Archive - Feb 12, 2010 - Story

RANsquawk 12th February US Morning Briefing - Stocks, Bonds, FX etc.

Rumor: Nakheel may be going into administration. And an even ghastlier rumor: we are about to see an announcement restrictring all sovereign CDS trading. Time to reevaluate that "Dubai is contained" thesis. Just sayin'... Got Dubai CDS, bitches? Keep them while the government tells you to sell.

• Must read from the master: Lehman justice isn't blind, it's unconscious (Bloomberg)
  

  There’s been much talk the past two years about moral
  hazard, which is the risk that companies and their investors
  will behave more recklessly when they believe the government
  will bail them out. Less has been made of a similar hazard: The
  danger that powerful companies won’t follow the law when their
  executives believe the government won’t hold them to it. The latter risk threatens not only our economy, but our
  democracy. There’s every reason to believe both kinds are
  growing.

• China raises bank reserve requirement to cool economy (Bloomberg, Reuters)
• EU leaders deploy "Bazooka" to repel attack on Greece (Bloomberg)
• Goldman Sachs, Goldman Sachs, clicking in the votes? (Guardian)
• Evans-Pritchard: Will markets call EU bluff on Greek rescue? (Telegraph)
• Blackstone IPOs show barriers to returning fund cash (Bloomberg)
• Rise in retail sales brightens recovery picture (Reuters)
• Totally not out of leftfield post of the day: Steve "Busted IPO" Schwarzman: Lawmakers rush to punish banks threatens recovery (WaPo)

Perspectives on the the sovereign crisis and bond markets from Roubini, Malpass and some other talking heads. The ever optimistic David Malpass sees no fear of a failed bond auction. Roubini on the other hand, and quite logically, compares the European peripheral crisis with what is happening in California and all the other bankrupt US states. To which Malpass changes the subject to gold and jumps on our bandwagon which sees gold, not the dollar, as the ultimate fiat currency alternative. To be fair Malpass does say: "Europe is actually further down the line to a debt crisis than we are, but we are getting there very fast right now... The Federal government will have to decide how much to bail out California. That creates a lot of social tensions." Ironically, Liesman nails it: "Isn't the difference between Greece and the U.S. that the U.S. has a printing press and Greece doesn't. At some point it is no longer any good for Greece to be part of a union where it can't have any control over its monetary policy." The tide is again turning: isn't it time for Roubini to turn just a little bearish?

Compare and contrast the following headlines:

• Guardian: Angela Merkel dashes Greek hopes of rescue bid

and then,

• Bloomberg: Merkel Rallies EU on Greece, Fails to Convince Allies

Really nothing much to say here.

• Asian stocks rose on Friday, lifting the MSCI Asia Pacific Index to its first weekly gain in four.
• China inflation 'blip' masks price pressures from property, credit surge.
• China orders banks to set aside more deposits to cool the fastest-growing major economy.
• Euro declines for third day on concern Greece measures may not be enough.
• Eurozone economy grows by only 0.1 percent in 4Q 2009.
• Germany, others pledged “determined and coordinated action” to help Greece.

RANsquawk 12th February Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 12th February Morning Briefing - Stocks, Bonds, FX etc.