Investors will be watching Spain’s 2013 budget plan, to be announced today, for indications that the government is laying the ground for a bailout request. If it makes investors happy, it’s likely to make Spaniards mad, as demonstrations turned violent yesterday outside the Spanish parliament building in Madrid. In either case, Prime Minister Read More
In the earlier years of the European debt crisis, Spain pushed for Ireland and Portugal to accept international bailouts, lest the confidence in those countries’ ability to repay borrowers spread to neighboring countries (i.e. Spain). Now foreign leaders are urging the Madrid-based government to ask for help from the European Central Bank, and Spanish prime minister Mariano Rajoy is resisting.
Credit Agricole’s 2006 purchase of Emporiki Bank of Greece may cost the French lender another $779 million, according to the Wall Street Journal. Credit Agricole has already written off billions on Emporiki, which has been roiled by the Greek economic crisis; the French bank is in the process of selling Emporiki, for an expected price of 1 euro.
Morgan Stanley likes to tout the steady revenue provided by its wealth management franchise. At the same time, the bank is arguing that it’s Smith Barney joint venture with Citigroup is worth $13 billion less than Citi estimates. Bloomberg’s Michael Moore breaks down the process by which investment bank Perella Weinberg will assess the JV this week.
The median home price in Greenwich, Conn. fell 11 percent in the first seven months of the year, according to Bloomberg, as Wall Street cut jobs and pared compensation.
Whither Europe: “The Spanish government has very limited financial market access,” Moody’s said in a statement yesterday to announce the ratings company had cut Spain’s grade three levels to Baaa3, one level above junk. Spain’s borrowing cost on 10-year bonds hovered near 7 percent, up from 5.1 percent at the beginning of the year. Moody’s also cut Cyprus’s grade on fears of contagion following the results of the Greece’s June 17 elections.
The downgrade didn’t prevent Spain’s Amancio Ortega, founder of retail giant Inditex, from becoming Europe’s richest person, according to the Bloomberg Billionaire Index.
“We have no sense that European partners will follow this tactic of blackmail heard from some quarters and stop funding,” Alex Tsipras, leader of Greece’s anti-bailout Syriza party told Bloomberg Television. Rather, Mr. Tsipras thinks that Greece can break the terms of the European rescue agreement signed by a previous Greek government without being forced to exit the eurozone.
The Lease Beat
Irving Place Capital, an investment fund, has leased the seventh floor of 745 Fifth Avenue sources say. The firm will be moving to the space, which is 23,000 square feet, from 277 Park Avenue, where it was subleasing from the bank JP Morgan Chase.
Credit Agricole has renewed approximately 350,000 square feet at 1301 Avenue of the Americas in one of the largest leases to get done in the second half of 2011.