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’Albert the (financial) Populist
Albert Edwards is with Terry Smith on this one. If Shredded Fred must lose his knighthood, then certain other players in this game of bubble and crunch need to forego an honour or two.
But while Smith has focused on Sir Alan Greenspan,
Inflation targeting, back in the frame
We know who’s brought this on. It was Ben Bernanke, last week, with confirmation of the Fed’s 2 per cent inflation target. We suspect it’s one debate that is going to grow in intensity.
First to Bruce Corneil,
SocGen: hedgies short euro against dollar “like never before”
A chart from SocGen’s latest Hedge Fund Watch showing that as of last week, hedge funds were short the Euro against the dollar “like never before”…
Make of it what you will — obviously their positions have fluctuated dramatically in the last couple of years (along with the exchange rate itself).
A meagre yield appetite
Were we wrong to say on Tuesday that the performance of US investment grade bonds this year was only “impressive” because they were just following Treasuries down the yield rabbit hole?
SocGen’s big Q4 preview would seem to suggest as much — or at least it would suggest that although we might have been right until very recently,
On SocGen’s pawnshop defence
Societe Generale has released ‘hard facts’ about its liquidity position on Monday.
Among the points the bank says it has managed to successfully manage a reduction in access to USD funding through a disposal of USD legacy assets,
Le poison de la rumeur
Predictable really.
The investigation into the Societe Generale sell-off looks like it could quickly descend into farce.
Over the weekend Le Monde was forced to defend itself — in a front page comment no less — against accusations that a 12-part fictional series titled,
Doubling a losing bet, really fast
Chart via Societe Generale, and to be read in conjunction with the Troika finally admitting that Greece has failed to control its deficit as it demanded in 2011:
While the size of fiscal adjustment being asked for in Greece (and Ireland actually) is in itself historically unprecedented,
The global economy is critically ill
It’s a SocGen double header on FT Alphaville this Friday morning.
You’ve had the apprentice (Dylan Grice) and now it’s time for the Dark Sith Lord (Albert Edwards).
The global economy is critically ill.
Mean-reverting US government bonds
Here’s an arresting chart from SocGen strategist Dylan Grice.
It shows gross interest payments as a share of US government revenues under two scenarios.
The black line is the most interest and shows what would happen if the US government had to pay a 5.8 per cent yield for its debt – the average of the last 200 years.
Worst banking conspiracy ever
Have you ever heard of Inter-Alpha? We hadn’t until this weekend, although we tend not to frequent the conspiracy sites that lump it in alongside the world’s Bilderbergs, Rothschilds, and the Stonecutters.
SocGen, La Banque Clown
Dominique Pauthe, who led the three-judge panel in Paris deciding on the guilt of Jérôme Kerviel, has made his court a laughing stock by meeting prosecution demands that this country boy from Brittany “repay”
Delta One is the HOT new area for banks
FT Alphaville has written about the rise of Delta One and equity derivative divisions before.
But here’s further proof that banks are now increasingly setting themselves to profit from their Delta-One departments — divisions like the one Jerome Kerviel at SocGen worked for.
Opportunities from the covered bond dislocation
SocGen analysts have turned their attention to the dislocation in covered bond prices vis-a-vis secured lending rates and government bonds.
Just as BarCap noted before them, they observe how “rich” covered bonds are currently trading with respect to the other markets.
More Greek haircut jitters
It’s not just the Greek banks that have been spooked by National Bank of Greece’s cash call and attendant fears of government debt restructuring.
French banks Société Générale and Credit Agricole,
These are the voyages of the starship QE2
This is a Vulcan death grip:
And according to SocGen’s über-bear Albert Edwards, that’s exactly the state in which equity investors find themselves in now.
Or as he puts it (our emphasis):
The current situation reminds me of mid 2007.
Everyone’s an Albert these days
Accept no imitations.
And this one’s got a nice tinge of I-told-you-so about it. The title of the latest missive from SocGen perma-bear Albert Edwards:
They laughed. Oh how they laughed.
Albert — who has been warning about massive global deflation since,
Missing in action — 80% of SocGen trades [updated]
And we were wondering how Jerome Kerviel got away with it… Update: It’s a bit unfair to cite Kerviel on this one, actually — it just concerns misreported transactions in the UK branch, not fraud against the French parent.
Coup de coverage ratio
Banks’ coverage ratios are a favourite topic here on FT Alphaville.
They’re often one of the prime drivers of European and US bank profit — witness those recent second-quarter earnings — and at the same time are dictated by the banks’ own discretion and prudence.
For Edwards, the Japanese lesson still holds…
FT Alphaville Albert Edwards.
Nothing to do here but quote as much of his latest Global Strategy Weekly Posts as we can without the SocGen strategist complaining…
We are at the most dangerous stage in the Ice Age – the ‘post-bubble cycle’.
Did Socgen use ETFs to liquidate Kerviel positions?
Jerome Kerviel stood accused by Société Générale of taking mass positions in DAX, CAC and Eurostoxx futures; positions which the bank later had to liquidate at a well publicised cost of €4.9bn over the end of January 2008.
Summer reading from SocGen’s Dylan Grice
Need some beach reading? SocGen strategist Dylan Grice on Thursday shared five books he’s read recently that he rather enjoyed.
Here are Grice’s picks and brief commentary:
- “The Drunkard’s Walk” by Leonard Mlodinow isn’t just a book about how deceptive randomness can be;
Credit Suisse stress-tests the French banks
A fresh note by Credit Suisse allows us continue our series on the unofficial European bank stress tests being conducted by analysts, ahead of the publication of regulators’ results in mid-July.
Step forward,
What is it with SocGen types and alleged market abuse?
Jean-Pierre Mustier, SocGen’s former head of investment banking and the man who called Jérôme Kerviel a liar, has been fined for insider trading by the French market regulator.
Background: Mustier quit SocGen in August 2009 after France’s Autorité des marchés financiers opened proceedings against him,
Notes from the deflationary quicksand
Deflationary quicksand… We will all end up Japanese… Collapsing houses of cards…
Yes, it’s another missive from SocGen’s perma-bear Albert Edwards, who on Thursday developed some recent riffs on deflation a tad further:
SocGen shares hammered on derivatives concerns (updated)
Shares in Société Générale took a beating on Friday over rumours that derivatives positions in trouble:
SocGen stock had fallen 3.9 per cent at pixel time. Flashes, via Reuters:
RTRS-SOCIETE GENERALE SHARES FALL 3.5 PCT,
Forget ‘bonus rage’, go to (a British) court
While US investment bankers face congressional grillings and “bonus rage”, Britain – somewhat ironically – is looming as a shining centre of bonus redemption for litigious bankers.
Even as the UK attempts to halt a bonus culture that politicians blame for helping to create the credit crisis, imposing a 50 per cent “super tax” on bank bonuses over £25,000,
CDS report: It’s getting worse…
Markit iTraxx SovX WE at 168bp, a record wide
Greece at 875bp (+50), Portugal 450bp (+20), Ireland 285bp (+41), Italy 235bp (+50)
Spain at 290bp (+60) despite successful bond auction
Banks suffering,
Who’s exposed to Greece? (III)
We’re closing in on the specific banks who are most exposed to potential haircuts on Greek debt — notwithstanding reports of an enlarged aid package for Athens.
As Evolution Securities explained in a note on Wednesday (emphasis theirs):