September, 2011
What will Switzerland do with all those euros?
While the scale of Switzerland’s forex intervention on Tuesday caught many people off guard, what’s also caused a bit of bother is seemingly the interpretation of the move.
A key observation, for example,
And we cross to Karlsruhe (updated)
Breaking (via Reuters)….
RTRS-GERMAN CONSTITUTIONAL COURT SAYS REJECTS LAWSUITS AIMED AT BLOCKING GERMAN PARTICIPATION IN EURO ZONE BAILOUTS
RTRS-GERMAN CONSTITUTIONAL COURT SAYS RULING ON BAILOUTS WAS “VERY TIGHT”
Bundesverfassungsgericht risk [updated with decision]
Nomura doesn’t want you just to think about the German constitutional court’s decision on the legality of EFSF bailouts (coming later today. Should appear here).
Nomura wants you to think around it:
Further reading
Elsewhere on Wednesday,
- The secrets of high frequency trading.
- Are regulators realising ETFs are the latest iteration of synthetic CDOs?
- Paul Krugman notes that the gold curve is flattening.
Pink picks
Comment, analysis, and other offerings from Wednesday’s FT,
Martin Wolf: We must listen to what bond markets are telling us
What is to be done? To find an answer, listen to the markets, the FT columnist says.
Snap news
Breaking pre-market news on Wednesday,
- Tony Hayward’s Vallares to buy Genel Energy via $2.1bn reverse takeover — statement.
- Dixons Retail says same store sales in the UK down 10 per cent; down 12 per cent excluding refitted stores — statement.
Further further reading
For the commute home,
- JPMorgan uses Lego to explain the eurozone crisis.
- Mitt Romney has released his jobs “plan”.
- Employment chartfest.
- It’s time to end the IPO quiet period.
- Brazilian states’ GDP matched with countries.
What price the banks’ FHFA lawsuit losses?
The lawsuits filed on Friday by the Federal Housing Finance Agency against 17 global banks involved nearly $200bn of mortgage-backed securities but the regulator refused to put a figure on the total losses it was seeking to recover.
Will Dow Jones please return five minutes of our time
Compare:
BOfA Merrill-Lynch Distributing Sales Docs Among Bidders-Source
Contrast (minutes later):
Bank of Spain’s advisor in the sale, Bank of America Merrill Lynch is distributing sales documents w/ potentially interested bidders.
Regulatory arbitrage with Tony & Nat
Looks like ex-BP boss Tony Hayward is about to get seriously rich.
Reuters:
Tony Hayward, who stepped down as BP boss in the wake of the Gulf of Mexico oil spill, will imminently seal his return to the oil industry,
The Carlyle Group reveals (little about) IPO plans
Seems the Carlyle Group plans to change its organogram from nice and neat…
… to Triangle Jenga:
Click to enlarge both of these cut-out-and-keep guides.
It took long enough for David Rubenstein’s firm to formally declare its intention of joining Blackstone,
Athenian Rhapsody (updated)
Alan Beattie, FT International Economy Editor and FT Alphaville’s new A&R man, has sent us a rock opera by two parodists whom wish to remain anonymous.
We’ve done all we can to confirm one of them isn’t Ben Elton but we can’t give you our full reassurance.
Greek default prediction du jour
It comes from Harvinder Sian of RBS:
Net/net, our base case that the default of Greece will centre around the Dec-11 review is still plausible and our arguments on why it can not come around the Sep-11 review are only tactical.
Swiss real estate will become the new gold
Here’s an interesting view on the consequences of the SNB’s move from Societe Generale’s Sebastien Galy.
First of all, as others have noted too, Galy believes the decision to defend a 1.20 level floor against the euro is credible this time,
SNB euroquake, the analysts react – part two
… continuing the SNB euroquake analyst reaction, RBC’s FX strategy team has an interesting idea: they think the SNB might go as far as buying Spanish and Italian debt, in a bid to find a return for its intervention-related euro cashpile:
SNB euroquake, the analyst reaction – part one
The SNB has come out all guns blazing on Tuesday in a bid to weaken the Swiss franc.
And it’s the use of some key expressions that really stands out. Among them, “acute threat”, “no longer tolerate”
Markets Live transcript 6 Sep 2011
Markets Live chat transcript for the chat ending at 11:39 on 6 Sep 2011. Participants in this chat were: Neil Hume, FT Bryce Elder/FT Izabella Kaminska NHhola NHand welcome to ML
The clairvoyant Jim O’Neill
Full marks to Goldman’s Jim O’Neill who over the weekend called the SNB’s decision to set a direct policy target for the Swissy.
(Emphasis ours):
The Swiss authorities face a huge challenge. If they are serious about trying to prevent the devastating damage that could result from the Franc’s strength,
A Swiss “sigma” event
Or, turning the leveraged into fondue. Hat-tip to Scott Barber of Reuters graphics:
Related link:
European Central Bank response – ECB
Who is the doomiest of all?
Who can resist when bank economists talk of civil disorder?
Not us, obviously. After Albert Edwards’ and Jeremy Grantham’s recent treatises(?) on inequality and social unrest, UBS analysts including global economist Paul Donovan would like to warn us of a specific risk,
The Swiss National Bank is pegging it
“prepared to buy foreign currency in unlimited quantities…”
Your new safe havens are in Japan
And that would be not for currency, but property and equities.
If the low yields of Treasuries and Bunds are becoming too tedious for words, take a look at this in the FT:
Industry officials say US investment funds managed by large groups including Blackstone and Fortress Investment,
Further reading
Elsewhere on Tuesday,
- Waiting for Karlsruhe.
- “…we are at the end-game of a 30 year period of unsustainable wage deterioration.”
- (And how free labour escaped the Long Depression.)
- BofA deathwatch.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Hang on to your purse, Ms Merkel
The general tenor of criticism of the German Chancellor is clear, writes the FT’s foreign affairs commentator.
Snap news
Breaking pre-market news on Tuesday,
- Shares in banking acquisition vehicle NBNK suspended following recent press speculation — statement and report.
- Whitbread reports strong trading with Premier Inn sales up 7.1 per cent in last 11 weeks — statement.
Eurofright
OK, volumes are seriously low and it’s Labor Day in the States. On the other hand…
Banks bore the brunt at pixel time with the Italian banks again suspended for excessive volatility. Anyone remember
Lafite hits the fan
As markets in general turn a deeper shade of claret…
This passed us by: August was also a poor market month for fine wines. Really quite poor given their massive run in the last year. A snapshot of the benchmark indices via Liv-ex,
European banks’ slow run on… themselves
There’s been a lot of focus on US money market withdrawals from European banks adding to the current market stress in Europe. But could this be a bit of a red herring?
Kash Mansori at the Street Light blog has pulled data from the ECB’s data warehouse,
Some extremely special Treasuries
Here’s an interesting datapoint Fred Sommers, of the Basis Point Group, on Monday.
As we’ve written before, Sommers is among a number of back office specialists who have become increasingly concerned about a growing lack of discipline in trade settlements since 2008.