Squirrel © fintagNews comments:Mervyn King is banging on about Banks preserving capital and using their bonus pools to store up cash for a rainy day (like when the Euro finally collapses – the only thing on my list for Father Christmas).What a dumb idea.As much as bonus bashing is de rigueur, bonuses are good for two reasons:The first is 50% of bonuses are paid out in income tax plus the extra Employers National Insurance at 12% plus. The UK government needs all the tax it can get.Secondly, bonuses paid to bankers are usually spent on something. The economy needs people to buy...
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Corzine © fintagNews comments:EDF MF Man Global or whatever its called these days always lived by the seat of its pants.Actually that is not true. It has been around for 200 years and survived financial disasters and wars. In the last 10 years, the brokerage arm was always thought of as a bit wide and despite a few hiccups and fines was able to spin out of the other MAN entity without huge DD alarm bells ringing. I have known brokers who worked there and some of the stories are hilarious.So along came one of god’s men, a Goldman Sacher. Boy did he mess it up. From what we can tell he...
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50% off Greece © fintagNews comments:So the banks have voluntarily agreed to take a 50% haircut. This means no credit default event and no payoffs. Oh dear.But what does this mean?Now the dust is settling and the EU deal is nothing but more of the same, Greece has got away with wiping off 50% of its debt. Again the Greeks have got something for nothing and the likes of Ireland who have been bailed out and are being good and cutting their costs are looking at those bad boys in Greece and wondering what they did wrong?The EU is keen there was no Greek default. It would be bad for the Euro. So...
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Flag © archbishop-cranmer.News comments:Hurrah! The EU has a solution.Well not really. So they are to increase the Euro-TARP fund, force banks and the ECB to take haircuts on Greek debt and increase Tier 1 capital requirements.Sounds like a plan (similar to last weeks in fact). What is happening in front of our eyes is the “Save France at all costs” plan. With BNP and SocGen heavily exposed to Greece (oops and Italy but that is for next weeks Euro meeting), they will be forced down the rights issue route (unless they can dump their toxic crap onto the ECB) and we don’t want...
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Up up and away © fintagNews comments:There is debt and there is debt.The media love telling us how indebted countries are. But this is all relative. Liabilities are only one side of a balance sheet. Assets are the other.The IMF (and CRAs) have tried to find ways of publishing proper balance sheets of countries but this is very difficult to do. Debt expressed as an amount is pointless. Debt expressed as a percentage is also pointless if there are assets to match (unless you are MF Global of course where nobody including PWC has a clue).CDSs, ratings and bond spreads (to risk free rates) are...
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Greece debt © telegraphNews comments:A nice simple graphic from the telegraph.co.uk.As you can see, France needs to save Greece because it will lose most including its AAA. When France loses its rating, it can no longer be seen as an equal partner with Germany and will flounder in the markets going forward.The 10yr Italian bond spread is the current market obsession, (bloomberg) and Italy does have a lot of debt. But France is the one no-one is looking at. The country has nearly 90% debt / GDP and its probably more. France relies on the CAP to survive and enjoys the rebates the EU gives it....
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Greek tank © fintagNews comments:When the world is in recession, War is the usual way out. So it is not a surprise when we learn of plans to attack Iran. Weapons of Mass Destruction all over again.The great depression of the 1930′s was sorted out when we all went to war. The early 1990′s recession was sorted out when Iraq was attacked for the first time. And so Iran is next especially useful during an election year in the US…Of course France and Germany would like to attack Greece for acting like a spoilt child, but Greece may attack itself. As previously reported, Greece...
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MF Global © fintagNews comments:While Europe fights its way out of a paper bag, MF Global has gone bust in spectacular style.This is a brilliant dissection of the man at the helm from William D. Cohan. Best thing I have read in a long time (bloomberg)From fintag’s perspective we thought you should read this Business Continuity statement from MF Global’s website. Funniest thing we read all year…http://www.mfglobal.co.uk/business-continuity/business-continuityMF Global is committed to ensuring that a current and effective global Business Continuity Management (BCM) program is...
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Paternoster Square © fintagNews comments:All those smug political smiles and hollow rhetoric has gone by the wayside.The Greeks are a historic nation with pride and obstinacy. Having being humiliated by the EU as its debt was slashed by 50%, they know this is not a free lunch and the Greeks will have to pay in other ways so they want a referendum.As we have predicted all year, the Euro will split into two by the end of this year. Greece is the catalyst but it will be Italy that causes the split. The Greek people want control of their own destiny; not to be ruled by the French and the...
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Spain pain © fintagNews comments:Spain. Ireland with better weather.Take this quote from a Bloomberg story:“If there were to be a proper mark to market of real estate assets, every Spanish domestic bank would need additional capital,” Daragh Quinn, Nomura Holdings Inc. in Madrid.Of course this doesn’t include Santander…Today’s shorts:Fintag rant in 2010 – Where did all the toxic assets go? (fintag)Spain pain (washingtonpost)Today’s longs:Gossip:Santander to replace its red hot dog shit logo following protests.Read
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