Biography
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- The Greek government

- One or two French banks

- The Finnish government

- Spanish banks, UK banks, hmm a few banks really

These are just some of the world-class institutions Joseph has managed to annoy with stuff he’s dug up over the years. He joined FT Alphaville way back in March 2010.

Joseph likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

He doesn’t have a finance background.

Moratorium on Moscow?

On May 28, Ukraine will pay $88m in interest on its $2.25bn bond due 2022.

On June 20, it will also pay a $75m coupon on that $3bn bond owed to Russia.

Well, we say ‘will.’

This might get in the way first: Read more

And then there were four, Ukraine bonds edition

Back in April, five leading owners of Ukrainian bonds formed a committee to negotiate a restructuring with their debtor – and avoid losing money on their approximately $10bn principal in the process.

Now count the names in this release on Monday… Read more

The great Bonar caper

Are you an EM fund manager?

Do you live in London or New York?

Were you by any chance offered some of the $1.4bn of Bonar 2024 bonds issued by Argentina on Wednesday, bought by Deutsche Bank and BBVA on Thursday, and settling this Friday? Or maybe you’d like to buy these bonds in the near future.

Then congratulations. You might well also be buying yourself a ticket to the next exciting stage of the pari passu saga.

PS: this may now involve the holdouts personally hunting you down. Read more

A little Ukrainian bond list

There have been a few doubts lately about whether Ukraine was going to include that $3bn Russian bond, issued in 2013 and maturing this year, in its debt renegotiation with private creditors.

Well, over to a resolution by the embattled country’s Cabinet of Ministers… Read more

Is Ukraine’s Russian bond ‘official’ debt or not?

Update: Seems we were right to regard this as curious…

Late on Thursday the IMF walked back on the idea the Russian bond is official debt, per ReutersRead more

Ukraine’s bonds: a little local leverage

The Russia problem aside, Ukraine’s other big task in its $15bn debt restructuring will simply be to convince private bondholders that it’s a deal worth taking.

One way to do that is for bondholders to realise they are dealing with a government burdened with the costs of war and as it happens, increasingly absorbed in an intense lustration campaign.

But some of them (quite possibly one that lives in San Mateo, CA) could have holdings large enough to block a bondholder vote. So, even if Natalie Jaresko, the Ukrainian finance minister, does like to quote Margaret Thatcher about there being no alternative… the new bond terms will need to justify taking a massive haircut compared to holding out for full payment.

Another way to do it? Note how ripe for abuse the old bond terms are.

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When Lee Buchheit, Ignacio Tirado and Mitu Gulati were looking deep within the innards of Cypriot government bonds just over two years ago — shortly before the climax of the island’s debt crisis — they found something exciting. Read more

Tomato ketchup, mac n’ cheese, kool-aid, private equity existential doubt and anomie

Well, shouldn’t buyout firms be a little perturbed by things like this?

PITTSBURGH and NORTHFIELD, Ill., March 25, 2015 /PRNewswire/ — H.J. Heinz Company and Kraft Foods Group, Inc. (NASDAQ: KRFT) today announced that they have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America with an unparalleled portfolio of iconic brands… Read more

Stopping a Russian bond invasion

All it took was 11 days — and one schtum Kremlin spokesman — to make people wonder recently just how strong and secure a ruler Vladimir Putin really is.

They might want to look inside his Ukrainian bonds next. Read more

An Argentine bond reprieve — or is it?

Could there finally be a limit to just how far around the world the pari passu saga goes?

No.

But for a longer answer, read on. Read more

A British OFAC?

This won’t be getting any UK Budget financial headlines. (Between Help to Buysa, more bank levy twiddling, and even Northern Rock’s £13bn Granite securitisation going on sale.)

On the other hand, it’s been quite a year for financial sanctions — those against Russia having been some of the most complicated ever. Read more

Bonar turns into subpoena

That’s the gist of the latest from Judge Thomas P. Griesa…

On Wednesday the District Court judge ordered Deutsche and JPMorgan to turf over documents on the “flow of funds” relating to an unofficial, $2bn sale they were arranging of US dollar-denominated — although not US-law — bonds (Bonars) issued by Argentina. Read more

Mark 3:25 (or, the UK’s housing divide)

A few charts from the latest English Housing Survey, out on Wednesday…

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I find your lack of payment culture disturbing

We think this means the ECB doesn’t want Greece to end up defaulting.

