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HSBC's Four Reasons Why Current EM Jitters May Last
While HSBC itself may be having some rather substantial capital outflow issues, that does not prevent its head of EM research, Pablo Goldberg, to list four reasons why the current series of "painful though unrelated flare-ups" in key markets may last. To wit:
1) Reinforcement of preference for DM vs EM
- While EM have cheapened vs DM, value might not be enough as long as the flow continues to favor DM
2) Potential short-term solutions leading to longer-term problems
3) FX depreciation leading to outflows from local markets
4) Due to decentralized nature of these shocks, no silver bullet can restore appetite for risk
Of course, he saved the best for last: "Unlike the market shocks of recent years, QE or IMF bailouts unlikely to come to rescue this time." Which really is all that matters in a time when the Fed has begun tapering and any market not economy data-driven untapering, will merely serve to kill its credibility that much faster.1
Finally, in order to assess EM demand, Goldberg recommends tracking 1Y/1Y swaps, China PMIs and EPFR flows data to see when/if the capital outflow trend will reverse.
Source: Bloomberg
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Oh to be a jittery financial critter.
at least his name isn't emmanuel goldstein. that would be creepy.
You forgot: Preserve the dollar no matter what. This is war pure and simple.
Does it mean that no one in this world will come to save HSBC when they have a bank run........Poor HSBC! ....With no cash, HSBC is indeed poor!
Perhaps a drug cartel or two, will repay HSBC's favours. No? http://www.insightcrime.org/news-briefs/sinaloa-cartel-bought-narco-plane-via-hsbc-bank
IMF has some back up plans....Seems Pablo Goldberg did not read the memo. http://www.forbes.com/sites/billfrezza/2013/10/15/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/
All is well, Pablo, nothing to worry! /s
Maybe Pablo is right, after all...It won't be a bail out...just a bail in!!!
THE DOG ATE MY HOMEWORK!!
"UnLikely"
There is that word again. The foreshadower of the magic act.
HSBC? Goldberg?
The very same cartel money washing criminals who are short on cash HSBC?
That HSBC? Its hard to put into context just how criminal this lot of shysters are. Absolute filth, depravity and outrageous money laundering springs right up.
Pablo Goldberg he's mexican right?
No worries, the US stock market goes up no matter what is happening in the world. Just buy US finacail stocks and eternal growth and wealth will be yours via the electronic printing machine in DC.
Please be my guest and go all-in!
QE can't ride to the rescue because it already rode to the last rescue and is still down there trying to finish it. It is not like QE is sitting on a hill somewhere looking for trouble, QE has found trouble and is butt deep in alligators just trying to preserve the illusion of solvency a bit longer. HSBC is in trouble even with the rescue ongoing.
The next leg down will come when Turkey hikes rates and the currency keeps on dropping. The speculators, have the lira in their sights;
RBS;
"The CBRT has burned through 8% of its total net reserves in one day in an attempt to defend the currency, and the result has been an even weaker lira.
The CBRT is resorting to as many tools of currency defence as possible apart from a conventional straight-forward increase in interest rates. Yesterday's intervention amount exceeded that of end-2011/early 2012, when the central bank successfully reversed the tide of lira weakness after four days of currency intervention.
This time is clearly different, with Turkey caught amidst ongoing political unrest, Fed tapering, and a central bank that sits on half as much in net reserves as it did in end-2011.
The CBRT simply does not have enough firepower to fight the pressure against the lira. We believe the central bank has now exhausted its 'no hike' toolkit and its next major policy action will have to be a straightforward increase in the lending rate.
This is crucial, not just in terms of what it means for market rates and the attractiveness of Turkish assets from a carry perspective, but arguably more importantly at this juncture, for restoring credibility to the central bank. We stick with our call for a February hike in the lending rate but highlight that an earlier interest rate increase at an emergency meeting is now a real possibility. "
Water, water everywhere in the form of Q/E, but fake money is just fake money and can't float a boat.
FUCK YOU HSBC YOU THEIVING CRIMINAL PIGFUCKERS!
That is all.