July, 2010
Phantom European securitisation del día
Is Bloomberg trying to tell us something about the ICO’s new €23bn CLO?
July 26 (Bloomberg) — Instituto de Credito Oficial, a Spanish government agency that lends to businesses, plans to issue 14.8 billion euros ($19.22 billion) of bonds backed by company loans .
CDS Port(ugal) in a sovereign storm
Warning: This is not your standard PIIGS Club Med European peripheral CDS post.
Risk’s excellent Duncan Wood reports on Tuesday that Portugal’s debt office is now agreeing to post collateral to derivatives dealers.
Further reading
Elsewhere on Tuesday,
- “We had to burn the euro to save it.”
- Are Jedi knights libertarian or socialist?
- Doing business in China.
- The oddest Wall Street Journal woodcuts.
- Has the recession really ended?
- “The Bank of England has taken the first step to nationalising consumer credit.”
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Terrence Keeley: Now let us stress-test the central banks
Though their details deserve debate, the underlying logic of the US and European commercial bank stress tests is irrefutable,
Snap news
Breaking pre-market news on Tuesday,
- BP reveals $17bn loss; $32.2bn pre-tax charge — statement and statement.
- Dudley takes BP helm; Hayward nominated for TNK-BP post — statement.
- Tomkins valued at £2.89bn in Pinafore acquisition — statement.
Of butterflies and stress tests
How are the European bank stress tests like a butterfly?
We think we know — thanks to Deutsche Bank’s take on the Spanish banks’ stress-test results on Monday.
Deutsche have probed the provisions on loan losses,
Overheard in the Long Room
Members of FT Alphaville’s private finance forum, the Long Room, enjoy (and regularly engage in) spirited debate. Here’s a selection of what’s been said and posted just recently:
- User Praxis22 philosophizes on the ‘problem with wisdom’ over on Monkey’s Table.
From Bank of England to Bank of Everything
Financial Services Authority, the name of thy doom is, er, one of a selection of rubbish acronyms – as detailed in HM Treasury’s white paper on UK financial reform, released on Monday.
We’ve thus now got a bit more detail on the FSA’s successors — which include the PRA,
The Great (Economist) Mortification
Will Philip Mirowski be getting an invite to the next economist shindig?
Perhaps not.
The Carl Koch Professor of Economics and the History and Philosophy of Science at the University of Notre Dame has taken a flame-thrower to the post-crisis explanatory powers of his colleagues,
Markets Live transcript 26 Jul 2010
Markets Live chat transcript for the chat ending at 11:16 on 26 Jul 2010. Participants in this chat were: Bryce Elder Tony Tassell
BEGood morning
BEAnd welcome to Markets Live
Monday funding fears
So much for any interbank market relief after the stress tests.
The below just out from the European Banking Federation:
That’s about a one-year high for the Euro Interbank Offered Rate.
The slow upward grind of money market rates is a bit of an issue for some European banks.
The case for German and French non-financials
Stock markets have bounced up and down recently, as fears of a double-dip recession have alternated with bouts of confidence that the recovery will continue. Even so, UK-based economist and commentator Andrew Smithers noted in a recent report,
Gaming the stress tests 101
This probably would have been more useful before July 23, but oh well.
Much like the US stress tests conducted in the spring of 2009, the European version possessed a couple of pretty significant loopholes for participating banks.
C(onn)aught out
Crash, bang, wallop.
That’s the sound of Connaught’s shares on Monday morning:
Shares in the UK support services and social housing specialist were off 75.8 per cent at the open following news that the company could be about to breach its banking covenants.
Let’s talk ‘real’ stress – and real recapitalisation, says BarCap
Not with a bang but a bleat did the results of the European bank stress tests arrive on Friday.
Seven of the 91 European banks tested were found to need just €3.5bn of additional capital, most of which they are already in the process of raising.
Stress test’s sovereign support = senseless
Amongst all the criticisms of the European stress tests, there’s one glaring omission.
From the Committee of European Banking Supervisors’ summary report:
Government support measures received by institutions in the sample as of end 2009 have been taken into account and subject to specific analysis (see Section 4.5 of the report).
Further reading
Elsewhere on Monday,
- Blame games, US financial regulation and economic malaise.
- Austerity and empire, Ferguson and Naked Capitalism.
- Coming soon: The Goldman movie.
- “What did they do once they knew what they knew?”
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: A test cynically calibrated to fix the result
If you tried to test the safety of cars or children’s toys using the same method the European Union applied in its stress tests on banks,
Snap news
Breaking pre-market news on Monday,
- Connaught breaks bank covenants, identifies urgent need for cash – statement.
- Pearson upgrades full-year outlook – statement.
- Tullow Oil makes excellent quality discovery offshore Ghana – statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Indie asset managers gain ground
Banks and insurers are losing share of UK investment assets as independent managers gain ground. Last year for the first time, less than half of UK investment assets were managed by captive companies,
Markets Live transcript – Stress Test Special
Markets Live chat transcript for the chat ending at 16:48 on 23 Jul 2010. Participants in this chat were: Paul Murphy Joseph Cotterill Stacy-Marie Ishmael, FT Izabella Kaminska, FT
PMHello there
Stress Test Special – Markets Live at 4.45BST
If you’re thinking it’s an odd time to be holding a special session of our regular Markets Live chat, well that’s the Committee of European Banking Supervisors for you. It has chosen the close of play in Europe on a Friday as the perfect time to formally release the results of the European bank stress tests.
Rosenberg’s 17 reasons to be bullish (seriously)
Count ‘em! We’d better capture these bullish talking-points from Gluskin Sheff’s David Rosenberg, just in case they disappear…
– Congress extending jobless benefits (yet again).
– Polls showing the GoP can take the House and the Senate in November.
Markets stress out over stress tests (updated)
There was a last-minute outbreak of nerves in Europe over stress-test credibility on Friday, after Meera Louis of Bloomberg revealed that banks will only be stressed for their exposure to sovereign debt on their trading books,
Market gives banks a ‘B’ ahead of the stress tests
In case you were wondering about market expectations ahead of the stress tests.
The below has just landed in our inbox. It’s the results of a Goldman Sachs survey of 376 mostly-European market “participants”
Moody’s tires of Hungary, Hungary tires of austerity
Yet more evidence that Hungarian politicians’ careless talk costs, uh, currency — Moody’s placed Hungary’s Baa1-rated government bonds on downgrade review Friday in response to failed IMF talks.
Moody’s reckons a one-notch cut is most likely,
A CDStress test game
Here’s a fun game for Friday courtesy of Markit.
It’s a list of current CDS levels in the European banks being stress-tested.
Now click to enlarge — and spot the odd ones out:
The FSA is adamant shorts will be outed
Not even death will get in the way of the FSA’s determination to disclose shorts.
The Financial Services Authority — otherwise known as the Britain’s premier zombie financial services regulator — has decided it definitely will be using its remaining powers to ferret out those scurvy short-sellers.
Markets Live transcript 23 Jul 2010
Markets Live chat transcript for the chat ending at 11:23 on 23 Jul 2010. Participants in this chat were: Bryce Elder Miles Johnson, FT BEGood morning BEAnd welcome to another Markets Live
Blackstone’s property ambitions
Blackstone is on a roll. Having just reported strong Q2 results – featuring a 13 per cent annual increase in income and news that it raised $13.5bn in the quarter for its new buy-out fund, the biggest such fund since the financial crisis – it is now eyeing property investments in hitherto unchartered territory.