ASIAN AND SOUTH AMERICAN EXCHANGES ALSO IN RED
RACE FOR THE T BOND WHICH RETURNS 1,19%
With Wall Street closed, it was the turn of Asian stock markets to be the first to face the negative wave of the landslide of the European stock exchanges. The result has been a series of declines, much less dramatic than in the Old Continent. The Nikkei 225 index is down 1,7% one hour after the close, Hong Kong is down 0,9%. The losses on the South American markets were also heavy: the Brazilian Bovespa lost 2,7%, the Chilean stock exchange lost 3,4%, that of Buenos Aires 3.1% but the Mexican stock exchange lost the most, with a drop of 3,7%.
The most worrisome signals concern trading in US stocks. Futures on the Standard & Poor's 500 mark a drop of 3,7% while yields on the 1,93-year T bond fell to 1,71%. The two-year bond yields 2009% at its lowest level since March XNUMX.
OBAMA PLAYS THE NEW DEAL CARD
BRIDGES AND ROADS FOR 1 MLO SEATS
“We have bridges and roads to build. We can create a million jobs this way." Words from Barack Obama who, with some delay, tries to follow the example of the New Deal, aware that no American president, since the end of the Second World War, has ever been elected in the presence of an unemployment rate higher than 6 percent . Obama thus took advantage of the Labor day anniversary to launch the work plan that he will present to the joint chambers on Thursday: infrastructure and fiscal stimulus to reduce the unemployment rate from the current 9,1% which terrorized the markets (closed yesterday). Obama spoke in Detroit, a not accidental choice given that it is in the Michigan capital that, with the collaboration of GM and Sergio Marchionne, the administration has achieved perhaps the only success on the recovery front. The president spoke at the Democratic convention meeting at the Detroit Metro Labor Council joined by Undersecretary of Labor Linda Solis and AFL-CIO union president Richard Trumka.
WAR REPORT /1. COLLAPSING EUROPEAN BANKS
CREDIT CDS SURGE. SOS FOR THE INTERBANK
“This is bad news which is bound to worsen the sector's prospects. Both for the reputational damage it entails, and for the greater provisions that will have to be made against legal risks". This is how Mediobanca securities yesterday commented on the US government's launch of the complaints already anticipated in recent days against 17 banks guilty of having sent to the Fannie Mae and Freddie Mac agencies false information on the state of health of the subprime mortgages then subscribed by the agencies. Some European credit giants have ended up in the crosshairs of the federal Housing Agency, which yesterday experienced their most difficult day since May 2009. The Royal Bank of Scotland, still controlled by the State after the bailout, left 12 percent on the ground, losses between 6 and 7 percent for Barclays and Credit Suisse, over 8 for Socgen. Deutsche Bank is also in deep red (-7,7%). The CEO Joseph Ackermann speaking yesterday at the Handelsblatt conference said he was serene about the disputes because "the fraud will have to be proven". But the CEO anticipated possible cuts because "it will be difficult to continue with this structure if business continues to fall as rapidly as in August". Regarding the request to recapitalize the banks, made forcefully by Christine Lagarde, Ackermann replied: “It is a solution that involves very modest benefits. The real result is to add more skepticism about the effectiveness of the measures taken to restore the sovereign debt”. A veritable landslide that continued in Zurich with Credit Suisse and in Paris where Socgen left more than 8% on the field closely followed by Bnp Paribas. But the real concern of the markets, at this point, concerns the stability of the interbank market: the risk of a new crisis of confidence in counterparties is looming, which could lead to a liquidity crisis. Yesterday the CDS to insure European bank values rose by an average of 7 percent. Meanwhile, the average credit granted to businesses by the banks of the Old Continent fell to 2,4 percent on an annual basis, another indicator that signals the risk of a recession. But in Europe, like Italy, it's not just the banks that are suffering. Within the Stoxx Europe 600 (-4,1%), the most pronounced decline concerns Clariant: The Swiss chemical company suffered a decline of 16%. But massive losses were suffered by other stocks linked to the economic cycle such as Basf -6,5% and Bayer -4,6%. In August, the growth of European manufacturing firms was the lowest in the last two years.
BWAR COLLECTION/2: BUSINESS PLACE DOWN BY 4,83%
BTPs AT 5,44% HAVE BEEN DOWN FOR ELEVEN SITTINGS
Sitting headlong also for Piazza Affari, caught between fears of the crisis in the eurozone, in a new deadly mix of factors that pushes the Ftse Mib down by 4,83%, the yield on the ten-year Btp to 5,44% , 30 bp above the Spanish bono, the spread with the BTP at 368 points, close to the peaks reached before the intervention of the ECB which last week bought securities for more than 13 billion. The Italian government bond scored another record: eleven consecutive sessions of decline.
