Neil's Feed
Feb 29, 2012
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Markets might yawn at second ECB cheap-money fix

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The ECB’s second three-year liquidity facility should attract enough takers to avoid a spookily-low outcome. But those expecting a massive splurge will likely be disappointed. And the prospect of further long-dated funds looks remote, for now.

Feb 17, 2012
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ECB Greek loss dodge heralds end of bond buying

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The European Central Bank will avoid losses on Greek bonds through a legal manoeuvre. Such special treatment will not please the private bondholders who are being asked to take losses on their Greek debt. It might also bring the ECB’s bond-buying programme to an end.

Feb 16, 2012
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High yield U.S. tourists sail into European storm

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By Neil Unmack and Agnes Crane

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The European Central Bank’s cheap money and the siren call of high yields are luring global investors into the European junk bond market. High-yield bond issuance is up nearly 70 percent so far this year over the same period of 2011, according to Thomson Reuters data. It may seem odd given the uncertain future for the euro zone, but the ECB’s move to flood the banking system with three-year loans has given investors confidence that a financial meltdown can be averted. The Federal Reserve’s commitment to near-free funds is encouraging U.S. investors to look to European debt for juicer returns. Some 63 percent of high yield bonds sold by European companies in January were issued in dollars, according to Morgan Stanley.

Feb 9, 2012
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ECB’s graceful surrender may lend Greece more time

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Another piece in the puzzle that is the Greek second bailout may be slotting into place. The European Central Bank has reportedly agreed not to demand repayment on its Greek bonds at face value. That makes sense.

Feb 8, 2012
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Italy’s revival brings little joy to fund managers

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Europe’s bond investors may have already missed the best trade of 2012. While many fund managers were steering clear, Italian government debt rallied in January, outperforming other euro zone sovereigns. But those who missed the boat may find better value elsewhere.

Feb 2, 2012
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Europe can’t force Greece into never-default land

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By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own

A German proposal to tie Greece’s future with a pledge to never default looks barmy. The euro zone already has a hard enough time getting Greece to reform its economy, partly because Greece can wield the threat of a messy default. When Athens reaches a primary budget surplus, as it should this year, it will be in an even stronger negotiating position because it could then default on bailout loans and still pay for the government’s expenses.
Germany has come up with the idea of forcing Greece to prioritise international debt repayment over domestic bills. The euro zone would then be assured it would get its money back. This in turn would make it more credible in pressuring Greece into speedier reforms, since the Greeks themselves would feel the pain of non-compliance.

Jan 27, 2012
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Ireland’s bond swap shows how self help can work

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By Neil Unmack and Margaret Doyle

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Greece is on the cusp of a disorderly default; Portuguese bonds are tanking as investors price in sharp haircuts. But Ireland has successfully tapped international debt markets for the first time in 16 months.

Jan 24, 2012

What would a Greek plan B look like?

(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own)

By Hugo Dixon and Neil Unmack

LONDON, Jan 24 (Reuters Breakingviews) – What would a Greek
Plan B look like? If brinkmanship over the so-called voluntary
debt restructuring fails, Athens will be staring at a hard
default. The challenge will be to prevent it being a messy one.
That means bailing out Greek banks.

Jan 24, 2012

Breakingviews – What would a Greek plan B look like?

(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own)

By Hugo Dixon and Neil Unmack

LONDON, Jan 24 (Reuters Breakingviews) – What would a Greek
Plan B look like? If brinkmanship over the so-called voluntary
debt restructuring fails, Athens will be staring at a hard
default. The challenge will be to prevent it being a messy one.
That means bailing out Greek banks.

Jan 20, 2012
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Sale of Lehman dregs shows risks of ECB largesse

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Bundesbank is no match for King Arthur. The legendary Celtic ruler drew the sword Excalibur from the stone with little effort, but the German central bank has taken over three years to start to offload its own Excalibur, a collateralised debt obligation backed by risky real estate debt constructed by the chivalrous financial engineers at Lehman Brothers. The bonds are among collateral the euro zone central banks had accepted in exchange for loans to Lehman and several Icelandic banks, which failed in 2008, forcing the euro zone to take a 5.7 billion euro provision, subsequently reduced to 2.2 billion euros.