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’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.
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,
French exposure to Greece, an Argentine deja vu
The Economist, Buenos Aires, 2002:
[Spanish] banks will be the hardest hit. Through the subsidiaries of BBVA and SCH—they own respectively Banco Frances and Banco Rio, Argentina’s second- and third-largest banks—the Spanish banks control a fifth of Argentina’s banking system.
The Ice Age – in pictures
He might have been knocked off his Extel perch by sidekick Dylan Grice, but SocGen’s dancing bear Albert Edwards is still our favourite ‘strategiste global’.
And is he loving the recent batch of weak economic data.
Albert Edwards and an afternoon tea-party with the Vestal Virgins
Breaking news.
Albert Edwards is bullish.
Bullish on US Treasuries that is, which the SocGen strategist expects to hit record levels before before government profligacy and the Fed’s printing presses take the world back to both double-digit inflation and bond yields.
What lies in Greek bank subsidiaries
We all remember the Vienna Initiative, right?
European banks promised to capitalise subsidiaries in emerging Europe in 2009. Governments didn’t collapse from bank runs. It turned out, in general, not bad at keeping some rubbish balance sheets ticking over.
Snap news
Breaking pre-market news on Thursday,
- Lloyds Banking Group reports loss after taking £3.2bn PPI provision; impairment charge £500m higher than expected due to Ireland– statement.
- Société Générale posts lower than expected Q1 results due to own debt market down/Arab spring — statement.
Cash is king
Here’s something you don’t hear very often in the City of London: cash doesn’t get the attention it deserves as an asset class.
But SocGen’s strategist Dylan Grice wants to change that. He reckons there are times when it’s simply the best thing to own.
And the award for extreme optimism in the face of reality goes to
…. someone other than SocGen’s Albert Edwards, who is in fine pessimistic form in his latest strategy note.
This week sees the perma bear take Reuters to task for a recent report on US home sales.
ETFs are proving not so tradeable during crises
FT Alphaville has been keeping tabs on the odd goings-on in Japan-related ETFs recently. And we’ve got another issue to add to our bundle of concerns…
… It’s just how difficult trading in some ETFs has proven to be during the crisis.
Prepare for a major market over-reaction
Albert Edwards is back – back, that is, from his annual search for January sun to counter the effects of Seasonal Affective Disorder (SAD).
And the sojourn looks to have been partly successful. Obviously the Soc Gen strategist remains bearish — he reckons the long-term downtrend in 10-year bond yields is under serious threat.
Waltzing towards the next, inevitable implosion
Much head scratching in the latest note from Albert Edwards.
The SocGen perma bear says he hasn’t got a clue what is going in financial markets at the moment or why investors believe the economic recovery is sustainable.
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.
The mathematics of inventories
While the eurozone plays out its tortuous journey to disintegration, much more concerning developments are occurring. We are convinced that the US economy will slow surprisingly sharply in the months ahead.
The liquidity and momentum trade de rigueur
We’ll skip the stuff on the Ice Age, looming recession, competitive devaluation, protectionism and the 60 per cent off equities forecast (all of which is getting a little bit repetitive) and get straight to the freshest bit of the latest Global Strategy Weekly from SocGen’s Albert Edwards.
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”
Why increased correlation could be bad for IBs
JP Morgan’s most recent note on the future of investment bank wallets is so good, we’ve decided to quote some other interesting findings from it. (It does, after all, run to 176 pages.)
One area that analyst Kian Abouhossein looks at,
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.
The newsflow is failing! The newsflow is failing!
August tends to be quite dull on the market newsflow front. But here’s an arresting news-related chart — from Société Générale’s asset allocation team on Monday:
In short, SocGen’s Global Economic Newsflow Indicator is going a bit off-colour with regard to ‘good’ economic news.
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.
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:
Credit Agricole names its Greek pain
Shares in Credit Agricole were down 4.84 per cent in Paris at pixel time:
For which you can probably blame Emporiki, the French bank’s Greek subsidiary.
Credit Agricole gave a presentation on Tuesday to analysts on the problems — and charges — that face Emporiki amid Grecece’s austerity-hit economic climate.
Anatomy of an emergency unwind
The case of Socgen’s rogue trader Jerome Kerviel heads into its tenth day, with ever more insightful snippets of information being unveiled regarding the bank’s trading practices.
On Tuesday, for example,
Kerviel’s cash positions
Some interesting details are emerging from the trial of Société Générale’s rogue trader Jerome Kerviel in Paris, now in its sixth day.
For one, the defence is trying hard to prove that Kerviel’s direct management was in-the-know about many of his unhedged positions.