The president of Germany’s powerful Bundesbank has firmly rebuffed international demands for decisive intervention in the bond markets by the European Central Bank to combat the eurozone debt crisis,http://ftalphaville.ft.com/thecut/2011/11/14/744541/look-away-from-our-ecb-says-the-bundesbank/
Barclays’ finance director has called for an overhaul of “opaque and complex” accounting rules that artificially boosted the profits of big European and US banks by billions of pounds in the third quarter of this year. http://ftalphaville.ft.com/thecut/2011/11/14/744521/barclays-asks-for-fair-treatment-on-fair-value-accounting/
Japan’s economy expanded strongly between July and September, returning to growth after three consecutive quarters of decline, according to a government preliminary estimate released on Monday, the FT reports. http://ftalphaville.ft.com/thecut/2011/11/14/744461/japan-lives-gdp-growth-seen-at-1-5-per-cent/
Mario Monti was handed the task on Sunday night of forming an emergency government led by technocrats as Italy’s head of state raced to win broad political consensus before financial markets opened on Monday, http://ftalphaville.ft.com/thecut/2011/11/14/744441/monti-takes-over-your-move-other-mario/
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/
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/
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
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/
European leaders reached a deal with Greek debtholders on Thursday morning that would see private investors take a 50 per cent cut in the face value of their bonds, a deep haircut that officials believe will reduce Greek debt levels to 120 per cent of gross domestic product by the end of the decade, http://ftalphaville.ft.com/thecut/2011/10/27/713356/eurozone-agreement-reached/
Europe’s banks will be forced to find about €106bn of extra capital by the end of June, under a mandatory scheme agreed by European Union leaders to temporarily bolster the defences of the banking system. A recapitalisation plan overseen by the European Banking Authority will require around 70 banks to meet a higher 9 per cent threshold of the “highest quality capital”, after revaluing sovereign debt at market rate. http://www.ft.com/intl/cms/s/0/ede0bc94-ffee-11e0-ba79-00144feabdc0.html#axzz1bxFOLwak
South Korea has doubled its currency swap arrangement with China to Rmb360bn ($57bn), further increasing the firepower available to protect its financial system from any turmoil in the eurozone. This latest swap agreement with Beijing, announced during a visit to Seoul by China’s vice premier Li Keqiang, comes only a week after Seoul increased its swap facility with Japan to $70bn from $13bn.http://www.ft.com/intl/cms/s/0/35911e14-ffd4-11e0-89ce-00144feabdc0.html#axzz1bxFOLwak
Latest Monthly letter by IceCap;
In the wee hours of April 15, 1912, the RMS Titanic cruised through the Atlantic ocean on a collision course with history. Naturally everyone knows the story of how the big, old mean iceberg knocked the socks off the mighty ship. The lack of a well thought out strategy was the primary reason for this tragedy – not the iceberg itself.
It’s certainly not lost on us that IceCap’s corporate logo is an iceberg. Besides being a cool logo we do feel the iceberg is a perfect mirror of global investment markets. On the surface, attractive opportunities will always exist and appear achievable for everyone. However the real risks within the market are normally underneath the surface and should they tilt the market in one direction or another, financial markets, just like the iceberg can be turned upside down.
William Dudley, president of the New York Federal Reserve Bank, said the Fed could potentially do more to drive down mortgage rates to support the sector, says Reuters. Mr Dudley said another round of quantitative easing, http://ftalphaville.ft.com/thecut/2011/10/25/710786/another-fed-official-suggests-housing-support/
David Cameron’s attempts to assert his authority over his party backfired on Monday, writes the FT, when more than 80 Conservative backbenchers defied their leader over membership of the European Union http://ftalphaville.ft.com/thecut/2011/10/25/710771/conservative-backbenchers-defy-cameron/
Swiss banks are likely to settle a US probe of offshore tax evasion by paying billions of dollars and handing over names of 5,000 to 10,000 Americans who have secret accounts, Bloomberg reports, citing two people familiar with the matter. http://ftalphaville.ft.com/thecut/2011/10/25/710746/swiss-banks-may-reveal-names-in-us-probe/t
German banks – may be able to mark up their bund holdings to help cushion the effect of a writedown on Greek govt debt as part of a rescue for the country: people briefed on the matter:
European leaders – outlined plans to aid banks and ruled out tapping the ECB’s balance sheet to boost the region’s rescue fund yesterday in their 13th crisis management summit in 21 months.
The complete blueprint will be announced on Oct. 26. includes:
1) a sweeping recapitalization of European banks,
2) a substantial restructuring of Greece’s debts,
3) a bigger bailout fund,
4) and even possibly fresh efforts to entice fresh capital into the region.
Banks have reportedly offered to write down 40 % of their Greek debt while politicians are demanding a haircut of at least 50 %. Still no mention of a Spanish and Italian haircut with the Italian 10 year at 6 % +, Ireland was bailed out at 7 %…..