November, 2010
More on the European banking binary bet
Many analysts are advising clients to buy battered banking stocks.
But none of them are doing it in quite the style of Arturo de Frias, head of banks research at Evolution Securities, who is taking a very big picture,
Simon Property Group goes shopping [updated]
The commercial property sector has awoken from its stock market slumber.
It has been roused to life by news of a takeover approach for Capital Shopping Centres, which owns some of the UK’s largest shopping malls including Lakeside in Thurrock,
The Spanish (asset) Elimination
A top-read story on Bloomberg this Thursday morning?
One that combines the words ‘foreclosed homes’ with ‘Spain’ and ‘tripled’ :
Nov. 25 (Bloomberg) — The number of foreclosed homes for sale in Spain may triple next year as new accounting rules prompt lenders to dump their depreciating assets,
Dear RepoClear member… It’s been eight days since our last letter
Fresh from LCH.Clearnet on Thursday morning — news that the margin requirement for Irish bonds will once again be raised. A little over a week from its last increase.
From this morning’s letter to the clearing house’s members:
Further reading
Elsewhere on Thursday,
- Devaluations throughout history.
- Forget the dwarves – Wall Street this is how to do it!
- “The endless [Chinese] acquisition of US currency is unsustainable.”
- Irish tax lawyers are smiling.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: The Feds must cast their net widely
The news of Federal Bureau of Investigation raids on US hedge funds in a sweeping investigation into alleged insider trading is welcome,
Snap news
Breaking pre-market news on Thursday,
- Hana acquires 51 per cent of Korea Exchange Bank for $4.1bn — Reuters
- Simon Property asks Capital Shopping Centres to delay Trafford Centre deal; considering cash offer — statement.
Further further reading
For the commute home,
- Ireland: not a Basel III problem.
- Build America Bonds will probably get another year.
- “So the reason that corporate profits are near their all-time highs would appear to be that financial corporations (mainly big financial corporations) and multinationals are making lots of money and paying less of it out in taxes.”
A de facto nationalisation of the Irish banking sector
The banking team at RBS have produced an excellent note on what Ireland’s quoted banks will look like post-recapitalisation.
And it makes for uncomfortable reading.
In order to bring common Tier 1 equity ratios up to 12 per cent on a Basel III basis as proposed by the EU rescue package,
Sovereigns and pensions, oh dear
Marc Ostwald of Monument Securities has a good riff off of the news that Ireland’s national pension fund will indeed be repurposed to buy Irish government bonds:
While many will argue that this is just more ‘unsound finance’,
Deal or no deal?
So that would be no deal, Dr Lynch?
Press release issued by Autonomy late on Wednesday afternoon:
Autonomy has for the past several months been working on a specific acquisition. This work is ongoing.
The LATAM contagion effect
All eyes were on Spanish bond yields AGAIN on Wednesday. Especially as news emerged that the country was freezing, due to market volatility, the start of its €13.5bn issue programme set to sell state-guaranteed power revenue bonds.
Spanish bank: UK banks exposed to Ireland and Korea
If a crisis is a terrible thing to waste, two crises are seemingly an excuse for tenuous interesting juxtapositions.
In a note out today, Santander’s European Equity Research team look at UK bank exposures to Ireland and (obviously) South Korea.
Anglo Irish credit event declared
Fresh from the International Swaps and Derivatives Association:
London, Wednesday, November 24, 2010 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced that its EMEA Credit Derivatives Determinations Committee resolved that a Restructuring Credit Event occurred in respect of Anglo Irish Bank Corporation Limited,
Release the hounds, er, Irish SWF!
Ireland’s prime minister was busy introducing his post-bailout government’s four-year fiscal plan at pixel time.
There is a lot to chew on. For starters, the questionable assumption that 2.5 per cent GNP growth will cushion fiscal cuts right up to 2014.
Risk-weighting the eurozone
Presenting one of the more ironic headaches for sovereign issuers and European banks out there at the moment. At any rate, we’d point to a great story from Joel Clark and Ellen Davis of Risk Magazine.
We’ve noted Europe’s increasingly two-tiered government bond market before.
Here comes the quantitative tightening…
A big hat tip to Sean Corrigan of Diapason Commodities for drawing our attention to the following Bloomberg report on Wednesday:
Nov. 24 `(Bloomberg) — Inflation pressure in China is rising on continous inflows because of increasing yuan appreciation expectations,
A senior slaughtered credit cow
Oof.
From sub-debt to equity and on to senior debt, then. We’re seeing some selling of Tier 1 European bank paper on Wednesday. The below from Suki Mann at SocGen:
And in words, from the Société Générale credit strategist:
Citi’s ideas for playing the eurozone crisis
Some ideas from Citigroup’s interest rate strategist, Mark Schofield.
The thesis here is that Europe’s centrepiece bailout vehicle — the European Financial Stability Facility, or EFSF — has done dismally in terms of containing eurozone contagion,
Markets Live transcript 24 Nov 2010
Markets Live chat transcript for the chat ending at 12:31 on 24 Nov 2010. Participants in this chat were: Neil Hume, FT bryce.elder Tony Tassell NHHola NHMarket fans NHand welcome to Markets Live
In a rush for European funding?
Money, money, money. Hurry, hurry, hurry?
Out on Wednesday — results of the ECB’s three-month refinancing operation. The market had been expecting financials to tap some €26bn of liquidity (slightly above the €25bn expiring on Thursday) — but the spread of expectations was much wider.
Irish fact du jour
Presenting Ireland’s biggest financial institution… Paddy Power!
Related link:
Bonfire of the Irish banks – FT Alphaville
Extensive Irish forbearance, what was it good for?
The European Mortgage Federation’s annual compendium of all things mortgage-related is out.
The data is a bit aged, since it refers to what transpired in 2009 — nevertheless, it still provides an exhaustive survey of the entire European mortgage market in one handy document.
Bonfire of the Irish banks
From sub-debt to equity– shareholders do not like news that Ireland might take a majority stake in the last of its big independent banks, Bank of Ireland.
Double secret US quantitative easing
Ooo, now this is interesting.
Revealed in the latest minutes from the Federal Open Market Committee — a secret Fed video conference to discuss über-quantitative easing. Or, targeting an explicit yield (or ‘ceiling’) on the long-term US Treasury.
Further reading
Elsewhere on Wednesday,
- So … didn’t Irish banks pass the stress tests in July 2010?
- The ultimate shamrock shake.
- A Treasury plan to fix the mortgage mess.
- Insider trading, or not?
- Some facebook derivatives.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Ireland refutes the German perspective
If any good can come out of the Irish disaster it is via the realisation that the classic German perspective on the problems of the eurozone is mistaken.
Snap news
Breaking pre-market news on Wednesday,
- Capital Shopping Centres to buy Trafford Centre for £1.6bn — statement.
- Tianjin Xinmao confirms $1.3bn bid for Draka; offer requires approval in Beijing — Reuters report.