There can’t be many credit default swaps written on freshly nationalised SNS Bank. It isn’t among the publicly reported top 1000 single-entity CDS published by DTCC.
Nonetheless the question of whether the Dutch government’s expropriation of SNS subordinated debt constitutes a credit event, triggering payouts on the derivatives, is being debated on Tuesday by the Isda Determinations Committee, which serves as the ultimately arbiter in such cases.
By which we mean, they are debating it again — they decided the first time around to defer the question to get more information or something.
But why should anyone care about some contract that so few parties have an interest in?
Some possibilities below. Mentally circle any that apply. Read more
Are you a Russian company with deposits in Cypriot banks?
Do you feel safe?
Do you read newspapers? Read more
We’ll be resurrecting Alphachat and folding in the infrequently updated Alphaville podcast into a new format at the end of this week.
Well, “format” is probably too polite, since really it’s just going to be Lisa, Izzy, David and I having a chat about a bunch of stuff. Read more
A familiar saga pops up in the prospectus for Paraguay’s recent US dollar, New York law bond…
Read more
Raise your hand if you didn’t first hear about the way in which the Dutch government took over ailing SNS Reaal on February 1st and think ‘oh, really now?’ along with an arched eyebrow.
The mechanics of the takeover are interesting indeed, but given that two of the four largest Dutch banks have been nationalised, we have a bigger picture question:
How much warning was there that SNS Reaal was on the brink? Read more
Mario Draghi talked, everyone was a little confused, a little wary… so the euro fell. He OMT’ed the FX market. Clever.
But what if talking isn’t enough? As Capital Economics argue, the power of talk is diminished when others are taking action: Read more
Live markets commentary from FT.com
Bail-in proposed for Cyprus || Eurozone finance ministers meet today || Barclays is preparing to cut at least £2bn from its annual cost base of £20bn || Small UK banks complain of risk-weighting disadvantage || US/AMR merger could come this week || Non-EU companies won’t be exempted from data privacy rules || Transit systems in the US north-east are restarting || China has eclipsed the US as the biggest trading nation || The FBI is probing corruption allegations against a subsidiary of EADS || State of the Nation previews || Venezuelan devaluation sparks panic || City job numbers fall 18 per cent || Sweden’s Hakon Invest is acquiring the 60 per cent of shares it doesn’t own in Nordic food retailer ICA AB || Investors dive into euro-yen policy gap || Markets summary || Indonesia is a foreign country… Read more
Elsewhere on Monday,
- Um, Japan… what actually happened?
- Putin the goldbug.
- It’s the NGLs, stupid. Read more
… they do things differently there.
If you thought Nathan ‘the Innocent Abroad‘ Rothschild had been badly treated in Indonesia, spare a thought for shareholders of Intrepid Mining. Read more
Cyprus bail-in proposed || Barclays to cut at least £2bn from costs || Small UK banks face risk-weight disadvantage || Eurofin meeting today || US/AMR merger could be this week || EU to hold strong on data privacy for foreign companies || Snow affects mass transit in US north-east || City job vacancies down 18% in January || China is world’s biggest goods trader || State of the Nation previews || Asian markets mostly closed Read more
This week on FT Alphaville,
- Draghi’s comments and the EUR fall provided a Rorschach test for the markets. Read more
A great resource from Shearman & Sterling, in their note marking the end of the briefing war in the Argentine vs holdouts pari passu saga.
It’s a schematic of the arguments which the Second Circuit will likely consider when deciding appeals against an order for Argentina to pay holdouts alongside restructured bondholders. Some of the arguments are key. Some are not so key. Read more
There’s a lot I disagree with in Ross Eisenbrey’s NYT piece on high-skilled immigration, but I’ll start with this:
The bill’s authors, led by Senator Orrin G. Hatch, Republican of Utah, argue that America would benefit from letting more immigrants trained in science, technology, engineering and math work in the country, with the sponsorship of high-tech companies like Microsoft and I.B.M. … Read more
When good opportunities are scarce, hedgies will seek them in rather unlikely places.
Take Sareb, the Spanish ‘bad bank’ in the process of raising €250m in new equity for the second round of asset transfers from the country’s beleaguered lenders. Read more
Live markets commentary from FT.com
EU leaders near €960bn budget deal || Apple under pressure on $137bn cash pile || Sony’s sells property rather than TVs || China denies targeting Japanese ship || Dell to repatriate $7bn of overseas cash || China trade growth hints at strong 2013 || Bloomberg’s British empire || Investments pay off for KKR || Markets update: Closing out a fairly volatile week in a more positive mood Read more
“Oh, Hollande…” said Mario Draghi as the rest of us wondered if he had or hadn’t entered the supposed currency wars. Or if, in fact, the question was redundant.
