April, 2010
UK natural gas prices continue to disconnect from oil
UK natural gas prices have traditionally followed oil prices due to the practice of linking long-term contracts to crude in Europe.
Analysts in the market, however, are getting excited because of a nascent disconnect in that relationship,
The covered bond industry is miffed about Basel
The European Mortgage Federation has taken a closer look at what the Basel Committee’s new proposed rules — dubbed Basel III — could mean for the covered bond industry.
Turns out they’re not best pleased about two proposals in particular:
Further reading
Elsewhere on Friday,
- Greece? What’s Greece?
- “Stupid Germans…They take the ratings agencies seriously. They believe in the rules.”
- All financial reform, all the time.
- What happened to financial armageddon?
- Bond markets will never be the same after Goldman.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
George Soros: America must face up to the dangers of derivatives
The US Securities and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant.
Snap news
Breaking pre-market news on Friday,
- Prudential gets approval for Hong Kong listing, outlines AIA/rights issue timetable – statement and statement.
- BP responds to Gulf of Mexico oil spill – statement.
RBS: A Greek default would be tantamount to the end of the euro
On Thursday, RBS strategist Jacques Cailloux published a note on ‘the (irrelevance) of seniority of euro area loans to Greece’.
The piece is worth reading in full especially since the most interesting bit of the note (in FT Alphaville’s ocassionally humble opinion,
‘Big bankers stared at one another in anger and astonishment’
From the archives of Time magazine, a worthwhile read on how US bankers reacted to the “monstrous system of guaranteeing bank desposits” – aka, financial regulation, 1933 style:
Through the great banking houses of Manhattan last week ran wild-eyed alarm.
CDS report: Peripheral panic
It was a record-breaking day in the sovereign CDS market, though not for reasons that any government would welcome. Spreads blew out on a day of unprecedented volatility. Greece was was at the epicentre,
The Germans and the Greeks
As if a Moody’s downgrade and the Eurostat numbers/revision were not bad enough.
Here via Erik Nielsen — Goldman’s chief European economist — is something else Greece could do without.
[Goldman economist] Dirk Schumacher reports from the road:
Moody’s downgrades Greek sovereign rating to A3
From the wires on Thursday:
RTRS-MOODY’S DOWNGRADES GREECE’S SOVEREIGN RATINGS TO A3; ON REVIEW FOR FURTHER POSSIBLE DOWNGRADE
15:33 22Apr10 RTRS-RPT-MOODY’S CUTS GREECE’S SOVEREIGN RATINGS TO A3 FROM A2 ;
Sterling whistles past the sovereign graveyard
‘A tragedy,’ Kenneth Clarke, the British Conservatives’ shadow business secretary, said.
‘A hung Parliament is instability, uncertainty, potentially higher interest rates, potentially Britain losing its credit rating,’ David Cameron,
Guest post: Mohamed El-Erian on the worsening Greek problem
The impact of the Greek debt debacle is being felt in other markets today, Pimco’s chief executive Mohamed El-Erian writes for FT Alphaville.
European equity markets are under pressure, risk spreads on other European peripheral countries are widening (particularly Italy,
Markets Live transcript 22 Apr 2010
Markets Live chat transcript for the chat ending at 11:18 on 22 Apr 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHHello everyone NHit’s 11.03 NHand time for Markets Live
Eurostat’s bell tolls for Greek debt
Painful numbers out from Eurostat on European fiscal deficits on Thursday: the statistics agency revised Greece’s fiscal deficit upwards by a full percentage point and cast doubt on the quality of data provided by the Hellenic Republic.
Hungarian watchdog fines Deutsche Bank on FX swap deals
Fresh on the wire:
RTRS-HUNGARY FIN MKT WATCHDOG FINES DEUTSCHE BANK 90M FORINTS IN RELATIONS WITH CERTAIN FX SWAP DEALS – STATEMENT
Here, meanwhile, follow the key points from the Hungarian language press release via a very rough Google Translation:
The coming M&A cycle
Here’s some good news for merger/arbitrage funds, market punters and corporate financiers. The fall in the cost of capital (equity and debt) is enough to support $2 trillion of global deals this year.
That’s the view of Citigroup strategist Robert Buckland,
Greek debt costs get higher and higher
Greek debt doomsday bullet points for Thursday:
CMA Datavision reports Greek five-year CDS have jumped to a record high of 505 basis points versus 485.7 bps in the previous session;
Greek/German 10-year government bond yields retreat to 518 basis points,
Further reading
Elsewhere on Thursday,
- Synthetic securities are not so strange. Many retail investors own them.
- How a calm, reasonable president gets exercised about … financial regulation.
- Paulson &
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Greed is not good for Goldman
There are various ways to describe the synthetic CDO that Goldman Sachs constructed for John Paulson,
Snap news
Breaking pre-market news on Thursday,
- Credit Suisse posts Q1 net profit of SFr2.1bn – statement.
- Deutsche Bahn agrees £1.6bn bid for UK’s Arriva – statement.
- Bank of Ireland in talks on rights issue – statement.
[Abacus] In defence of Goldman Sachs
First we had a screaming WSJ headline on Tuesday:
SEC Split on Party Lines Over Goldman Case
Then someone on CNBC was shouting earlier on Wednesday about how the SEC had received testimony that…
APPEARS TO CONTRADICT THE GOVERNMENT’S CASE!
And then we had,
CDS report: Greece at fresh record wides
European credit markets fell back today as sovereign concerns weighed on spreads. There was no fresh news that triggered the widening, but it was no surprise that Greece was again capturing attention. The sovereign’s spreads hit a record wide of 495bp earlier today before settling back to around 475bp.
[Abacus] Appearing soon in the Senate – fabulous Fab (updated)
This is either genius or madness.
Fabrice Tourre is going to appear (along with his boss Lloyd Blankfein) at the Senate Permanent Subcommittee on Investigations on April 27, according to Bloomberg.
And obviously he is going to tell everyone he did nothing wrong:
Miami, spiritual home of Ponzi schemes
Fresh Ponzi news on Wednesday:
The Securities and Exchange Commission today charged a prominent Miami Beach-based businessman and philanthropist with fraud for orchestrating a $900 million offering fraud and Ponzi scheme.
Counting the cost of the IMF’s bank taxes
If the IMF really does want two big new levies on banks, we’d better run the numbers. The snap conclusion of most bank analysts is that the International Monetary Fund’s proposal for some shiny new financial stability taxes could be quite a large headache for the sector.
Why is Rusal issuing an aluminium ETF?
Why would a Russian aluminium producer be interested in launching an exchange-traded fund business?
SocGen analysts, for one, have been wondering.
The background here is that Rusal announced last week that it would provide further details of a possible physical ETF to be backed by 1m tonnes of metal in the second half of this year.
[Abacus] Dear Paulson investor…
On Monday night, Paulson & Co held a conference call with around 100 investors in the wake of the SEC lawsuit against Goldman Sachs.
(Obviously) we weren’t on the conference call, but we have obtained a copy of the letter Paulson sent to investors (reproduced in full below).
ECB’s annual report sheds light on collateral use
The European Central Bank published its Annual Report on Monday evening, providing some key insights on the nature of its operations over the last year.
Among the details — a clearer picture of the type of collateral that was pledged in exchange for ECB liquidity by eurozone banks over the year.