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’The LTRO rally is young, says SocGen
Or, taking the “three-year LTRO = QE” meme and running with it. Two charts via Societe Generale’s cross asset team on Monday:
Related links:
LTRO covers BNP, Credit Ag and SocGen 2012 funding –
Euro banks are not very popular…
Major fallers across the continent (NOT just the banking sector):
UniCredit, of course, has already unveiled a €7.5bn cash call. It would seem that the guessing now is who is next.
A snap observation from Chintan Joshi at Nomura:
Snap news
Breaking pre-market news on Tuesday,
- Olympus admits to covering up losses since 90′s — statement and statement.
- Lloyds Banking Group warns medium-term financial targets may be delayed; however Q3 Net Interest Margin in line with forecasts — statement.
Honey, I shrunk Emerging Europe
Eurozone banks selling assets in Emerging Europe – to tart up their capital ratios under crisis pressure – is not front-page news at the moment.
Frankly, we think it should be!
It’s a huge test case.
The S&P at 400 is almost inevitable
After his brief experiment with technical analysis (well, Killer Waves) uber bear Albert Edwards returns to more familiar ground in his latest Global Strategy Weekly.
Jeremy Grantham of GMO says this is “no market for young men”.
A genuinely stressful stress test
Wouldn’t it be nice if bank stress tests were, well, stressful?
Too often they look like they’re done by him:
When they should be done by her:
Fortunately Arbuthnot’s Mr. Banks, James Ferguson,
Retour au futur, le rumeur de French bank recap
French banks rallying on Monday:
Not hard to see the weekend’s trigger. As Bloomberg describes it:
The Journal du Dimanche reported Ramon Fernandez, head of the French Treasury, met with the heads of BNP Paribas (BNP) SA, Societe Generale (GLE) SA, Credit Agricole SA (ACA),
Albert Edwards and the killer wave
Not sure what to make of this.
Über bear Albert Edwards has abandoned his empirical approach for (shock horror) the mystical world of technical analysis.
Behold the killer wave.
For those of you not familiar with the Coppock indicator here’s a quick primer,
The market for honesty: Gold at $10,000
To those who think inflation is not a problem SocGen’s deep-thinking strategist Dylan Grice has two charts for you:
And what connects the first with the second is the fundamentally dishonest practice of printing money.
Moody’s downgrades SocGen and Credit Agricole; BNP review extended
Moody’s downgraded long-term debt of Société Générale and Crédit Agricole, while keeping BNP Paribas on review; SocGen and Credit Agricole are also remaining on review over long-term funding.
The top lines from each statement follow.
Zut alors! The French bank sell off continues
Some more ‘Hard Facts’ from the French banking sector.
Tuesday’s early price action in SocGen and BNP Paribas.
A little snippet from Gary Jenkins of Evolution Securities:
SocGen’s attempt
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,
SocGen’s ‘hard facts’
Where BNP Paribas goes, Societe Generale follows.
In an extraordinary release, the embattled French bank has given the market some ‘Hard Facts’ to chew over on Monday morning.
Click to enlarge.
GIIPS — how very politically correct.
Snap news
Breaking pre-market news on Monday,
- Societe Generale announces plans to free €4bn of capital by 2013 through disposals — statement.
- Lloyds Banking Group assessing the full implications of the final report from the Independent Commission on Banking — statement.
Un petit funding problème, illustrated
A fortnight is a long time in short-term credit markets.
Reports of US money market funds pulling out of European banks in July abounded last month – and French banks appear to be particularly vulnerable due to their relatively high reliance on short-term funds and lower deposit ratios.
Le grande Apple [updated]
(Graphic via Scott Barber at Reuters)
Yup. Apple is the same size as entire eurozone banking sector – as measured by the free float of the Euro Stoxx banks index.
We’re not sure what, if anything,
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,
La chute, encore
Having rallied up earlier on Thursday — European bank share are promptly de-rallying. And on no news so far as we can tell.
Société Générale:
Unicredit:
Intesa Sanpaolo:
Funding stress in Euroland, continued
SocGen CDS is still sticking out like a sore thumb even if the equity panic is over for now. Up 37bps to 371bps on Thursday — whereas Credit Agricole swaps have fallen according to Markit.
So, Nomura’s European banks equity analyst Jon Peace,
Snap news
Breaking pre-market news on Thursday,
- SocGen sent to open higher after CEO reassures — report.
- Anheuser-Busch InBev report rise in Q2 core profit — statement.
- Q2 results from Zurich Financial beat expectations — statement.
SocGen and the hand of GOFO
For those just tuning in, the story so far…
Having noticed a sharp sell-off in the French banks in European afternoon trading, FT Alphaville compiled a post looking to understand the move. We noted a number of rumours which were circulating.
The Grantham manifesto
Albert Edwards has a soul mate — GMO’s Jeremy Grantham.
Like the SocGen strategist, he too is worried about the massive transfer of income to the very rich that has occurred and has been tolerated only because Central Bankers have created housing booms.
Why is Socgen offering 12-month gold for less than spot? Or is it a typo?
[ATTENTION - It is very possible the data in the Reuters chart could be wrong]
Something is afoot at the French banks.
At pixel time Societe Generale was trading 11.5 per cent lower:
BNP Paribas was off 7.5 per cent:
There are many ways to impair a Greek bond
Many ways to fudge them too.
Compare and contrast…
1) Marking Greek bond impairments to market:
Examples du jour: RBS and Allianz.
RBS has written down £733m of its £1.4bn holdings of Greek bond holdings.
Greek provisioning, SocGen style
Within Société Générale’s generally terrible Q2 results…
Can anyone explain why the bank continued to use market valuations for its Greek bond impairment (€395m before tax), whereas BNP Paribas has been marking to model?
It’s the same basic asset,
SocGen gives up on net income
The half-year reporting season for the UK banking sector may have started well, with results from HSBC, Barclays and Standard Chartered all exceeding expectations, but a different story is emerging on the continent.
Snap news
Breaking pre-market news on Wednesday,
- Societe Generale says it will struggle to reach 2012 profit target because of Greece/economic back drop — statement.
- Northern Rock announces half year loss (underlying) of £78.8m — statement.
Snap news
Breaking pre-market news on Friday,
- News Corporation files Form 8k to the SEC – statement.
- Smiths News expects “significant buyer substitution” to mitigate impact of News of the World closure – statement.