China is willing to help, but everyone has limits. Premier Wen Jiabao told visiting German Chancellor Angela Merkel at a state visit in Beijing on Thursday that Beijing plans to continue buying European sovereign debt, the strongest sign of support for its biggest trading partner in months, although it urged further measures to be taken. “The European debt crisis has continued to worsen, giving rise to serious concerns in the…
By CaixaBank research team, in Barcelona | The worsening climate in peripheral Europe has affected the corporate bond markets. Whereas, during the previous months, this market stood out for its remarkable ability to resist the adversities of the euro area crisis (from the point of view of issuances and the extent of capital flows), in May investor mood and the issuance of corporate bonds had been fully infected. In addition,…
By Luis Martí, in Madrid | Amid the recent flurry of proposals for restructuring of the euro zone and opinions on its decomposition, seasoned with all sorts of half truths, two reports –one of the European Commission, by order of Parliament, and one of the Council of Economic Experts which advises the German government– have seriously dealt with the viability of Eurobond-based-solutions. The Commission's report was published late 2011 as a…
By Luis Arroyo, in Madrid | Please, bear with me. First, I took a graph from the Noah Smith’s blog, in which everyone can see that venture capital has almost passed away since the 2000 crisis. The chart shows the value of equity shares, and each line is a selection made under a different approach. The 1990’s were the golden age of risk, people loved risk and the VC funding…
NEW YORK | It’s been a bad day for Spain in Wall Street’s most read media. The tepid bond auction is to blame: Spain sold a total of $3.43 billion in bonds with maturities between 2015 and 2020, near the bottom of its target volume. Spain expected to sell between $3,28 billion and a planned maximum of $4,6 billion. There was a weaker demand and therefore it had to pay…
LONDON | For all the mayhem some peripheral countries of the euro zone are meant to be causing nowadays, a few investor notes circulate throughout the City with eager eyes looking into opportunities in the European Union. For instance, at investing house Fidelity, analysts pondering about equity income say that the euro region’s debt crisis appears to have gone into a period of remission after the combined impact of a…
NEW YORK | US media coverage of Spanish general strike was scarce in the morning, and increased during the day, never making the biggest headline. The online edition of major generalist or business newspaper didn’t include it among their main subjects, or did only briefly. NYT kept it in a low position. WSJ reported on it only on its World section, and the strike wasn’t even the leading headline there….
NEW YORK | Yields on Greek bonds are the highest ever. Spanish and Italians are pretty good also. If they pay back, it could be a very sweet deal for every savvy investor. And private assets are on sale too. In 2010, Apollo Global Management bought a portfolio of distressed property loans owned by Credit Suisse for about $1.2 billion, a roughly 50 percent discount to the face value, according…
By Luis Arroyo, in Madrid | A lengthy series of the risk premium spread (over capital or liquidity) between US Treasuries and BAA corporate bonds tells us several things: 1) that each time there has been recession (gray areas) this premium has picked up markedly; 2) the time it reached the highest point was in the last recession, up to 6%; 3) the 60-year average of this spread is 1.8%; 4) the current figure…
LONDON | The capital stress levels that British banks suffer are regarded to be so dire not even a majority stakeholder like the UK’s government feels confident their credit tap should open. A Taskforce set up by the department of Business Innovation and Skills published Friday a report that recommends small and medium-size companies or SMEs to hunt for alternatives. The paper anticipates growth in demand for finance as the economy recovers…