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Same Old, Same Old…

20 October 2017 by lberuti

When you comment financial markets at the moment, the risk of sounding like a broken record is real. There is currently nothing stopping Stockzilla, and it is relentlessly dragging risky assets higher across the board. While the S&P reached a new record high today, credit indices closed at their tightest levels for the new series… again. Yesterday’s blip now seems a distant memory, and except lamenting on the lack of volatility, one could also be tempted to comment on NSANY ( Nissan Motor Co Ltd ) which was today in the news for all the wrong reasons, even if it sounded all too familiar. It is both another example of a scandal hitting a Japanese corporate – we have heard of the woes of KOBSTL ( Kobe Steel, Ltd ) a few weeks ago – and another example of a scandal hitting a car manufacturer – today we also heard that the office of BMW had been raided this week by EU watchdogs as part of a cartel investigation -. Uncertified technicians have conducted vehicle inspections, even after a previous disclosure of the practise led to a major recall. Production will be suspended at all the company’s Japanese factories until further notice. NSANY’s 5-year risk premium is still a meagre 43bps, but that is twice its level 3 weeks ago.