Update: GREECE GOVT DENIES PLAN TO DELAY APRIL 9 IMF PAYMENT: REUTERS
For now the algos can't decide if Greece is joking about making the payment or joking about not making the payment.
While we wait to see which “well capitalized” bank will be the next to crumble under the weight of mountainous writedowns occasioned by the sudden souring of “riskless” assets, we get to read the DuesselHyp post-mortem, which shows that the bank was effectively AIG’d by Eurex.
With the rest of the developed world's central banks waiting for the Fed to admit defeat for one more year and delay its proposed rate hike (or launch NIRP/QE4 outright) it was all about China (the same China which a month ago we said would launch QE sooner or later) and hope that its central bank would boost asset prices, when over the weekend the PBoC governor hinted that more easing is imminent to offset the accelerating drag after he admitted that the nation’s growth rate has tumbled "a bit" too much and that policy makers have scope to respond. How much scope it really has now that its bad debt is rising exponentially is a different question. It got so bad, Shanghai Securities News leaked a false rumor earlier forcing many to believe China would announce an unexpected rate cut as soon as today, in the process sending the Shanghai Composite soaring by 2.6%.
A look ahead at the major drivers in the days ahead.
"A relatively low-profile entity in Austria – Pfandbriefbank Oesterreich AG (Pfandbriefbank) – is becoming the next critical chapter in the Austrian banking system story." - Daiwa
CCC-rated Ukraine is preparing to issue more debt, debt with a Aa+/AAA rating because it will come with the explicit guarantee of the United States of America. In other words, after raiding Greek pensions with the IMF's blessing, the Kiev puppet government is now going after the "full faith and credit" of the US... backed by its taxpayers. In yet other words, the latest Ukraine "bailout" is courtesy of you, dear US taxpaying reader.
Borrowing in USD was risk-on; buying USD is risk-off. As the real global economy slips into recession, risk-on trades in USD-denominated debt are blowing up and those seeking risk-off liquidity and safe yields are scrambling for USD-denominated assets. Add all this up and we have to conclude that, in terms of demand for USD--you ain't seen nuthin' yet.
The Austrian Black Swan Claims Its First Foreign Casualty: German Duesselhyp Collapses, To Be Bailed OutSubmitted by Tyler Durden on 03/16/2015 05:13 -0500
Moments ago we got confirmation that the next domino from the appearance of the Austrian black swan has tipped over, following a Reuters report that Germany's deposit protection fund will take over the property lender Duesseldorfer Hypothekenbank AG (DuesselHyp), which has "run into problems" due to its exposure to Austrian lender Hypo Alpe Adria's "bad bank" Heta.
When we parsed the newly released 2009 Fed transcripts yesterday we were too busy looking to uncover things like a previously unreported plan to create a bad bank to look for signs of central planner levity, but fortunately, the research department at Bloomberg was looking for the important stuff. Thanks to their efforts we have the official Fed Chuckle Count for 2009.
- China Lowers Growth Target to About 7% (WSJ)
- Obesity Is Hurting the U.S. Economy in Surprising Ways (BBG)
- Embattled Hillary Clinton urges State Department to release emails (Reuters)
- Washington Strips New York Fed’s Power (WSJ)
- U.S. Supreme Court split over Obamacare challenge (Reuters)
- Citigroup Loses $800 Million as It Exits Turkey’s Akbank (BBG)
- Justice Who Once Tried to Kill Obamacare Now Potential Savior (BBG)
- Buyers of Espírito Santo Debt Face Financial Uncertainty (WSJ)
The deterioration in the subprime auto market is perhaps the clearest sign yet that we have learned literally nothing from the crisis years. That is, this is precisely the same dynamic and it will end precisely the same way: defaults will rise, investors in assets backed by these loans will suffer outsized losses, and the assets themselves will become completely illiquid.
Cashing out of the “Bet on America” might get messy.
If "everything is awesome" in Greece (and Europe) then why - oh why - did Greek government bond yields surge higher today, Greek stocks tumble, Greek bank stocks (and less so bonds) collapse, and Greek CDS jump? It appears that as the euphoria relief wears off, as WSJ reports, doubts over the willingness of Greece’s left-wing government to follow its creditors’ orders on budget cuts and economic overhauls spilled into the public today. IMF's Lagarde stated that the Greek proposal "is not conveying clear enough assurances that the government intends to undertake the reforms," and even Syriza officials admitted, "it is difficult to determine how the government can fulfill its promises, including the debt write-off, with this agreement,” as doubts arise across Europe's policymakers and markets.
- Greece will do 'whatever it can' to reach deal with EU (Reuters)
- ECB Urges Greek Political Deal as Emergency Cash Is Tight (BBG)
- Fighting rages in run-up to Ukraine ceasefire (Reuters)
- Eurozone GDP Picks Up, Thanks to Germany (WSJ)
- Two J. P. Morgan Executives Connected to Asia Hiring Probe Pushed Out (WSJ)
- Putin's High Tolerance for Pain and Europe's Reluctance to Inflict It (BBG)
- Indigestion Hits Top U.S. Food Firms (WSJ)
- Alibaba's Jack Ma seeks to reassure employees over U.S. lawsuits (Reuters)
- Greek Risk Draws Global Concern on Lehman Echo Warnings (BBG)
- Merkel to urge caution in U.S. as pressure builds to arm Ukraine forces (Reuters)
- West Races to Defuse Ukraine Crisis (WSJ)
- German-French Push Yields Ukraine Summit Plan With Putin (BBG)
- Swiss Leaks lifts the veil on a secretive banking system (ICIJ)
- Italy Lenders Seen Cleansing Books Amid Bad-Bank Plans (BBG)
- G-20 Finance Chiefs Face Tough Test in Istanbul (WSJ)
- Demand for OPEC Crude Will Rise This Year, Says Group (WSJ)... or rather prays
- U.S. Banks Say Soaring Dollar Puts Them at Disadvantage (WSJ)