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The Trading Mesh

TT Top Headlines: Safety of European Bonds an Illusion? EMI Deal, Geithner Urges Asia, Short-selling Groupon

Wed, 23 Nov 2011 01:04:49 GMT           

This week stocks were up and down over the crisis in Europe, particularly Italy. Right before its collapse, MF Global dumped European debt at a loss, which unfortunately didn’t help. In other news, after a high IPO, Groupon is being shorted, naturally, and we find out that Goldman had a good chunk of change in “funded” credit exposure to Italy. Read on for more…

Stock markets gain after Italy austerity vote
November 11, 2011
BBC
Shares in the US and Europe rose, while the cost of borrowing facing Italy retreated, having reached a record earlier in the week. The Italian senate’s vote begins a process that should see Italian Prime Minister Silvio Berlusconi quit.

MF Global Lays Off Vast Majority of Broker-Dealer Employees
November 11, 2011
By Michael J. De La Merced and Ben Protess
DEALBOOK
The court-appointed trustee overseeing the liquidation of MF Globals broker-dealer unit laid off 1,066 employees on Friday, keeping only a skeleton staff to assist in the dissolution of the business.

Europes Banks Found Safety of Bonds a Costly Illusion
November 10, 2011
By Liz Alderman and Susanne Craig
New York Times
PARIS As the bets that European banks made on United States mortgage investments went bust a few years ago, bankers piled into what they saw as a safe refuge: bonds issued by countries in Europes seemingly ironclad monetary union.

Vivendi in $1.9 Billion EMI Deal
November 11, 2011
By Eric Pfanner
DEALBOOK
Vivendi, the French media and telecommunications company, has agreed to acquire the recorded music division of the EMI Group for 1.2 billion pounds, or about $1.9 billion.

Geithner urges Asia-Pacific economies to spur growth
November 10, 2011
BBC
US Treasury Secretary Timothy Geithner has urged Asia-Pacific countries to increase efforts to restore growth to the global economy. He was addressing finance ministers from the 21 countries that are members of the Asia-Pacific Economic Co-operation (Apec) group.

Italian Banks Trapped by Sovereign Crisis
November 11, 2011
By John Glover and Elisa Martinuzzi
Bloomberg
Italys highest bond yields since the birth of the euro are reverberating through the financial system of Europes biggest debt issuer, driving lenders to seek record amounts of central bank financing.

Insurer Allianz Net Drops to $350 Million
November 11, 2011
Associated Press
FRANKFURT, Germany (AP) German insurer Allianz SE saw third quarter profits sag to euro258 million ($350 million) from euro1.27 billion ($1.73 billion) the year before because of investment losses and Greek bond writedowns from Europe’s debt crisis.

Groupon hit by wave of short selling
November 10, 2011
By Telis Demos in New York
Financial Times
Short sellers have targeted Groupon in the days after its initial public offering, as they did social network LinkedIn after its debut earlier this year.

Goldman Sachs Had $2.3 Billion Funded Credit Exposure to Italy on Sept. 30
November 9, 2011
By Christine Harper and Charles Mead
Bloomberg
Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, had $2.32 billion of funded credit exposure to Italys government, financial institutions and companies as of Sept. 30.

MF Dumped European Debt at Loss Before Bankruptcy
November 9, 2011
By Aaron Lucchetti
Wall Street Journal
MF Global Holdings Ltd. sold about $1.5 billion of its European sovereign-debt holdings just before the securities firm filed for bankruptcy Oct. 31, according to a person familiar with the matter.

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