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  • Bank of America under pressure

    Alexander Gloy

    Will Bank of America (BAC) get into difficulties because of a) legal problems to foreclose on delinquent homeowners and b) being forced to repurchase soured mortgage-backed securities? A mortgage is a publicly registered lien on the house. The attached mortgage note is a debt instrument that can be, like a check, endorsed to others. This…

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  • Deutsche Bank increases capital by 50% as Basel III rules announced

    Alexander Gloy

    On Sunday, G-10 Governors and Heads of Supervision (GHOS) reached an agreement on new guidelines for banks, issued by the “Basel Committee on Banking Supervision”, also known as “Basel III”.: Took them 2 years after Lehman to realize the refined rules of “Basel II” were a joke (and almost led to a melt-down of the…

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  • We have no clue about what is going to hit us next

    Alexander Gloy

    Google trends on the Greek crisis: 12 months ago nobody cared. Then, suddenly, it’s on the front page of the Financial Times. Lesson learned: we have no idea which financial bomb is going to blow up in our faces next. Argentina? Venezuela? Hungary? Ukraine? Ireland? Social unrest in Greece? Search term “Greek crisis”. Source: Google…

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  • European Periphery on Fire

    Alexander Gloy

    Greek 10yr yields surge to 11.71% (from 11.35% a week ago) after reports of EUR 4bn deposits having left the Greek banking system in August. Greek 10yr government bond yield. Source: Bloomberg.com In the US it is illegal to call for a bank run, so all I am going to say is that if you…

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  • Pre-Labor Day stock market bounce not convincing

    Alexander Gloy

    Last week’s 6% bounce in the S&P 500 index was not convincing. There was no volume increase associated with the price increase (usually needed to confirm the uptrend). Source: StockCharts.com Many pundits were claiming the market “had” to go up since too many investors were bearish (pessimistic). But as John Hussmann (of Hussmann Funds) pointed…

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  • BoJ emergency meeting

    Alexander Gloy

    The BoJ (Bank of Japan) announced an emergency meeting for 5am GMT Thursday. According to rumors the recent strength in the Japanese Yen and falling share prices will force the BoJ into further “monetary easing” (read: printing money). Gold owners should rejoice – all major Central banks have now boarded the train of self-destruction. To…

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  • Irish crisis averted – for now

    Alexander Gloy

    Huge sigh of relief after Ireland managed to sell EUR 1.5bn fresh debt today (how much of that was bought by the ECB?). Irish CDS tightened 28bps to 275. Still, spreads are elevated, and it would be ludicrous to assume that more debt could cure an indebted nation. The European periphery had generally lower bond…

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  • European periphery on fire

    Alexander Gloy

    The European periphery is on fire. While German 10yr government bond yields declined to 2.33% (-0.06), Irish were unchanged at 5.31% and Greece widened to 10.67% (+0.19). Credit Default Swaps widened on Italy (from 130 to 200 within 2 weeks), Ireland (from 200 to 300) and of course basket-case Greece. Ireland will try to sell some…

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  • Friday 13th – predictions for the next 13 years:

    Alexander Gloy

    It’s Friday 13th, so here’s how things are going to pan out over the next 13 years: Greece is a tragedy. On May 7th they were already priced for a 30% haircut, and the banks prohibited it. So instead of dealing with EUR 210bn in debt (300bn *.7) they will be looking at 450bn in…

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  • ECB intervening in Irish Government Bonds?

    Alexander Gloy

    Stock markets falling word-wide, bond markets surging (prices up, yields down) – except a few outliers, like Ireland. Take a look at the intra-day yield of 10 year Irish government bonds; big rise, then sudden stop. Rumors of ECB having stepped in and buying Irish government bonds. To me, the chart looks like those rumors…

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