear with us a little here. Bloomberg are running a story that says Lehman’s brooding chief executive, Dick Fuld, was paid 70 per cent more than he claimed during the period 2000 to 2007 – $529.4m rather than the “less than $310m”
Porsche ‘Great Squeeze’ action doubles in size
The events of October 2008, when all those hedge funds betting against the runaway price of VW got their proverbials squeezed, were rather lost amid the chaos of the banking crisis at the time. But the wreckage is still being sorted – and the litigation is growing.
China’s lending boom, illustrated
Spot the odd one out in a Fitch survey on Thursday of emerging bank sectors (click to enlarge):
Yep. China and its lending boom — which authorities are now racing to rein in.
As Fitch’s analysts write (emphasis ours):
For the ECB – ‘The door is locked, there is no exit…’
Screech. Halt. About-turn.
Speculation is rising that the ECB will be left with no choice but to reverse its liquidity withdrawal measures on account of the European-debt crisis.
The latest bank to opine as much is Italy’s Unicredit.
Leaders’ debate – Live
Join the Westminster blog team on Thursday night for a live blog covering the final televised leaders’ debate, which will focus on the economy.
This time the event kicks off at 8:30pm BST on the BBC,
Spain and Portugal: the story so far
Welcome to the Iberian Age of Europe’s sovereign debt crisis. Markets have rushed to scrutinise Portugal and Spain, following S&P’s downgrades of both countries this week.
Well, FT Alphaville’s been there,
11 reasons why Britain isn’t the next Greece
These come from RBS FX strategist Paul Robson, who is none too happy that the Great British Krona (aka sterling) is not benefiting from the eurozone turmoil.
As he writes (emphasis ours):
It’s frustrating to see GBP not fully participating in EUR weakness.
Risky like it’s 2007
Call it the madness of markets or the easing of credit crisis indicators.
But high-yield debt, better known as junk bonds, is now trading almost at par value.
From Forbes:
The riskiest class of corporate bond has inched close to par for the first time since 2007.