Good morning, New York...
FT ALPHAVILLE
Argentina: what is the pari passu saga? Wonder no more. Joseph and Cardiff have done a short video explaining it. It's an intro if you haven't been following the saga, and a summary with cool illustrations if you've been tracking it from the start. Click here to view.
The eurozone's poorest. The ECB's first Household Finance and Consumption Survey comes with certain caveats, in part to avoid headlines like this: ECB Data: Cypriots On Average Three-Times Richer Than Germans. But also more broadly because of the miasma of fear and indignation over wealthy citizens, broke governments, wealth taxes, and who's bailing out whom, all these years into the eurozone crisis. Click through to Joseph's post for more.
Goldman advises to short gold. Last week it was SocGen that declared the gold era was over. Now the precious metals team at Goldman is taking a similar view. Excerpts from their latest commodity research note and discussion from Izzy in her post.
Revisiting monetary transmission. Cardiff writes about various facets of Fed policy in advance of Wednesday's release of FOMC minutes, by correcting a diagram arrow by arrow.
NEWS
Europe's top trade official is seeking new powers to compel companies to co-operate with trade investigations in a bid to strengthen Brussels' hand in trade fights with China. The proposed rules seek to address a growing concern in Brussels that European companies are shying away from filing complaints against Chinese competitors because they fear retribution from Beijing – be it in the form of lost market access or unfair regulatory treatment. (Financial Times)
KPMG resigned as auditor to two US companies after accusing Scott London, a former partner, of passing confidential information about them to an alleged insider trader. The world's fourth-largest accountant said it had given up the contract to audit Los Angeles-based Herbalife, the nutritional supplement maker at the centre of a battle between Carl Icahn, the corporate raider, and shortseller Bill Ackman. (Financial Times)
AT&T vs Google. The largest US telecommunications group and the largest internet search and advertising group on Tuesday squared up for a fibre optic broadband battle in Austin, Texas. AT&T and Google both announced plans to build fibre optic broadband networks in Austin capable of delivering 1 gigabit per second download speeds – more than 100 times faster than current average download speeds in the US. (Financial Times)
Google faces having to offer users in Europe more choice of other specialised search engines after Brussels investigators found its results were favouring its in-house services to the detriment of consumers. One of the European Commission's primary concerns, according to officials involved, is the visibility in search results of rival so-called "vertical search" services – in areas such as maps, finance or weather – that may provide more relevant results to a query. (Financial Times)
Southeastern Asset Management said on Tuesday that Dell's board had not made a compelling case for accepting the $13.65-a-share buyout offer made by Michael Dell and Silver Lake Partners. Southeastern owns 8.4 per cent of Dell, making it the largest outside shareholder. (Financial Times)
Austria and Luxembourg are preparing to ease longstanding and controversial bank secrecy rules, allowing other EU member states access to their depositors' account details amid mounting pressure to crack down on tax evasion in Europe. Tax havens have come under increasing scrutiny after millions of bank records were leaked last week exposing the identities of thousands of tax cheats around the world. (Financial Times)
EU policymakers discussed including short-term interbank debts on the list of liabilities that can be bailed-in during a bank rescue. The move is among potential amendments to the EU's bail-in directive following haircuts for uninsured depositors in the Cyprus crisis. Northern eurozone governments also proposed accelerating the bail-in tools' entry into force from 2018 to 2015 (Wall Street Journal). European Parliament lawmakers also plan to enshrine a preference for depositors over senior bondholders in the pecking order of creditors under the new rules, including haircuts for uninsured depositors "as a last resort" (Bloomberg).
Slovenia insisted on Tuesday that it could avoid an international bailout as the Organisation for Economic Co-operation and Development warned Ljubljana to tackle more rapidly a "severe banking crisis" whose costs it might have underestimated. The OECD report came amid investor concerns that the 2m-strong country's banking problems could make it the next eurozone state to require a bailout after last month's mishandled rescue of Cyprus. (Financial Times)
Markets: European stocks have opened higher, supported by a firm showing out of Asia and as Wall Street hovers near record levels. Industrial commodities are mixed, the dollar is softer and Treasury prices are easing but remain near recent highs, leaving yields close to multi-month lows. The FTSE Eurofirst 300 is up 0.6 per cent, with resource and banking groups advancing, after the FTSE Asia Pacific index rose 0.9 per cent. (FT's Global Market Overview)