The euro’s dive on Thursday was impressive and clearly the result of ECB president Draghi’s comments after the ECB’s rate setting meeting. But whether it was justified or not is very much contested. Read more
Elsewhere on Friday,
- Perverse incentives and productivity.
- The brief fashion that was housing investment.
- Makers versus takers: an update. Read more
A 6 per cent drop in Sony shares stood out as Asian stock markets fell. The Nikkei fell more than 1 per cent. Japan posted a current account deficit for a second month in December, leaving its 2012 annual surplus the lowest on record (Reuters). Sony posted an unexpected quarterly loss and cut its sales forecasts for TVs and games devices (Bloomberg).
Apple and David Einhorn clashed over its cash. The company said it would “thoroughly evaluate” Greenlight Capital’s call for it to issue preferred stock as a way of tapping its $137bn hoard, despite the activist fund’s decision to sue it over a proxy proposal that investors vote before this kind of share can be issued (Financial Times). “Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money,” Einhorn said in a letter to other investors. Greenlight has a 0.12 per cent stake in Apple, having advocated its shares since a fall in them began last year. But Einhorn has worked for months behind the scenes to convince Apple management of the preferred shares scheme, which they rejected for involving too high a dividend (Reuters). Read more
ROUND-UP
FT markets round-up: “Markets struggled for a foothold, with many stock barometers pulling back from recent multi-year peaks, as a batch of earnings reports disappointed and European Central Bank warned about the outlook for the region’s economy. The FTSE All-World equity index, which last week hit a four-and-a-half year closing high of 235.7, fell 0.5 per cent to 232.9 as the FTSE Eurofirst 300 closed 0.3 per cent lower and Wall Street’s S&P 500 lost 4 points to 1,508. The single currency began with gains earlier in the session. But after the ECB left policy unchanged, and Mr Draghi delivered his prepared statement at the start of his press conference, the euro started to slide. The euro last traded 0.9 per cent lower at $1.3397.” (Financial Times) Read more
And why this could well have been the best possible deal for Ireland.
________________________ Read more
Here’s the transaction doc from the Irish ministry of finance. Click through the pic for the full pdf:
Read more
With all the excitement about ‘the great rotation’, it often feels that the debate focuses too much on analysing the recent flows, and less about the greed/fear dynamics driving them.
It’s been well documented that bond holders are increasingly frustrated by the miserable yields on offer in the fixed income markets, and are apparently flocking into the ‘cheap’ equity markets. We’ve already voiced our scepticism about the scale of this flocking. Yet what’s potentially also underestimated is the degree of skittishness by bond holders when the stock markets show signs of a wobble. After all, a lot of capital in fixed income got there after investors were burnt in the early 2000s. This loss aversion shouldn’t be underestimated. Read more
Reuters flashes hitting now (we note):
07-Feb-2013 14:56 IRISH PM SAYS 20 BLN EUROS REDUCTION IN NTMA MARKET BORROWING REQUIREMENT OVER THE NEXT DECADE
07-Feb-2013 14:53 – IRISH PM SAYS IRELAND HAS REACHED CONCLUSION WITH ECB TO PUT IN PLACE MORE SUSTAINABLE PROMISSORY NOTE AGREEMENT
Read more
***DRAGHI “THERE IS NO MORE ELA”***
***WE THINK THAT’S A PROMISSORY NOTES ‘DEAL’***
Read more
Draghi follows Mark Carney onto the stage… Read more
Live markets commentary from FT.com
Rate-fixing scandal rocks three continents || Monte dei Paschi aided by covert loan || UK December industrial output rose in December || Sony hit by quarterly net loss || Credit Suisse raises cost-cutting targets || Dividend hurdle almost derailed Dell deal || Obama orders release of drone details || Murdoch shrugs off Liberty threat to BSkyB || Markets update: Struggling for momentum Read more
It’s Carney live. We know George Osborne is frustrated excited. Mark Carney, the next Governor of the Bank of England and the man Osborne once called “quite simply the best, most experienced and most qualified person in the world to do the job”, is in front of the Treasury select committee.
Here’s the live feed:
Read more
Older entries
1The Netherlands adds 'slow-motion bank wrecks' to list of things it's known for, right after 'clogs' and 'windmills'
2Indonesia is a foreign country...
3Further reading
4Podcast bleg: what do you want us to talk about?
5Choose your own adventure, sovereign debt trial of the century edition
Show more6Weekender
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