This is Kryptos:
It’s an encrypted sculpture by Jim Sanborn which stands outside the offices of the Central Intelligence Agency in Langley, Virginia. It was placed there in 1990. Read more
Live markets commentary from FT.com
Telecom Italia scraps dividend || Sony sells former headquarters || Bharti in talks with Carrefour and Aeon || Brussels to give sharholders say on pay || Two Hong Kong IPOs scrapped || Alliance Trust preparing for Scottish independence || European Stocks lower ahead of US payrolls Read more
We know who he is, we just don’t get what he’s doing. He does so like confounding expectations on his island of stability.
This time with inflation at 1 per cent there was a belief that Draghi would make some sort of compromise gesture while keeping rates on hold, even if it amounted to SMP tokenism. But, nope, he disappointed… despite the ECB’s own 2016 inflation forecast coming in well below 2 per cent. Doing nothing in the face of that isn’t exactly reassuring — it’s a lot easier to fight deflation risks than the real thing. Read more
First there were the tweets (since deleted) that appeared to get China’s interest in Treasuries the wrong way round. Now Bill Gross has started to see the hand of his former co-chief investment officer everywhere he turns.
Reuters reports that Pimco’s main man told them he had “evidence” that Mohamed El-Erian was behind the WSJ’s brutal account of the rift at the top of the bond house, but when they asked to se it? Well: Read more
Markets: A week that began with a global shift away from risky assets was on track to end with broad equity gains. China’s tightly controlled currency, the renminbi, strengthened against the dollar for a fourth straight session, following its biggest weekly loss in nine years last week. (FT’s Global Markets Overview) Read more
The UK Financial Conduct Authority has published its long awaited rules for crowdfunders and peer-to-peer lenders. You can read the full policy statement here, but lets cut straight to some frothy outrage from Barry James, founder of the Crowdfunding Center.
On a day like today one has to wonder whether our FCA is the worst regulator in the western world. The words that spring first to mind are inflexible, stubborn and unimaginative. Maybe it’s time for a change. Read more
Crowded trade alert.
Chris Cole, of volatility fund Artemis Capital, has an insightful piece in the latest edition of the CFA Institute Conference Proceedings Quarterly warning about one of the most popular trades of recent times: the shorting of volatility via Vix ETPs.
The speculative shorts on Vix futures as a percentage of open interest, for example, are already running at an all-time high. In Cole’s mind this now equates to the shoeshine boy trade of the modern era.
One of the ironies, he also notes, is that the trade simply synthesizes a much less efficient version of a 3-4 times leveraged position on the S&P 500. Read more
If you take the blue pill, the story ends. You wake up in your bed and believe exactly what the statistics tell you to believe. You take the red pill — you stay in Wonderland and I show you what the statistics just can’t see.
What we’re talking about is hidden debt. The debt that’s out there but which we can’t currently see or assess. That is, dark debt which as yet hasn’t been factored in or priced into asset prices that influence our financially abstracted version of reality.
We have of course been here before. During the subprime crisis unexpected sums of dark debt emerged from off-balance sheet bank liabilities, SIVs and such the like. The impact, as we all now know, was immense.
But there’s a very good reason to suspect that “dark debt” hasn’t gone away entirely. It may, as it turns out, still be lurking out there somewhere. Still skewing our perception of reality as it always did. Read more
We have always had a soft spot for Michael Hartnett’s winning line in word play. And the latest from the BoA ML strategist? Well …
Crimea River … flowing with liquidity
Which is one way of understanding a world in which Ukraine tensions were cause of stock market concern for about five minutes only, and suggests some non-geopolitical risks may lurk. Read more
Live markets commentary from FT.com
Tom Albanese named Vedanta chief executive || French telecoms group Bouygues confirms offer for SFR || The RMB continued its recovery || Crisis pressures U.S. on gas exports || Bank of England suspends employee amid forex probe || ExxonMobil targets $5.5bn spending cuts || ‘Cut the sugar’ WHO warns in new guidelines || Markets Read more
We’re fans of The Reformed Broker. Reluctantly, sometimes. But fans nevertheless.
So we should just note that a Josh Brown post from Wednesday, looking at the relentless growth of passive asset management and its effect on equity markets has, quite simply, gone viral.
In fact, if you are a market professional and it’s not in your inbox already this morning, you are a failure.
A weather update. February was a good month for US wind, but less so for hail, according to KBW.
Markets: A sense of calm returned to equity markets as the crisis in Ukraine retreated further from view. But investors remained cautious ahead of the European Central Bank policy decision due later on Thursday, and the closely watched US monthly jobs report on Friday. (FT’s Global Markets Overview) Read more
Live markets commentary from FT.com
US and Russia to hold talks as markets rally || Russia spends $11bn supporting rouble || Beijing signals growth concerns || Mark Carney signals start of reviews on bank bonuses || Standard Chartered suffers first profits fall in a decade || Solar cell maker heads for first corporate bond default in China || Japan looks to Bitcoin tax || Spanish yield at 8-year low || Markets Read more
The ECB’s deflation problem has been well covered.
Years of mass media conditioning that the UK has an inflation problem, however, have assured that the BoE’s flirtation with disinflationary pressure has by and large been overlooked.
But there are clues that this might become a problem soon enough. Read more
Things you don’t expect on the night before a dovish National People’s Congress announces a 7.5 per cent growth target include… the announcement of the probable default of tiny corporate “11 Chaori Bond” which, if it comes to pass, would be China’s first onshore corporate bond default.
From the FT:
Shanghai Chaori Solar Energy Science & Technology, a Chinese maker of solar cells, announced on Tuesday that it would not be able to pay the Rmb89.8m ($14.6m) annual interest on a Rmb1bn bond that it issued two years ago.
Vladimir Putin’s gave his first official address on the Ukraine crisis on Tuesday.
Among the key points made (via Reuters, and emphasis on our favourite snap):
RUSSIA’S PUTIN SAYS USE OF FORCE IN UKRAINE IS A CHOICE OF LAST RESORT
PUTIN SAYS RUSSIA RESERVES RIGHT TO USE ALL OPTIONS IF THERE IS LAWLESSNESS IN EASTERN UKRAINE
RUSSIA’S PUTIN SAYS THOSE CONSIDERING SANCTIONS SHOULD THINK OF THE DAMAGE THEY MAY INCUR
RUSSIA’S PUTIN SAYS ALL THREATS AGAINST RUSSIA ARE “COUNTERPRODUCTIVE AND HARMFUL”
PUTIN SAYS RUSSIA READY TO HOST G8, BUT IF WESTERN LEADERS DON’T WANT TO COME “THEY DON’T NEED TO”
The Institute for Conflict Management has reported that total deaths in terrorism-related violence – including civilians, security personnel and terrorists – have fallen to 885 in 2013 from 5839 in 2001 (Chart 9). Not surprisingly, higher growth is cooling violence. Fatalities are also falling in each of India’s three key theaters of conflict: cross-border terrorism, Maoist rebellion and insurgency in the North East (Chart 10).