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The first rule of secret Argentine debt talks club is, you talk about secret Argentine debt talks club

Compare (a press release from Daniel Pollack, a court-appointed negotiator, on an Elliott offer to talk to Argentina in the pari passu mess):

The invitation by the Bondholders was without pre-conditions and offered the possibility to the Government of Argentina of a settlement without any present payment of cash, details to be negotiated. That invitation was transmitted by me to Counsel for the Government of Argentina, Cleary Gottlieb, on January 30, with follow-up calls by me over the next two weeks. The Government of Argentina has neither accepted nor otherwise responded to the invitation by the Bondholders. Read more

Debt, Kant, and cant

One may think that this retreat from game theory is motivated by some radical-left agenda. Not so. The major influence here is Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right.

– Yanis Varoufakis, ‘No Time for Games in Europe’, NY Times Read more

Pari passu: the English patience

Q. You are a foreign judge being pulled into one of the longest, biggest, stupidest sovereign debt cases in history, one which is presently in limbo in a US court. The debtor has become distracted by a political nervous breakdown at home and may have taken leave of reality altogether. The creditors can’t stand each other, and no one has been getting any money for months, because of the effects of a single bond clause drafted over two decades ago. How do you proceed?

A. Politely.

Click below for the attempt of Mr Justice David Richards of the High Court of England and Wales: Read more

Rebranding Troikas, then and now

While we patiently wait for Wednesday’s late-night Eurogroup meeting to decide nothing about Greece…

Surveillance – the ECB’s role in the Troika has recently been questioned by the ECJ, and so some “rebranding” of the monitoring has looked likely. But the basic structure of program targets and reviews will remain in place. Read more

TPG still really wants its Blackberry back

Because it’s not every day you see a $65bn private equity firm — a notoriously shy bunch — put its employee confidentiality agreement on show before a Texas courthouse…

Click for TPG’s latest injunction in a very awkward lawsuit against its “whistleblower”/former spokesman, Adam Levine: Read more

Greece and the ECB: the first cut

On the day Yanis Varoufakis declared “I’m the finance minister of a bankrupt country”: Read more

This is nuts. Who wants some eBonds?

Over in Mac McQuown’s Sonoma Valley workshop, courtesy of Bloomberg Markets

McQuown says his eBond will enable investors to jettison their credit risk because the swap, which is essentially a form of insurance, will cover their losses should the debtor fail. To garner such protection now, an investor must purchase a swap separately to cover a bond. Read more

The many faces of Jeroen Dijsselbloem

It’s Friday. You probably can’t wait for the weekend after a tough week.

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Missing: one Blackberry. Please return to TPG

You’ve read about TPG, the $65bn buyout firm, suing its former spokesman to get back his company Blackberry after he allegedly threatened to “take down” the firm with press leaks…

…Now read the lawsuit: Read more

Russian rate hikes, then and now

Click to enlarge — from an old St Louis Fed paper

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The kitchen sinksky*

**10.5 per cent to 17 per cent**

Click to enlarge for the Central Bank of Russia’s emergency rate hike at 1am Moscow time — surpassing both the Turkish central bank’s hike in January this year and the Bank of England’s 500bps of moves on one day in 1992. Lamontsky.* Read more

The Sony Effect

Click to enlarge — in which Sony gets one of the top lawyers in the US to ask the media to destroy information from the company’s massive hacking. (Via the Hollywood Reporter)

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Transparency for me (MPC), but not for thee (FPC)

Did you know there’s something called the Eijffinger-Geraats central bank transparency index?

There is one. It’s in the Warsh Review. On Thursday, the Bank of England accepted the review’s recommendations in favour of more open central banking. So, it decided to release minutes of meetings alongside policy decisions as they come out, to release transcripts of those meetings eight years later — and to hold fewer meetings a year from 2016 (8 versus 12). Read more

A trip to the Tripoli casino

Q. How do you tell the $65bn sovereign wealth fund of a notoriously erratic government that it might lose all its money on trades you arranged for them?

A. Very carefully.

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From Russia with bonds

Ukraine will probably end this year with public debts over two-thirds the size of its economy. We won’t know the exact figure until March when official statistics come out, nor if those statistics will be able to count the GDP of the separatist east.

But it is not looking good. We thought this rated a reminder.

Because the President of Russia certainly hasn’t forgotten about it — or the unusual clause inserted into the language of a $3bn bond Ukraine owes to his government: Read more

The Irish letters

Here is an unimpressed Jean-Claude Trichet.

And here is the ECB’s full response to the revelation of the Trichet letter…

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Someone’s in rouble now

С начала года ЦБ для поддержания курса рубля потратил $68 млрд. Полторы Олимпиады улетело в пустоту.

— Alexey Navalny (@navalny) October 30, 2014 Read more