1) The day was marked, right from the start, by the defeat yesterday in the German regional elections of Chancellor Angela Merkel in Mecklenburg-Pomerania, which strengthens the party of the Berlin hawks opposed to supporting the bailout of European countries, starting with Greece . The German Constitutional Court will deal with this tomorrow, which could judge the ECB's action on the secondary market as unconstitutional. Meanwhile, the yield on Greek bonds has broken through the 50 percent ceiling. Today the finance ministers of Holland, Germany and Finland are meeting, which persists in asking for specific guarantees from the Treasury of Athens.
2) Then the growing expectations on the ECB meeting on Thursday weigh. While the future governor of the ECB Mario Draghi has meanwhile invited the member countries of the eurozone not to take the government bond purchase program for granted. Fears about US legal action on subprimes then reached some large European banks, pushing the entire sector into sharp declines since the morning.
3) New rumors have circulated in Milan about a downgrading of Italy by Moody's, who let it be known that for now the Italian rating remains under review in view of a possible cut. But a study by SocGen considers "probable" cuts in Italy's rating by the main agencies. Among lenders, Unicredit dropped 7,30% and Intesa Sanpaolo 6,96%, after both were briefly stopped short. Bpm sells 5,48%, Ubi 4,62%, Mps 3,94% and Banco Popolare 3,62%. Relative hold on Mediobanca (-0,40%), which already in August had shown at times more resistance while the rest of the credit collapsed, with purchases in that case by Vincent Bollore' and Diego Della Valle. However, it is the whole main basket that is recording heavy losses. The worst stock on the list is Exor (-7,01%), even losing more than 9% and briefly halted from trading due to excessive volatility. Fiat leaves 6,46%. Fiat Industrial loses 6,74%. Finmeccanica is also doing particularly badly in the industrial sector (-5,90%). Italcementi drops 7,05%, Fonsai drops 7,24%, Impregilo 5,84%, while Saipem drops 6,11%. Among the titles suspended during the session Intesa, Unicredit, Exor, Impregilo and Mediaset itself.
ENI -4,36% AND GAZPROM. SOUTHSTREAM WILL BE DONE
FOR EDISON THE DECISION POSTED TO OCTOBER 30TH
In energy, Eni is heavy with the whole market and loses 4,36%. The first assessments of the damage suffered by the oil infrastructure in Libya confirm the first cautious forecasts of the six-legged dog technicians: production will not be able to return fully operational before the second half of 2012. Meanwhile in Moscow Eni and Gazprom have agreed that the construction of the South Stream gas pipeline project will proceed within the established time frame. This was reported in a note at the end of a meeting between the CEO of the Russian group, Alexey Miller, and that of Eni, Paolo Scaroni. "Furthermore, the participants discussed the issues relating to the entry of the companies Edf and Wintershall Holding into the shareholding structure of the joint venture for the construction of the offshore section of the South Stream project", adds the note. The managers also talked about how to sign SeverEnergy's gas purchase agreement. Enel leaves 4,37%. Snam Rete Gas fares relatively better (-2,23%). Black smoke for Edison's restructuring -2,9% . The only change is the umpteenth postponement of the expiry of the shareholders' agreements between the shareholders, moved from mid-September to October 30th. This is the outcome of the awaited summit between the Minister for Economic Development, Paolo Romani, and EDF's number one, Henri Proglio. "A first cordial conversation with the common intention of achieving a positive result for the parties involved", defined the minister who did not want to comment on the hypothesis of an Italian consortium in an anti-EDF key. "I did not go into the merits of the technicality of the relationships between the companies" - but to have "ensured the presence of the Italian government for the conclusion of the agreements between the Italian partners and EDF. Two hypotheses on the table: the first, the one blocked in March, foresees the dissolution of Transalpina di Energia, the French of Edf taking the majority of Edison's capital, the Italian shareholders in the minority and the unpacking of Edipower among the current shareholders. The other option, which A2A especially likes, also supported by the Italian government, provides for Edipower to remain entirely Italian and therefore with the current shareholders liquidating the Edison stake held by Edf, selling the entire stake in the second largest electricity producer Italian to the French. This hypothesis requires a financial partner but Corrado Passera has denied the existence of a project involving Intesa Sanpaolo Acea seems instead interested in the role of new industrial partner.
JUVE AND LAZIO ARE SAVED IN THE BAG ON THE BALL
POLTRONA FRAU SINKS, THE SUN WAKES UP
A curiosity. Lazio +4,3% and Juventus +1,8% are among the few stocks that close in positive territory. The shares of Il Sole 24 Ore also showed positive results +2%, confirming that the crisis is reawakening interest in economic information. After a free-range start (+22%) , however, Poltrona Frau has sunk to -3,8%.
