Fiat System Breaking Down
Good charts never go out of fashion. Still the best Chart Explaining what’s going on. The Fiat system is breaking down. Although not entirely updated, we are following the Grand Plan. Contagion is spreading, while politicians argue. Courtesy T Long.
News That Matters
Ft.com
Authorities around the world have begun moving against anti-capitalist protesters, with police in the US and Switzerland clearing camps from their cities, reports the FT. In the UK, the City of London Corporation relaunched legal action against protesters camped outside St Paul’s Cathedral. http://ftalphaville.ft.com/thecut/2011/11/16/748721/authorities-move-against-occupy-protests-2/
Negotiators for Greek debt holders have offered to swap their bonds for new ones worth half their current face value, but only if the new bonds contain high interest rates and have extra incentives, including annual payments if Greece’s economy recovers. http://ftalphaville.ft.com/thecut/2011/11/16/748681/greek-debt-holders-in-bond-swap-offer/
(A familiar headline but…) George Osborne is to set out in mid-December detailed plans to shake up Britain’s banking sector, setting in train what is likely to be a detailed consultation with banks over the erection of a firewall between retail and investment operations. http://ftalphaville.ft.com/thecut/2011/11/16/748641/osborne-to-set-out-bank-reform-plans/
German frustration over Britain’s approach to the eurozone crisis erupted on Tuesday after a close ally of Angela Merkel accused the UK of selfishness just days before a meeting between the two countries’ leaders in Berlin, http://ftalphaville.ft.com/thecut/2011/11/16/748601/germany-attacks-uk-over-ftt/
News That Matters
Ft.com
MF Global sold about $1.5bn of its European sovereign bonds at a loss just before filing for bankruptcy, the WSJ says, citing a person familiar with the matter. The extent of the losses on the sales, which totalled more than a fifth of its European exposure, http://ftalphaville.ft.com/thecut/2011/11/10/739621/mf-global-sold-european-debt-at-a-loss-before-bankruptcy/
Greece’s political crisis deepened on Wednesday after a deal to give the premiership to the speaker of parliament fell through at the last moment, reports the FT. Philippos Petsalnikos, speaker of parliament and a former justice minister, http://ftalphaville.ft.com/thecut/2011/11/10/739451/greek-pm-deal-falls-through/
Inflation in China fell sharply in October to 5.5 per cent year-on-year, the lowest in five months, clearing the path for what is expected to be a cautious policy easing to prop up growth, reports the FT.http://ftalphaville.ft.com/thecut/2011/11/09/739181/chinese-inflation-falls-sharply-in-october/
News That Matters
Ft.com
The precedent set by the restructuring of Greek sovereign debt risks leaving banks more exposed to future financial crises of other countries, according to Deutsche Bank chief executive Josef Ackermann,http://ftalphaville.ft.com/thecut/2011/11/09/735701/ackermann-warns-of-greek-precedent/
A US federal judge on Tuesday ordered the convicted hedge fund titan Raj Rajaratnam to pay a $92.8m penalty, the largest ever assessed against a person in an SEC insider trading case, says NYT DealBook. Combined with the fines and forfeitures ordered last month when he was sentenced to 11 years in prison for insider trading, http://ftalphaville.ft.com/thecut/2011/11/09/735581/rajaratnam-ordered-to-pay-92-8m-sec-fine/
Chinese inflation fell sharply in October to 5.5 per cent year-on-year, the lowest in five months, the FT reports, clearing the path for a slight easing in monetary policy to support growth. It was the third straight month of slowing inflation and the biggest drop yet, http://ftalphaville.ft.com/thecut/2011/11/09/735571/chinese-inflation-falls-sharply/
News That Matters
Ft.com
The leaders of Greece’s two largest political parties last night decided to form a government of national unity to start implementing a €130bn bail-out plan, then take the country to elections. George Papandreou, premier, reached the deal with Antonis Samaras, leader of the opposition conservatives, during a 90-minute meeting with Carolos Papoulias, Greece’s president.http://www.ft.com/intl/cms/s/0/7c455fc4-087f-11e1-bc4d-00144feabdc0.html#axzz1czT64R5M
The Group of 20 is seeking to meet again, possibly before Christmas, with the aim of resurrecting a deal to provide an international firewall around Greece, G20 sources have told the Financial Times, saying negotiators at the Cannes summit had been close to an agreement. A source, who was party to the negotiations, told the FT that the three-part package of measures summit host France tried to broker fell apart because the German Bundesbank vetoed one element. http://www.ft.com/intl/cms/s/0/a2e083e0-089b-11e1-9fe8-00144feabdc0.html#axzz1czT64R5M
