Business

Two weeks ago, The Bank of Portugal shocked markets by bailing in senior Novo Banco bondholders.

Novo Banco was the “good” bank forged from the ashes of Banco Espirito Santo which had to be bailed out by the state in August of 2014. The idea was to sell Novo Banco to pay for the cost of the bailout, but the auction process eventually floundered amid turmoil in Chinese markets (at least two of the potential bidders were Chinese) and uncertainty about whether this “good” bank would in fact need more capital given the elevated level of NPLs already on its books.

Submitted by Mark Jeftovic via Rebooting Capitalism blog,

A friend of mine, a very successful tech CEO who is also profoundly astute in matters of finance, once asked his economics prof during a lecture on interest rates in his university days “could interest rates ever go negative?”.

Yesterday's 10 Year auction was, despite the concurrent pricing of the world's biggest bond deal in the face of AB InBev's $45 billion issue, a blockbuster, with demand off the charts in every possible way. However, today's just concluded sale of $13 billion in 30 Year paper left quite bit to be desired.

In the current turbulent times, in which one after another hedge fund is posting miserable performance numbers, gating or simply shutting down, one stalwart remains: Chicago's appropriately named financial megalith Citadel, which year after year posts tremendous returns purely on the back of its retail orderflow frontrunning HFT platform.

Norway is in trouble. As we have detailed previously (here, here, here, and here), the world's largest sovereign wealth fund has begun liquidating assets (after its largest quarterly loss) as the nation faces recessionary fears (key data deterioration as oil stays lower for longer) with expectations building (despite denials by the central bank) that ZIRP (or even NIRP) is coming. Why? Simple - as the following real-time map shows - every one of Norway's oil fields are currently underwater!