RSS feedUS economic momentum, bullet-point-y version
Since we found it a useful exercise, here’s a quick, simplisticfied snapshot of the US recovery. Or non-recovery, whatever it is. Not all of these carry equal weight, naturally:
Stuff that looks good
- Lower oil and gas prices.
Nehmerländer!
That’s one unhappy Minister-President of Bavaria venting on Tuesday.
Aber was ist der Länderfinanzausgleich, you might well ask.
It’s a system of fiscal transfers between the federal states of Germany to equalise living standards.
M-euro, a lesson in money supply from Kenya
If Europe = yesterday, the stuff that’s going on in Kenya right could very well = the future.
Here’s an extract from a speech by Njuguna Ndung’u, Governor of the Central Bank of Kenya, talking about the exciting developments hitting Kenya’s financial sector.
Eurozone seniority, needling du jour
A one-liner, but from one preferred creditor to another…
Directors agreed that the ECB will have to continue to play a role in the crisis response, including through liquidity provision and securities purchases.
Happy 2nd Birthday, Dodd-Frank
A year ago, give or take a couple of days, former FT Alphavillian John McDermott asked the question: is it worth giving a one year-old a birthday present?
Davis Polk clearly thinks so — another year has passed and the law firm has a birthday present for the now two-year old Dodd-Frank Wall Street Reform and Consumer Protection Act.
The yield negativity is spreading…
Here’s an interesting factoid by way of Bartosz Pawlowski from BNP Paribas’ CEEMEA team — Eurozone yields aren’t the only ones being haunted by negativity.
As it turns out, euro-denominated non-eurozone debt is also treading perilously close to the zero mark.
We told you negative rates were a big deal
Okay. It’s true. We’ve become slightly obsessed with negative yields at FT Alphaville. Especially with regards to what they signify for the financial industry.
Though, for a long time we’ve felt very much alone with this obsession.
US Markets Live transcript 18 Jul 2012
Markets Live chat transcript for the chat ending at 15:04 on 18 Jul 2012. Participants in this chat were: Cardiff Garcia Joseph Cotterill, FT CGHello! JCHello, from a sweltering Midtown Manhattan
The capital spending crisis, miner edition
An interesting column from Clyde Russell at Reuters (H/T John Kemp) pointing out the key problems facing miners today. They can’t get sufficient returns on capital invested, so should they even bother trying?
From Russell:
Markets Live transcript 18 Jul 2012
Markets Live chat transcript for the chat ending at 11:18 on 18 Jul 2012. Participants in this chat were: Bryce Elder/FT Tony Tassell BEGood morning everyone. BEWelcome to another Markets Live.
The terminal disease afflicting banking
Finding out that you are dealing with a terminal disease is never easy.
The natural reaction is to seek out a cure, no matter how bleak your chances. You will, for the most part, do almost anything to live.
The (early) Lunch Wrap
Good morning New York…
FT ALPHAVILLE
Spain’s borrowing terms form the EFSF are set to be muy generoso compared to past bailouts. Its successor, the ESM, would price margins on any loans it might also make to Spain separately,
[JPM Whale-Watching Tour] A back office failure to put right
Or, “More power to the cupcake police”. (Bear with us)
How is pricing within banks, and in markets more generally, policed?
It’s a question pertinent to the setting of benchmarks like Libor. It’s also become relevant in the ongoing autopsy report of JPMorgan’s $4.4bn loss-making synthetic credit portfolio held by its Chief Investment Office.
China’s transmission mechanisms in a knot
One of the enduring arguments about China is that the government has ample firepower to sort out the country’s economic challenges. All that fiscal surplus, all those USD reserves. Firepower to burn.
Yet it’s looking increasingly difficult for policymakers to ward off a hard landing without re-igniting inflation and of course,
It’s that margin-less EFSF again
ERVV: n marginaali on nykyisin 0 korkopistettä
Which roughly translates from the Finnish as:
EFSF: the margin is now zero basis points
It’s a throwaway line in the presentation on Finland’s Spain collateral,
Further reading
Elsewhere on Wednesday,
- Monetary policy: a blunt club or a surgeon’s scalpel?
- Voodoo Finance is back.
- A crop crisis brews.
- Could the Libor scandal become a central bankers’ scandal?
- Four technologies that could revolutionise the way we live.
The 6am Cut London
Asian stocks swung between gains and losses on hopes for more US monetary stimulus and fears about China’s growth. Chinese Premier Wen Jiabao warned of a “severe” jobs outlook, fueling concern the economy has yet to bottom.
The Closer
ROUND-UP
The FT’s markets round-up: “After falling sharply following Mr Bernanke’s testimony, US equities recovered to close higher on the day supported by a couple of well-received US corporate earnings.
The Libor lawsuits defence
Last week we posted a note from Morgan Stanley analysts, who tried to guess at the final ultimate cost of the Libor scandal to banks – a combination of expected regulatory fines, litigation outcomes,
Finland’s Spanish seguridad, some details
Spain’s banks really are providing Finland’s collateral for the EFSF/ESM bailout of Spain’s (weaker) banks.
The Finnish finance minister announced a deal on Tuesday. Here’s the presentation (in Finnish,
That thousand-yard, ‘oh, you’re asking me why you can’t fix the fiscal cliff, again?’ stare
Caption if you wish. On the Libor front — asked if it’s reliable… Bernanke told senators that “I can’t give that assurance with full confidence”. (Testimony here)
Happier homebuilders…
Tack this onto the list of recent signs (see also here) that US housing has bottomed and started to recover…
Builder confidence in the market for newly built, single-family homes rose six points to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July,
Bernanke testimony
UPDATE: Libor question right off the bat, and it’s clear that Bernanke was prepped for it. He said that the issue is “troubling” and that Libor is structurally flawed, but it was then complicated because there was no interbank lending going on at the time.
Eat what you submit: examining new ways of forming Libor
Some suggestions on how to improve Libor…
The first is from the Economist, which compares Libor with the problems facing an art gallery or museum — price discovery in many markets is a tricky process.
Is China’s electricity data worth any of your precious attention?
The slowing growth in China’s electricity output and consumption has been drawing a lot of attention the past few months. Production in June growth was flat, year-on-year, prompting many questions as to how Q2 GDP managed to grow at 7.6 per cent.
Markets Live transcript 17 Jul 2012
Markets Live chat transcript for the chat ending at 10:56 on 17 Jul 2012. Participants in this chat were: Tony Tassell Lisa Pollack, FT TTgood morning…early start TTthis should be interesting…
The (early) Lunch Wrap
Good morning, New York…
FT ALPHAVILLE
HSBC came in for a kicking in the Senate Subcommittee on Investigations into anti-money laundering and exposure of the US financial system to drug and terrorism financing. HSBC and its US affiliate,
It’s a busy day at the Select Committee
We have Sir Mervyn King, Governor; Paul Tucker, Deputy Governor; Donald Kohn and Lord Turner, Members of the Interim Financial Policy Committee, Bank of England.
At pixel time this was going on…
Tyrie: