June, 2010
CDS report: Spreads overflowing
Investors with appetite for risk were still on the back foot today as spreads continued to widen. A late sell-off in US markets yesterday ensured that European spreads would open wider this morning.
Greek fire (sale)
Welcome to Austerity Greece.
The Hellenic Republic’s government committed to a rather impressive bout of privatisation on Wednesday, according to flashes from Reuters:
RTRS-GREECE TO SELL 49 PCT OF
Post-apocalyptic Pru
Cheer up, Prudential. Tomorrow’s another day, even if your ‘transformational’ bid for AIA has blown up and your chief executive is looking ready for the chop.
So let’s look at the case for moving swiftly on.
Bailed-out bank stakes cost UK £3.2bn a year, JP Morgan says
Worried about Britain’s public debt figures? Blame the bailed-out banks.
JP Morgan has published a 48-page note on the UK government’s stakes in some rescued financials; Royal Bank of Scotland and Lloyds Banking Group to be specific.
Markets Live transcript 2 Jun 2010
Markets Live chat transcript for the chat ending at 11:14 on 2 Jun 2010. Participants in this chat were: Bryce Elder Miles Johnson, FT BEGood morning. BEIt’s 11:04am BESo it’s time for another Markets Live
Selling Germany, buying Greece
Or, the German safe haven status that never was.
According to Citi’s latest bond and swap analysis, over the course of May bond traders have been selling out of German debt and buying into Greek debt (and the Netherlands).
Japan’s post-Hatoyama outlook: ‘Shades of drab’
News on Wednesday morning of the resignation of Japanese prime minister Yukio Hatoyama after just eight months in power has caused much more of a political stir than a financial one, as the FT noted in a report with the distinctly unflattering (for the hapless Hatoyama) headline:
Greek exposure one-upmanship
Earlier this week Germany’s Spiegel reported that ze Germans were a tad miffed at les French.
The reason: the European Central Bank’s recently-launched government debt-buying programme (the SMP) is unduly benefiting French banks,
To Brazil, from Europe with love
How far away can the volatile effects of the eurozone crisis be felt?
As far away as Brazil, apparently.
On Tuesday, the emerging-markets powerhouse experienced what basically amounts to a failed bond auction.
Famous last words
From Prudential’s statement ending the AIA deal on Wednesday:
Related link:
Thiam in the line of fire as deal fails – FT
How much is a Japanese PM worth?
How much is a Japanese prime minister worth to investors and markets?
Not that much, it would seem, judging from the sluggish investor reaction to Wednesday’s news that Yukio Hatoyama had become Japan’s fourth prime minister to resign in four years.
Further reading
Elsewhere on Wednesday,
- A less naive model of sovereign risk?
- Rogoff on regulation and spilt oil.
- Sell in May and stay away?
- Shanghai contrarian.
- The Indian flash crash.
- Missing the fix-the-financial-system trick.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: The grasshoppers and the ants – elucidating the fable
Fables seek to illuminate reality, says the FT’s Martin Wolf, who wishes to address two questions:
Another Japanese PM falls: Hatoyama out
Yukio Hatoyama on Wednesday announced his decision to resign as Japan’s prime minister just eight months after his Democratic party swept into power, as opinion polls showed his support slumping to perilous lows,
What’s the right amount to pay bankers? Less.
Dan “Predictably Irrational” Ariely is promoting his new book, and as part of his promotathon, has published a teaser over at the TEDBlog.
The subject: banker pay.
Ariely’s argument will not go down well with the likes of the Johns Mack and Stumpf,
‘The eurozone has failed,’ Czech president says
Václav Klaus, president of the Czech Republic since 2003, is not impressed with Europe’s single currency experiment. In fact, he thinks the eurozone is a failure.
As he put it in an essay in the Wall Street Journal on Tuesday:
BP – a takeover target? Part II.
BP’s stock continued to take a battering late in London trading on Tuesday, after its engineers failed to top-kill the Deepwater Horizon well leak — as the chart shows:
By the close in London, BP’s shares had fallen 13.1 per cent.
Meddling Mandy lives on
The UK Takeover Panel finally published its proposed changes to the Takeover Code on Tuesday — and perhaps suitably for the post-Kraft era, they’re rather stringent.
Lord Mandelson, the former Business Secretary who inspired them,
Taleb explains his tweets
Nassim Nicholas Taleb, of Black Swan fame, doesn’t just tweet on Twitter.
He now tweets the explanations for his Twitter tweets on Twitter.
So if the below Friday tweet left you in a confused state:
Markets Live transcript 1 Jun 2010
Markets Live chat transcript for the chat ending at 11:12 on 1 Jun 2010. Participants in this chat were: Bryce Elder Tony Tassell BEGood morning. BEAnd welcome to another Markets Live
Front-running money market fear
You are probably familiar with parallels between current money market stress and that experienced post the collapse of Lehman Brothers in 2008.
But there’s a key difference, as highlighted by the fixed income analysts at Deutsche Bank.
Commods plays: Clever or daft?
Given the debate — and doubts — assailing the commodities sector, it could be a very good — or very bad – move by Calstrs (the Californian State Teachers Retirement System), the second-biggest US pension fund,
Le SMP, le bailout Français
Oooh, go on central bankers: It’s a Germany vs France ECB-beef.
On Monday, Germany’s Der Spiegel claimed that German central bankers had hit out at the European Central Bank’s government bond-buying programme (the SMP) for .
BP a takeover target?
The news on BP and its seemingly uncontainable oil leak in the Gulf of Mexico “just gets worse”, as Lex observes in typically understated style on Tuesday.
That’s on both the financial and leak-containment fronts,