Three of Greece’s biggest banks have issued €6.4bn ($8.8bn) of government-guaranteed bonds likely to be used as security to obtain financing from central banks, a move that points to worsening market conditions amid talk of a disorderly Greek default. Alpha Bank, EFG and Piraeus on Friday issued the floating-rate notes, which analysts say will probably be used as part of a new €30bn liquidity facility created for cash-strapped Greek banks earlier this year. Under the scheme, Greek banks can issue bonds guaranteed by the government, which can then be used as collateral to receive funding from central banks. http://www.ft.com/intl/cms/s/0/a008a664-0898-11e1-9fe8-00144feabdc0.html#axzz1czT64R5M
News That Matters
Ft.com
Russia has reached agreement with Georgia on terms for entering the WTO, clearing the final hurdle in a deal that could see it join the body by December after 18 years of talks, the FT reports. Maxim Medvedkov, http://ftalphaville.ft.com/thecut/2011/11/03/723731/russia-clears-final-hurdle-to-joining-wto/
It’s “too soon” for China to discuss further bond purchases from Europe’s revamped rescue fund, Vice Finance Minister Zhu Guangyao said on the eve of the G20 summit in Cannes, reports Bloomberg.http://ftalphaville.ft.com/thecut/2011/11/03/723681/chinese-enthusiasm-on-efsf-cools/
Trading in iron ore derivatives almost doubled last month to hit a new record high as a slide in prices triggered a wave of interest in the developing market, says the FT. The volume of iron ore swaps cleared by Singapore’s SGX exchange, http://ftalphaville.ft.com/thecut/2011/11/03/723691/iron-ore-derivatives-trading-hits-record-high/
News That Matters
Ft.com
Australia’s agricultural commodities market resumed trading on Wednesday morning, a day after ASX, the exchange operator, shut it down in the wake of the collapse of MF Global, the FT reports. The exchange had said it took the decision on Tuesday to close the grain and wool markets “until further notice” given the large amount of outstanding contracts held by the US broker,http://ftalphaville.ft.com/thecut/2011/11/02/720671/australia-grain-and-wool-futures-resume-trading/
Regulators should have powers to limit banks’ ability to pay bonuses and dividends if they run into severe financial difficulties, according to the chief executive of HSBC. The FT reports Stuart Gulliver told a panel of parliamentary members that it would be “absolutely reasonable” for the Bank of England’s new financial policy committee to control such payments in extreme circumstances,http://ftalphaville.ft.com/thecut/2011/11/02/720611/hsbc-chief-backs-tighter-regulation/
John Paulson’s investors have signalled confidence in his ability to recover from severe losses in his flagship hedge funds, with the great majority choosing to keep their money with a manager who personally oversees $30bn in investments, http://ftalphaville.ft.com/thecut/2011/11/02/720581/most-investors-sticking-by-paulson/
News That Matters
Ft.com
Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into the brokerage firm, NYT DealBook says, http://ftalphaville.ft.com/thecut/2011/11/01/717731/regulators-investigating-mf-global/
Greece’s prime minister unexpectedly announced a referendum to approve a second EU bail-out deal for his austerity-hit country, less than a week after it was agreed with international creditors at a EU summit, http://ftalphaville.ft.com/thecut/2011/11/01/717581/greece-calls-referendum-on-eu-bail-out-2/
China’s official purchasing managers’ index for October fell to its lowest since February 2009, Bloomberg reports. The PMI fell to 50.4 in October from 51.2 in September, the first fall in three months.http://ftalphaville.ft.com/thecut/2011/11/01/717611/asian-pmis-come-in-low/
Market Update:Greek News intensifies Risk Off Session. Goodbye Europe
Markets taking another aggressive leg down. Greece is implying of pulling the plug. With Interactive Brokers walking away from MF deal, due to balance sheet issues beyond…..let’s see what China says about balance sheet issues before they accept the generous offer of investing in the EFSF.
SPX Channel still intact, but this is definitely trading weakish.
More charts below.
Euro Bail Out for Dummies
Last week Europe Circus was like reading press releases from Pink Sheet Gold Exploration companies.
“We (think we) have found Gold. We are confident we will explore it and dig it to the surface. We have no machines (yet), but we will get them soon. There is quite some Gold, but we are not sure how much yet. It looks like good quality, but we are not sure. The best is that we have a buyer in China, you know, they buy all the Gold in the World. We haven’t asked them about it yet, but we will call them first thing in the morning and offer them Gold, we don’t have, yet”.
And the Euro Bail Out explanation for Dummies.
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