We’re heading into the ninth month of the credit crunch, and there still hasn’t been any issuance in the European high yield market. Investment grade companies are also having serious problems getting anything done in Europe, and any brief rally in risky assets is being viewed as a window of opportunity to issue bonds. On Wednesday, for example, we saw £500m of issuance from Citigroup, £500m fr…
Read the articleCorporate financing woes spell more trouble for banks
Hooray for Helicopter Ben
Helicopter Ben yesterday announced that the Fed would lend $200bn of Treasuries to banks in return for AAA rated collateral. Equity markets were delirious – the S&P recorded its biggest one day jump in over five years. Risky credit also staged a rally, but the reaction was a bit more muted. The iTraxx Europe Crossover Index, an index measuring the default risk of the most liquid European high y…
Read the articleHoarding ham and cornering corn
I wrote recently about the impact of banking crises on inflation (read comment here). In short, banking crises are significantly disinflationary at best – and at worse, in the cases of the 1930s Great Depression and the bursting of the Japanese bubble in the 1990s, actually deflationary. There is still a lot of reluctance to accept this evidence though, and the most common objection is the stre… Read the article
“If it ain’t your cods, it’s pollocks”
An interesting set of events was set in motion a fortnight ago, though its roots lay somewhere in late February 2007. A recent trip by an anonymous team member to double Michelin-starred Tom Aiken’s latest venture, Tom’s Place; in essence a posh chippy, bemoaned the lack of cod & suggested that the pollock wasn’t up to much. AA Gill agreed in his unique indomitable fashion the following Sunday …
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