May 2013
5 posts
The deflation gang
We’ve written about it before but it bears repeating. China and Japan are ganging up to send deflation abroad and, in doing so, boost asset prices.
From Deutsche’s Alan Ruskin on Tuesday:
Firstly, China is a disinflationary force not only on the commodity side, but on the non-commodity goods side: US import prices from China declined -0.1% in April, and were down 0.9% y/y. Secondly,...
“The bottom line is the titans are working from the wrong playbook. We’re all, to...”
– Another must-read from Mark Dow.
(Joseph)
Meanwhile, in China prop trading is taking off
While much of the west outlaws it..
The country’s securities regulators have handed a boost to this business by cutting the capital that brokers must hold against their prop trading activities and expanding the kinds of assets in which they can invest.
More:
The broader industry saw similar patterns, making more than one-fifth of its revenues, or Rmb29bn, from securities investment income...
“But a Financial Times analysis of last year’s tips [at the Ira Sohn conference]...”
– Dan McCrum and Arash Massoudi
(Cardiff)
April 2013
19 posts
Banker, 40, GSOH, WAA, wants to meet new friend....
FROM efinancial but FOR bankers struggling to get by:
The best antidote to over-spending is to retain a single partner for life, said Cooper: it helps put things in context. Alternatively, try cultivating friendships outside of banking. “I always had a lot of hobbies which brought me into contact with people from different walks of life,” said Shapiro. “I always knew people who earned £25k-30k...
(No longer) partying like it's Y99
Just think of the energy bill. That’ll cheer you up a bit.
(David)
*SPAIN DELAYS REACHING EU BUDGET DEFICIT TARGET 2...
*SPAIN DELAYS REACHING EU BUDGET DEFICIT TARGET 2 YEARS TIL 2016
FT Alphaville virtual newsroom comment:
Is that, effectively, a sovereign profit warning?
Competition
The boy Olli Rehn has thrown himself into the mix to correct some misperceptions:
The current public debate on fiscal policy is often portrayed as a political battle between the Austerians and Spendanigans. As a doctrinaire agnostic, I refuse to take an oath to either of these, as there is no silver bullet or single issue movement that can solve the present crisis and return Europe to a...
Immigration and US housing
From the FT’s Pan Kwan Yuk and Anjli Raval:
Although they represent close to 13 per cent of the US population, immigrants accounted for nearly 36 per cent of growth in home ownership between 2000 and 2010, according to a report by the Research Institute for Housing America and the Mortgage Bankers Association. …
The number of homeowning immigrant households is projected to rise by...
Ye olde downsizing
Thank you HSBC for this novel, exceptionally odd use of demise:
H/T to David Enrich for the spot.
(David)
Annotating the history of 10 year US treasury...
From Goldman:
And some notable bubbles in history while they’re at it:
(David)
“First, Reinhart and Rogoff selectively exclude years of high debt and average...”
– Mike Konczal, summarising a new paper by Thomas Herndon, Michael Ash, and Robert Pollin. The authors find flaws in the methodology used by Reinhart and Rogoff in their controversial work on the relationship between high debt levels and economic growth.
(Cardiff)
The tapering is out there
Or it is in this table from the NY Fed survey of Primary Dealers, anyway. That would be the Fed lowering monthly asset purchases in Treasuries and ABS to $70bn (from $85bn) by December in the median view.
Someone tell the gold market!
Oh wait.
Subtlety in Greece
From ekathimerini.
A German national was… arrested shortly before boarding a Lufthansa flight for Germany, according to authorities.
An inspection by customs officials reportedly revealed that his luggage contained 7,185 kilograms of gold and 293,435 euros in cash. The same suspect is believed to have attempted to smuggle out another bag containing 425 kilograms of silver.
Details of...
“The amount Cyprus had to find from depositors went up by €5bn in the nine or so...”
– - Joseph writes here about some interesting bits in from the leaked draft Cyprus Debt Sustainability Analysis.
(- Kate)
Stumbling JGBs
One to keep an eye on:
That’s Japan’s 5 year, 10 year, and 30 year bonds all popping sharply since Kuroda hit the “quantitative and qualitative” easing button. The moves aren’t that big in nominal terms but for JGB’s they are dramatic — as Nomura said of the 30yr, it’s the sharpest three-day steepening in super-long zone since April 1995.
More...
Because Ireland needs Kuroda love too
That chart shows Japanese investors resuming purchasing Irish bonds in February.
According to Nomura they were net buyers of Ireland fixed income products to the tune of JPY72bn ($0.8bn), the biggest net buying since September 2010. Not proof they will be big beneficiaries of Kuroda’s cash but it’s encouraging:
(David)
March 2013
14 posts
“Euros now make up only 24 per cent of their reserves, the lowest since 2002, and...”
– Robin Harding, “Emerging markets dump euro reserves”
(Cardiff)
“The economists found that the securitization workers showed no awareness that...”
