At first glance, we admit this petition to the White House to secure resources and funding, and begin construction of a Death Star by 2016 has got “no brainer” written all over it… Read more
On October 26, the Second Circuit chucked out Argentina’s appeal against having to pay bond holdouts, having had “little difficulty concluding” that the defaulted debt’s dusty, old — but contractually standard — pari passu clause demanded rateable payment. Read more
Muddy Waters’ Carson Block has made some big claims about the companies he and his colleagues have targeted and shorted, the latest of which is Olam. But the extent to which the market has been willing to follow his trades has been falling. More importantly, the willingness of sovereigns to support their listed companies has been rising. The combination of the two suggests shorting Block-style is getting less profitable. Read more
Debates about asset valuation can quickly turn philosophical. The FT’s story on Deutsche Bank on Thursday provides fresh fodder, carrying allegations from three ex-employees that the bank failed to properly value certain credit derivative positions and thereby created a misleading impression of its health.
At first we thought, ‘umm, yeah, Deutsche Bank and others, no?’ But the mention of Berkshire Hathaway seemed an interesting twist. Read more
Obvious dovishness + Draghi’s admittance that the ECB is operationally ready for negative deposit rates = that. Read more
He might also be able to explain why Apple shares continued to struggle at the US open on Thursday. (Market cap below $500bn at pixel time, huge opening volume) Read more
Live markets commentary from FT.com
HSBC money laundering fine could total $1.8bn || Fiscal cliff update || Citi will cut 11,000 jobs and take a $1.1bn writedown || Global cartels fixed display prices for a decade, EU finds || SEC charges Wells Fargo banker, nine others with insider-trading || Standard Chartered sees $330m Iran fine, profit rise erodes || Rolls-Royce reveals SFO corruption probe || Apple shares fell a lot on Wednesday || McAfee arrested in Guatemala || Existing MMF reforms aren’t enough || DoE study backs US gas exports || Markets Read more
We make no apologies, this is good… also, we think there is a lack of musical comment going around at the moment. We’d remedy that ourselves but a quick survey of the London desk confirmed that none of us can sing (h/t these guys)
Deutsche Bank failed to recognise up to $12bn of paper losses during the financial crisis, helping the bank avoid a government bail-out, three former bank employees have alleged in complaints to US regulators.
That’s from a story by the FT’s Tom Braithwaite, Kara Scannell and Michael Mackenzie. Citing those ever-dependable people familiar with the matter, it seems three individual Deutsche staff went separately to the SEC in 2010 and 2011. What’s the collective noun for “whistleblowers.” Read more
Elsewhere on Thursday,
- Bonus envy.
- Tech versus bank stocks.
- The interstate war for businesses. Read more
Deutsche Bank staff say up to $12bn losses hidden || HSBC ‘may pay $1.8bn’ over money laundering || Asian stocks higher on US data || Citi cutting 11,000 jobs || Fiscal cliff talks a little more upbeat || US gas exports green lighted || Freeport acquisitions get lukewarm reception || McAfee arrested in Guatemala Read more
No explanation had been given by S&P at pixel time. [Update: it's pasted below the jump.] But the situation is pretty clear: Greece’s “voluntary” buyback of the PSI bonds is being carried out in distressed conditions (ie it will otherwise lose eurozone financial support). Read more
Greece, apparently. Closely followed by Italy.
Those are the conclusions by Transparency International in their latest corruption perceptions index,which looks at how the public sees state sector corruption. The index, which this year includes 176 countries, focuses on perceptions of graft rather than empirical data because of the secrecy surrounding such goings on. Read more
Consultation paper from the Financial Services authority, fresh off the printing press on Wednesday morning… Read more
Live markets commentary from FT.com
Oh dear, Mongolia’s new dollar bonds “tentatively nicknamed Genghis Bonds” (h/t Katie Martin) have been hit by some shocking, hard to predict, political instability.
From Reuters:
One of the members of Mongolia’s fragile coalition government has ordered its ministers to leave their posts, a move that has sent the country’s bonds into a tailspin and could threaten the passage of crucial legislation.
