If there is anything that qualifies as protesting too much, surely this is it…
The finance minister of eurozone country X declares (as Vassos Shiarly of Cyprus did on Monday) that its bonds/its banks’ bonds/their depositors simply cannot be written down. Why? Eurozone country X’s constitution and laws just don’t allow it!
Well, on the contrary. Read more
Little or none seems to be the answer…
I wrote on Monday about the ECB’s options for expanding its balance sheet but skimmed over the idea of direct FX intervention on the presumption it just wasn’t going to happen and the ECB would push via less obvious channels. As I was (justifiably) rebuked, the aim here is to make quick amends. Read more
First we had this rather bland statement from the G7 — “domestic objectives” etc — and now this:
12-Feb-2013 13:56 G7 OFFICIAL SAYS G7 IS CONCERNED ABOUT UNILATERAL GUIDANCE ON THE YEN, JAPAN WILL BE IN SPOTLIGHT AT G20 MEETING IN MOSCOW
12-Feb-2013 13:56 – G7 OFFICIAL SAYS G7 STATEMENT WAS MISINTERPRETED, STATEMENT SIGNALED CONCERN ABOUT EXCESS MOVES IN JAPANESE YEN
Dario Perkins at Lombard Street Research has a great little note out on Tuesday arguing why it’s absolutely wrong to assume the current bond sell-off is in any shape or form a repeat of 1994.
As he notes (our emphasis): Read more
As part of its worthy attempt to herd the tax authorities of the world towards some form of global coordination on the taxation of multinational companies, the OECD offers us some examples of tax planning structures currently in use.
Skip to page 73 of this document. Can you guess who might be using an “E-commerce structure using a two-tiered structure and transfer of intangibles under a cost-contribution arrangement“? Read more
A strange thing is happening in commodity markets.
As we already commented on Twitter, what the physical supply and demand situation is telling us is getting increasingly disconnected from what the forward and futures markets are saying.
The curve, in short, is feeling mispriced. Read more
Live markets commentary from FT.com
China’s energy consumption is legendary (okay, its everything consumption is legendary). More coal, oil, hydro, solar, and wind power than… than just about anyone. The coal numbers in particular are mind-boggling. By 2011 China was consuming almost as much coal (3.8bn tonnes) as the rest of the world combined (4.3bn tonnes).
The figures on oil consumption are almost as striking. They consume about 10m barrels a day; more than 10 per cent of world production. Read more
North Korea confirms nuclear test || Vice-chair of Fed urges focus on jobs || US Treasury comment triggers fall in yen || Finmeccanica head arrested over bribery allegations || Pay-by-tweet service launched on Twitter || Companies hit by Venezuela move || UK accounting body probes Autonomy || Nasdaq held buyout talks with Carlyle || Markets update: Bulls struggle to inject fresh impetus into the rally Read more
G7 statement just out on Tuesday: Read more
Sam Walsh, the new Australian boss of Rio Tinto has probably never heard of Tony Pidgley, the chairman of upmarket UK housebuilder Berkeley Homes.
Which is a pity because Pidgley, adopted from Barnardo’s at the age of four by travellers, could give him some tips on how to run a cyclical business and maximise returns to shareholders. (Something, of course, his predecessor conspicuously failed to do). Read more
Elsewhere on Tuesday,
- The brilliance and the horror of rogue spreadsheets.
- Concerning collateral.
- Why fiscal devaluation is a bad idea. Read more
We shouldn’t scoff. Barclays’ newish man Antony Jenkins has rolled out fullish details of the much-previewed strategic review. Click here for more:
North Korean nuclear test suspected after earthquake || Currency wars anticipation heightened ahead of G20 || Yen falls, Nikkei soars || Autonomy accounts to be investigated || Barclays’ big day || EDF wants state backing for UK reactors || Nasdaq and Carlyle held ill-fated talks || Currency wars or just monetary policy? Read more
Another excerpt from Janet Yellen’s speech today:
This possibility [of a skills mismatch between the skills of employees and the skills demanded by employers] and the unprecedented level and persistence of long-term unemployment in this recovery have prompted some to ask whether a significant share of unemployment since the recession is due to structural problems in labor markets and not simply a cyclical shortfall in aggregate demand. Read more
Janet Yellen notes that fiscal policy has been less of a tailwind in the latest recovery relative to the average of four previous US recoveries:
In the year following the end of the recession, discretionary fiscal policy at the federal, state, and local levels boosted growth at roughly the same pace as in past recoveries, as exhibit 3 indicates. But instead of contributing to growth thereafter, discretionary fiscal policy this time has actually acted to restrain the recovery. State and local governments were cutting spending and, in some cases, raising taxes for much of this period to deal with revenue shortfalls. At the federal level, policymakers have reduced purchases of goods and services, allowed stimulus-related spending to decline, and have put in place further policy actions to reduce deficits. … Read more
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…
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
… 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
Older entries
1The Netherlands adds 'slow-motion bank wrecks' to list of things it's known for, right after 'clogs' and 'windmills'
2Go-To Barc (updated with slides)
3This is not 1994
4Cyprus doesn't want a radical rescue, thankyouverymuch
5Podcast bleg: what do you want us to talk about?
Show more6Spot the dodger
7Oh look the CDS market isn't working again
8A promise not to go to war
9A physical vs forward commodity market disconnect
10A different case against the skills mismatch argument: irrelevance
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