June, 2011
Sino-Forest: more questions, fewer trees?
Now, about them trees.
Canada’s paper of record, the Globe and Mail, on Saturday published the results of a two-week investigation into Sino-Forest’s assets.
On Monday morning Sino-Forest responded (details below),
Equity shorts in disguise
Synthetic prime – a.k.a — the art of transforming client exposures.
But, we wonder, could there be more to it than meets the eye?
Let’s start with what ‘synthetic prime brokerage’, shorting, internalisation,
Shouting Greek rollover, whispering Brady bonds
In which FT Alphaville once again asks, what kind of fiscal transfer does Europe really want for Greece?
Since some way or other, a transfer it will have to be.
Monday’s answer from the Eurogroup sidestepped the issue,
China is finally buying fewer US Treasuries, StanChart says
After numerous false starts, China appears to be buying fewer US assets.
At least, according to the analysts over at Standard Chartered.
Here’s why:
Today we present evidence which suggests that China is buying fewer US dollar (USD) assets with its new FX reserves.
Markets Live transcript 20 Jun 2011
Markets Live chat transcript for the chat ending at 11:36 on 20 Jun 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola NHyou ‘orrible markets rabble
An obituary for the common currency
As we await the Greek confidence and austerity votes, Der Spiegel delivers its verdict on the euro.
RIP.
The return of the sovereign-bank loop?
Exactly where you wouldn’t want it, too. Spain.
FT Alphaville readers will remember that a whole bailout-load of eurozone debt worries kicked off once banks started buying up their respective government bonds post-financial crisis.
Supergroup droops again
Oh dear.
Supergroup’s big investor and analyst day in Cheltenham has not got off to the best start.
Shares in the owner of the SuperDry clothing label have fallen sharply as the market has overlooked news of a recent improvement in recent sales and decided to focus on the slow progress of the retailer’s ambitious store opening programme.
Hedge funds vs Bank of Ireland
More hedge funds than pensioners in the lawsuit filed against Bank of Ireland over the weekend:
Related link:
EU warns Ireland over banking plan - FT
Eurogroup to Greece – your move
Monday’s (very early) statement from the Eurogroup.
Quick summary. We’ve done our bit (or will have by early July), now it’s your turn.
(emphasis ours)
Statement by the Eurogroup
The Greek authorities are embarking on a significant and necessary adjustment effort.
Further reading
Elsewhere on Monday,
- Greece, still in crisis.
- And waiting for a default.
- The BoJ’s very own 1 per cent rule?
- Global pursuits of the American dream.
- “Corporate bonds disguised as municipal bonds.”
Pink picks
Comment, analysis, and other offerings from Monday’s FT,
Clive Cook: America flirts with a fate like Japan’s
The stalling of the US recovery raises big, scary questions, the FT columnist says. After a recession,
Snap news
Breaking pre-market news on Monday,
- Euronext market opening delayed — report.
- Rexam to sell closures business to Berry Plastics for $360m – statement.
- SuperGroup says trading in the past three weeks has improved — statement.
FTfm on AV
Some highlights from Monday’s FTfm.
Big firms suffer large asset falls
Many major investment houses suffer precipitous loss of AUM as the trend to move away from active investment strategies to more
The Weekender
This week on FT Alphaville,
- We launched a podcast! Please subscribe.
- A striking parallel between Greece and Argentina.
- Ranking Greek bond exposure.
- We looked at why political risk forecasting is so inherently difficult.
Further further reading
For the commute home,
- DSK said he had diplomatic immunity, then thought better of it.
- The Guardian has uploaded UBS data and made a spreadsheet showing Greek exposure.
- Introducing Tim “Rodney”
The humble Greek (and Argentine) depositor
It’s been a day of Argentine parallels to Greece, but this one is especially striking.
Alex Bellefleur of Brockhouse Cooper points out the following charts — one for deposit drains in Argentina back then and Greece now:
Not forests, chickens this time
Uh oh. The market seems to have caught another case of Sino-situs on Friday.
Introducing Yuhe International:
…a supplier of day-old chickens raised for meat production, or broilers in China. Our day-old broilers are sold,
Somewhere in the Argentine (CDS) Andean foothills…
Greece one-year credit spreads in June 2011, meet Argentine one-year credit spreads in July 2001 (chart from an old IMF paper):
You have a lot in common — around 2,500bps actually:
That’s a chart of Greece’s CDS curve at Thursday’s close,
A herd of tail risks [updated]
In which around 800 global investors polled by the Economist Intelligence Unit and BNY Mellon believe that deflation is as likely as a recovery in US housing — plus, other tail risk reflections in this chart here (click to enlarge):
US Markets Live transcript 17 Jun 2011
Markets Live chat transcript for the chat ending at 15:14 on 17 Jun 2011. Participants in this chat were: John McDermott Cardiff Garcia Joseph Cotterill, FT Izabella Kaminska JMTop of the morning
Reminder: US Markets Live starts in 15 minutes
You know the drill. We’ll be kicking off at 10am New York, 3pm London.
On the menu this Friday are Greece, the IMF’s latest economic outlook, US macro, RIM, Pandora, the SEC’s crackdown on the credit ratings agencies,
Who’s selling Greek CDS, again
Because people still keep talking about this…
There appears to have been a massive amount of misunderstanding about recently published BIS statistics regarding US banks’ Greek exposures. The idea that US banks are on the hook for $32.7bn of CDS written on Greece was first expounded by the Street Light blog,
Under-reported – and non-performing – assets at US banks
A sudden regulatory and accounting push on banks’ “extend and pretend” practices means we’re about to get a peek at one form of renegotiated loans come the third-quarter — so-called Troubled Debt Restructurings.
More on Europe’s Lehman moment
It’s an analogy already made by many commentators on Thursday.
And picked up with some aplomb on Friday by BNP Paribas’ Mehernosh Engineer:
A confluence of events has increased volatility which could turn systemic in nature.
Markets Live transcript 17 Jun 2011
Markets Live chat transcript for the chat ending at 11:28 on 17 Jun 2011. Participants in this chat were: Neil Hume, FT bryce.elder
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A claimant count quandry
There is a bit of a debate developing regarding Wednesday’s employment data and in particular the significant increase in the claimant count.
For example, FT Alphaville quoted Howard Archer of IHS Global Insight saying:
Top of the Greek bond exposure pops [updated]
Emphasis on the popping. Worth listening to this as you scroll down the below table, compiled by a clearly nostalgic Laurent Fransolet of Barclays Capital…
None of the exposure is surprising,