Republicans in capital gains tax fight || Freeport plans return to energy || Schäuble puts brake on bank union plan || Australian economy loses steam || Tesco signals end of American dream || Paulson blames Europe bet for losses || Markets update || Rogoff’s robots! || The positives in cancelling central banks’ holdings of government debt || Why are Shanghai markets suddenly rising? Read more
Rogoff and Shuttleworth versus Theil and Kasparov at the Oxford Martin School. While the video is from November, we felt the need to review it given Rogoff’s op-ed on Tuesday covering the same subject.
Rogoff’s argument, which in part is intended to counter Robert Gordon’s ‘no robots’ thesis, is that… Read more
We’ve run a couple of posts here on FTAV recently about how cancellation of QE debt isn’t really such a big deal: more an accounting change than anything material because both treasuries and central banks are part of the public sector.
Here is an argument that this mere accounting exercise could be worthwhile — particularly if the debt-laden developed countries descend into another downturn. Read more
China’s markets are zooming upwards, and quite honestly who knows why? It could be something to do with the big politburo meeting yesterday, at which various pronouncements about the economic outlook were made. We’re not sure the remarks should be interpreted as meaning that continued large scale, infrastructure-focused stimulus is a certainty. Read more
Elsewhere on Wednesday,
- Mohamed El-Erian hearts NNT.
- Helicopters or not – doesn’t really matter.
- A happy Krugman is a happy… econblogosphere? Read more
Asia stocks rise, Shanghai Composite surges || UK austerity set to extend into 2018 || Tesco reconsiders difficult US venture || HSBC sells Ping An stake || Schäuble cools on eurozone banking union || Osborne to announce UK pension accounting review || Fiscal cliff talks set off Republican discord || Freeport returns to energy || Greek hospitals running out of gloves, gowns Read more
ROUND-UP
US stocks fell, insert fiscal cliff explanation here. The S&P 500 fell 0.2 per cent to close at 1,407.05. Gold fell below $1,700 a troy ounce (Financial Times). Read more
And so ends a little saga-within-a-saga in the Argentine bond holdout case (but one which shed interesting light on the various sides’ litigating strategies). Read more
Wednesday’s annual charity day at Exotix, the frontier markets brokerage. To that end…
Gabriel Sterne, Exotix analyst, has presented clients with his top ten eurozone crisis quotes of 2012. Of course Sterne gave the answers to who said them, but we thought it might be fun for readers to try and guess. We’ll reveal the answers later. Read more
Lord Dennis Stevenson (former HBOS and Pearson chair ) sent two rather telling letters to the FSA in 2008. Both were mentioned during Tuesday morning’s session with the Parliamentary Commission on Banking Standards and one of which claimed HBOS was “in as secure a position as it could be” roughly half a year before its collapse.
No “lurking horrors in our business or balance sheet” either.
Oh dear. Read more
The Reserve Bank of Australia cut its cash rate on Tuesday to 3 per cent — making a total of 175bps worth of cuts since November 2011, and bringing the rate to its lowest level since the depths of the financial crisis.
The RBA’s governor’s statement alluded to the bank’s discomfort over the stubbornly high Australian dollar, which is not doing what it tended to do in the past and falling to provide a fillip to the economy: Read more
Is this the watershed moment for international audit firms in China?
The SEC’s announcement it was launching administrative proceedings against the Big Four audit firms (plus BDO)’s Chinese affiliates was dramatic, but big audit firms in China have for some time been stuck between a rock and a hard place, because Chinese law prohibits audit work papers being moved out of the country. Read more
Older entries
1Papering over the cracks at Deutsche (allegedly)
2And the most corrupt EU state is...
3Bugger the bankers, the musical
4Paging Isaac Newton
5Stevenson called "delusional" by others in 2012. Called "knowledgeably and well briefed" by himself in 2008. Go figure.
Show more6Why are Shanghai markets suddenly rising?
7Draghi's ready to get negative
8Quote... unquote, euro crisis edition [updated]
9When waning Aussie bond enthusiasm is not enough
10The ghost of the leveraged super senior
Show fewer