– Justin Lahart, citing a new paper by economists Ing-Haw Cheng, Sahil Raina, and Wei Xiong
(Cardiff)
“Still, the experience of other capital-controlled countries gives us some...”
– ‘Banco de Mattress’ looms for Cyprus — John Dizard’s column in this weekend’s FT
(Cardiff)
Bank holidays aren’t always fun
And proper ones are really really rare:
From Nomura about Cyprus:
Indeed, now that the banks have been shut it seems hard to imagine that a reopening would not lead to a massive run on the banks. At the very least, restrictions on what depositors will be able to do with their savings are likely to remain in place for quite some time…
The fact that Cyprus now faces days of bank holidays shows...
Fedwire archaeology
In its own little way, this is a groundbreaking chart.
What it actually says isn’t too groundbreaking: it shows the crunch in US term interbank lending from BNPP in 2007 to Lehman and beyond; you can see the maturities of loans contracting at key points. Well surprise surprise, only central banks were handing out cash in the market at this time.
It’s where the data come from.
...
Bloomberg sponsoring People Don't Know When To...
“U.S. Recession Began Middle of 2012, Achuthan Says”
“Dow 36,000 Is Attainable Again”
(Cardiff)
Remembering the madness
Chart from the the Irish Central Statistics Office in 2008 via Noble Francis.
(David)
“The Private Office of His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz...”
– From a press release sent to reporters by said private office. HT to the FT’s Tom Braithwaite for forwarding. Historically, of course, the kingdom has been happy to cite the prince’s Forbes rankings and those of other publications.
February 2013
19 posts
Pounded pound
That’s from Deutsche’s Alan Ruskin and it ain’t pretty. Said Ruskin:
A quick scan pretty much shows the UK underperforming relative to most countries on almost every category, and even the few better performing categories are either because strong imports are ambiguous (could signal better domestic demand, but also increased import penetration and a deteriorating trade...
Italian Senate electoral rules
The lower house is relatively straightforward: One coalition will end up with clear majority there because the group that gets a plurality automatically gets 55% of seats. At the moment the centre-left coalition is ahead on the vote count, but only slightly.
The Senate is way more complicated, however. There’s no clear winner and it doesn’t have the same kind of overarching mechanism...
Alberto Nardelli: Initial thoughts on Italian... →
albertonardelli:
Based on current projections:
- neither the centre-left nor the centre-right will have a majority in the senate, both even with Monti’s support wouldn’t reach the required 158 seats.
- in the lower house, projections have the centre-left just ahead (and would therefore win 55% of seats). M5S…
Extreme PBOC market operations
Via Chinascope: PBOC Drains a Record CNY 910 Bn in Liquidity from Money Market
- Izzy
The anomaly of higher prices AND higher stocks in...
This was from SocGen last week, but still very relevant:
The rally in copper prices since mid-December 2012 has been accompanied by an increase in LME warehouse stocks of copper. LME stocks of copper have nearly doubled from a recent low of 210,000 tonnes to current levels of 401,675 tonnes. Copper prices in the face of mounting LME stockpiles of the metal have remained resilient and continue to...
Parents in Meghalaya often name their children...
Another Adolf Hitler is attempting a rise to power — this time in northeast India, Al Jazeera reports. The man’s full given name is Adolf lu Hitler R Marak, and he is running for the 60-member state assembly.
Because of a strange naming custom in the state of Meghalaya, Hitler is one of many bizarre namesakes vying for office on Feb. 23. Joining him on the ballot is Frankenstein...
Le Network moment
This missive (updated with original here) was sent by Maurice Taylor, Titan’s chairman and chief executive, to Arnaud Montebourg, the controversial French industry minister:
Dear Mr. Montebourg:
I have just returned to the United States from Australia where I have been for the past few weeks on business; therefore, my apologies for answering your letter dated 31 January 2013.
I appreciate your...
“A Silicon Valley company, Blueseed, has proposed a novel way to skirt U.S....”
– WaPo
(Cardiff)
E-o-n-i-a
(To be sang a la Patti Smith)
Look here, it’s eonia back to record lows:
And look here, some randomish thoughts, in no particular order, on what might be causing it:
There’s a higher probability of an ECB rate cut priced in — see negative rate (bluffs) for more.
The mix of banks participating in eonia has ‘improved’ again. Although it seems unlikely it ever...
"BOOM! My phone IS my conference room."
So this Verge vid of a Qualcomm keynote first came out in January.
How has this not taken over the world in the time since. How. (H/t Bryce)
Charting is the first casualty of currency war
The Day Today, 1990s financial news satire (watch this), or HSBC, ‘Currency War Special’, 13 Feb? You decide.
Just noting. (Joseph, from a glass house)
Related link: “People here are literally BURSTING with war” - The Day Today
