May, 2010
‘The ECB will be forced into the end game’
Oh dear. How quickly the market moves.
Andrew Garthwaite, Credit Suisse strategist, has called time on this Greece crisis. Instead, he’s now focused on “the end game” — the European Central Bank buying bonds,
Who’s most at risk of falling into a European debt trap
Who’s driving who in the complex interplay between European bond markets and sovereign ratings?
Deutsche Bank’s Bernd Volk aptly summed up the situation late last week:
In its downgrade of Spain to AA from AA+,
Guest post: BCP’s Walter Molano says it’s hard to feel sorry for Greece
Walter Molano is the head of research at BCP Securities, an emerging markets-focused investment bank.
More than two thousand years ago, Aristotle stipulated that the art of rhetorical arguments was divided into three fundamental styles.
Further reading
Elsewhere on Wednesday,
- The Greek drama is far from over.
- So how has financialisation changed the real economy?
- The open source approach to bonds.
- Presenting the world’s simplest portfolio.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: A bail-out for Greece is just the beginning
Desperate times; desperate measures. After months of costly delay, the eurozone has come up with an enormous package of support for Greece.
Snap news
Breaking pre-market news on Wednesday,
- Prudential delays AIA rights issue as talks with FSA over solvency continue – statement.
- Xstrata Q1 copper output up 3 per cent to 222,971 tonnes – statement.
Pre-avoiding regulation, Goldman style
How does this work?
Goldman argues that the highly profitable, tailored segment of the derivative business is unable go on an exchange due to low volumes or pricing difficulty. Alternatively, these high margin OTC products will likely be cleared through a common settlement venue,
Vigilante finance
The following Reuters flash only caught our eye because of the involvement of an associate company…
So, there appears to be an “investigation into possible breaches of fiduciary duty and other violations of state law by members of the Board of Directors of Interactive Data Corporation…
JPM wishes the adults were in charge of financial reform [UPDATED]
FT Alphaville has only one thing to say about the following note from JP Morgan economist James Glassman: ouch.
Below are selected highlights from the note, which Glassman sent out to clients on Monday:
Merkel’s calls for ‘orderly insolvencies’ threaten more disorder
There’s nothing quite like a crisis to expose the underlying cracks and fissures in both political systems and regulatory frameworks.
According to Bloomberg reports, Germany’s coalition government,
CDS report: Peripherals capitulate
* Peripheral sovereigns capitulate as bailout fails to reassure
* Greece 725bp (+23), Portugal 380bp (+95), Spain 200bp (+38), Ireland 220bp (+30), Italy 156bp (+14)
* UK 82bp (+7). Widening appears to be driven by broader market correction rather than pre-election jitters
* Sovereign turmoil affecting the corporate markets – Markit iTraxx Europe 9.25bp wider at 96.5bp,
Going nuclear at the ECB
With markets across Europe reeling on Tuesday, will the European Central Bank have to press the nuclear option button and start buying government bonds?
Gary Jenkins of Evolution Securities is one of an increasing number of analysts who think it might be the only way to stop the contagion spreading.
¡¡¡The un-rally monkey!!!
Related links:
Greek contagion fears hit Europe stocks – FT
Eurotrash – FT Alphaville
Spain’s PM decries market ‘madness’ – FT Alphaville
Oh, those naughty short selling…US senators?
Hats off to the Wall Street Journal for delving into the two-facedness of US legislators, at least as far as short selling is concerned.
In a story published on Monday, the Journal reported that “some members of Congress made risky bets with their own money that US stocks or bonds would fall during the financial crisis”.
Spain’s PM decries market ‘madness’
Spain’s prime minister José Luis Rodríguez Zapatero sought to reassure investors on Tuesday as the country’s Ibex equity index fell and amid rumours of Spanish interest in a €280bn bailout. (Le Figaro reported on the chatter).
Eurotrash
A small indication of the carnage across European markets on Tuesday just as US markets opened.
The FTSE 100, off about 2 per cent:
The Ibex 35 down as much as 4.6 per cent:
Spanish banking giant Santander trading some 5.4 per cent lower:
A glimpse into financial hell
Alan Ruskin has peered into the abyss of a US sovereign debt crisis to see what the world might look like. Unsurprisingly, it’s not a nice place.
Food commodities would be about the only thing left worth owning,
Sovereign woes are a pain in the periphery
Equity markets in Spain and Portugal tumbled on Tuesday, undermining hopes — and politicians’ assertions — that the €110bn Greek rescue package would quell fears of eurozone contagion.
David Shairp,
Deutsche Bank will support Greek bonds
Well, here’s one more happy German buyer of Greek bonds. Deutsche Bank’s CEO Josef Ackermann publicly declared his support for Greek sovereign debt on Tuesday.
Flashes, via Reuters:
RTRS – DEUTSCHE BANK CEO SAYS IMPORTANT TO EXTINGUISH FIRE IN GREECE
RTRS – DEUTSCHE BANK CEO SAYS WE WILL PARTICIPATE IN HELPING GREECE,
Markets Live transcript 4 May 2010
Markets Live chat transcript for the chat ending at 11:20 on 4 May 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHbonjour NHhola
The horrid Henry Tax
Messy, complicated, confusing and ultimately damaging for investment in mining down under.
That’s reaction in the City of London to the Australian government’s plan for a 40 per cent tax on profits generated by resource companies (the so-called Henry Tax),
Iberian contagion, redux
Pain on Tuesday for Spain’s Ibex (down 2.75 per cent) and Portugal’s PSI (down 1.2):
Numbers correct as at pixel time. So did the Greek bailout stop contagion fears? Er…
£19.5bn and counting
That’s that value wiped off BP’s market capitalisation following that oil spill in the Gulf of Mexico:
And seemingly the more analysts say the share price fall has been an overreaction, the further BP falls.
Essar Energy – ‘fail’
London’s biggest flotation since the onset of the financial crisis has got off to a less than spectacular start on Tuesday morning.
Recall that Essar, a £5.4bn oil and gas producer being spun out of one of India’s biggest conglomerates,
A British bond market all-nighter
Pity those UK bond traders.
Instead of playing general election drinking games on Thursday night, when Britain goes to the polls, they’ll be busy trading gilt futures.
The London International Financial
Do you hear the peoples sing?
Singing a song of angry Greek men. For this was the scene upon the Acropolis in Athens on Tuesday:
That, of course, follows Europe’s €110bn bailout pledge for Greece this weekend. Charming.
Who’s buying Greek bonds?
These 15 (German) men:
Plus four others, and one woman, according to the Monday edition of German paper Handelsblatt.
The feature, titled “Wir kaufen griechische Staatsanleihen!” or “We’re buying Greek government bonds!”