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The (early) Lunch Wrap
Good morning New York…
FT ALPHAVILLE
Fitch tallies cost of Basel III: David takes us through the 29 global systemically important financial institutions which, according to Fitch, will need to collectively raise $566bn in common equity to satisfy new Basel III capital rules.
Further reading
Elsewhere on Thursday,
- A skeptical Madison Avenue ahead of Facebook’s IPO.
- Escaping the resource curse.
- The shift from inflation targeting at the BoE.
- Notes from the Ira Sohn conference.
The 6am Cut London
Cameron adds to eurozone warnings. David Cameron will be saying it in a speech today that the single currency unravelling would “carry huge risks for everyone”, reports the FT. Cameron will back Francois
The Closer
ROUND-UP
The S&P 500 dropped for a fourth day, its longest pace of declines for a month, closing down 0.4 per cent at 1,324.80. Bank shares led the way down (Bloomberg).
Some Fed officials remain open to easing but remain unwilling to extend Operation Twist beyond June,
Why China’s RMB exodus IS the story
There is a huge developing story in China’s currency, the renminbi.
After years of structural under-valuation, things are changing.
China faces what we have described before as a “dollar shortage”
Markets Live transcript 16 May 2012
Markets Live chat transcript for the chat ending at 11:02 on 16 May 2012. Participants in this chat were: Paul Murphy neil collins Bryce Elder/FT
PMMorning
PMEarly warning
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
The eurzone is having a really bad Wednesday: Yields are spiking and equities are tumbling: the charts are here.
Do not trust the FRA-OIS spread! Izzy took a look at the FRA-OIS spread and wondered why it is so weirdly stable given that Grexit fears are hitting new extremes.
Further reading
Elsewhere on Wednesday,
- The Whale’s harpooner?
- China’s real estate unravelling.
- Goldman’s legal slip-up.
- Romney gets some advice on how to act human.
- The history of the filibuster,
The 6am Cut London
Asian shares extended losses on Wednesday after Greece failed to form a coalition government, says the FT. The MSCI Asia Pacific index shed 0.7 per cent with Japan’s Nikkei 225 Stock Exchange off 0.5 per cent,
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
Greece will not default today. An official stated that a €430m euro bond maturing on Tuesday will be paid on time (it had a 30-day grace period). The bond wasn’t part of the debt swap in March.
Greece to pay: no default today
From Reuters:
Greece will pay holders of a 430 million euro bond that matures on May 15, a government official said on Tuesday.
“The bond will be paid,” the official, who did not want to be named, told Reuters.
A German GDP beat on a divergent morning [updated]
The German economy grew five times faster than expected in the first quarter of the year, jumping 0.5 per cent. Admittedly expectations were for only 0.1 per cent growth but still, tis cheering news on a wet London morning – particularly considering the 0.2 per cent hit German GDP took in the last quarter of 2011.
Further reading
Elsewhere on Tuesday,
- Is the ‘wall of worry’ really in bonds?
- You know it’s end times when…
- Limit US banks to state borders. Done!
- Jim Rogers is selling his euros.
- European black cygnets are growing.
The 6am Cut London
Asian markets on Tuesday continued to suffer from fears about the eurozone, reports Bloomberg. Spanish and Italian 10-year borrowing costs shot up to their highest levels this year and European stock markets suffered their biggest one-day drop in three weeks.
The Closer
ROUND-UP
The 10-year Bund yield fell to a record low (Wall Street Journal) and the S&P 500 hit its lowest level since February, closing down 1.11 per cent at 1,338.35 (Reuters).
Ina Drew retired as chief of JPMorgan’s Chief Investment Office,
Grexit and the euro: an exercise in guesswork
Everyone who’s anyone (and some other people too) has a view on what will happen to the value of the euro if Greece makes an exit. Probably of dubious predictive use, but here is a selection for your interest (with our emphasis):
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
Wonder ye then at the fiery hunt? Our resident Ahab, Lisa Pollack, continued her Whale watching tour as JP Morgan’s CIO sent JPM’s ratings downwards and executives off the plank.
Further reading
Elsewhere on Monday,
- Ugly history lessons for a Grexit.
- And the price tag thereof: €400bn, give or take.
- The Greeks themselves await a emotional cleansing.
- Spain, meanwhile, may have exit its state of denial,
The 6am Cut London
Three senior JP Morgan staff are expected to leave the company this week over the $2bn trading loss, which is continuing to grow, reports the WSJ, citing people familiar with the situation. The losses grew by $150m on Friday,
FTfm on AV
Some highlights from Monday’s FTfm.
Investors frustrated by banks
Institutional investors are lining up to buy the loan books of European banks but are struggling to put money to work as banks sit
US Markets Live: 10am New York, 3pm London
Hmm… what to talk about…
Join us at the usual place — 10am New York time. (JPMorgan shares were down 9 per cent at pixel time.)
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
JPM reveals a significant loss in its CIO unit. In a conference call on Thursday night, CEO Jamie Dimon put mark-to-market losses at $2bn for the unit. Dimon has thus gone from calling the CIO’s trades a “a complete tempest in a teapot”
An inflated sense of optimism
So, about the inflation-led solution to eurozone imbalances that Germany has apparently signed up for…
From Der Spiegel (with our emphasis):
On Wednesday, Jens Ulbrich, head of the Bundesbank’s economics department,
Further reading
Elsewhere on Friday,
- Breaking up four big banks.
- Others in the spotlight after JPM’s big trading loss.
- If Greece goes…
- A plastic surgery indicator.
- Governments belatedly putting pension benefits on their books.
The 6am Cut London
JP Morgan’s revelation about a $2bn loss on trades by its CIO office made waves in Asian markets, which are headed for the biggest weekly decline since November, says Bloomberg. The bank’s shock disclosure,
The Closer
ROUND-UP
US equities finished in the black for the first time in more than a week, following a marginally positive performance in Asia and Europe. But as the FT reports, “any new-found optimism is being contained by worries about the eurozone’s difficulties and the health of the global economy,
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
The shadow economy is growing: David checks out the latest study from Ceyhun Elgin and Oguz Oztunali of Bogazici University, which finds that a declining trend in the size of the shadow economy experienced a reversion to expansion starting in 2007.
Further reading
Elsewhere on Thursday,
- If Facebook is worth $100bn, then Apple is worth $2.7tn.
- There’s only one way this can end…
- Ferrari is very sorry about your ancient wall, China.
- The Greek CDS solution you’ve all been waiting for.
The 6am Cut London
Spain has taken a 45 per cent stake in Bankia, reports the FT, and the country will force its banks to set aside tens of billions of euros in additional provisions against property loans as part of a fresh restructuring plan for the country’s lenders.
Presenting…. the totally exciting Euromoney FX survey 2012
So here they are! The results of 2012′s Euromoney survey — based on non-gamed voting by, er, clients!
And… drum roll please… it’s… Deutsche at the global top!
That will be its eighth year at number one.