Manmohan Singh, India’s prime minister, is desperately trying to put his administration’s legislative agenda back on course in an attempt to weather a storm over corruption. The scandal has paralysed the world’s largest democracy, the FT reports. The Congress party-led government introduced proposed legislation in parliament on Tuesday to secure tax and banking reform in the face of a barrage of protest over a cash-for-votes scandal. It is the latest of a series of high-profile corruption scandals to have broken around the premier. Read more
Portuguese opposition parties have refused to back austerity measures drafted to help the country avoid a bail-out, in a rebuff that could trigger both a snap election and an international financial rescue, the FT reports. The political crisis in Lisbon threatens to dominate a European Union summit on Thursday, at which leaders hope to finalise “a grand bargain” to resolve the eurozone debt crisis. Read more
Global stocks have nearly regained levels seen before the Japan earthquake as the rally from last week’s frantic sell-off rumbles on, though impetus is faltering as the session progresses, reports the FT. The FTSE All-World equity index is up 0.4 per cent to 221.48, mainly powered by Asian bourses, as investors welcome signs of progress at the Fukushima nuclear power plant and hope that the dislocation to the world’s third-biggest economy will not derail the global recovery. New York’s S&P 500 is down 0.4 per cent and the Vix volatility index is down 2.4 per cent to 20.12 as US traders pause for breath after a 1.5 per cent gain on Monday. US Treasuries were also little moved in trading. The All-World has recovered nearly 5 per cent since dropping to an intraday low of 211.9 a week ago. The day before the earthquake and tsunami struck, the benchmark had closed at 221.7. Radiation fears have eased, but the undercurrent of concerns about strife in the Mideast remain. Indeed, it was those worries – and the bullish impact the tension is having on the oil price – that had contributed to a 1.9 per cent stumble for stocks the day before the quake hit Japan’s north-east. Oil is firmer on Tuesday and with investors warily watching reports out of Libya, Yemen and Syria, some commentators argue it may be difficult for riskier assets to make further headway until things quieten down in the region. Read more
High radiation levels have been found in the sea off Japan’s earthquake-stricken nuclear power plant, fuelling fears about the impact on the nation’s fishing industry, reports the FT. Operator Tokyo Electric Power said unusual amounts of five kinds of radioactive material had been found in water samples near the Fukushima Daiichi plant. One of the substances, Iodine-131, was found at nearly 127 times the permitted level. Read more
For the commute home, or while wondering if expedia also does tax holidays,
- Do not gloss over munis’ frailties. Read more
Yemen continues to crumble on Tuesday, Reuters reports:
Yemeni President Ali Abdullah Saleh’s 32-year rule seems near collapse. His exit would spell uncertainty for his broken country and discomfiture for U.S. and Saudi friends, still backing their “ally” against al Qaeda. Read more
FT Alphaville loves documents sent in anonymous brown paper envelopes.
Here’s one we received Tuesday: Read more
Every time you switch on the financial TV networks all anyone is talking about is the EWJ exchange-traded fund.
As if it’s a perfect proxy for Japan. Read more
The Everest for-profit education network says of a decision to attend one of its colleges: “It’s a decision that deserves respect.”
Perhaps — but it’s definitely risky. Read more
Some palaver in the market on Tuesday that one or the other of a) Ireland or b) Allied Irish Banks had missed a coupon payment…
It’s not true. On either count. Read more
The above is a presentation from a representative of Tokyo Electric Power on the subject of spent fuel storage at the Fukushima nuclear power plant. In November 2010, it was delivered to the IAEA.
In March 2011, it understandably went viral. Read more
Interesting note, this.
It’s from the banks team at RBS and it looks at the reaction to Monday’s news that the US Treasury plans to sell $142bn of Mortgage-Backed Securities (MBS) purchased during the crisis as part of its Fannie Mae and Freddie Mac bailout. Read more
Alan Greenspan’s latest in CFR’s International Finance, wherein the former Fed chair blames ‘government activism‘ for the current (paltry) state of the US recovery.
Right. Ignore our eurozone liquidity maths from last week.
ECB unlimited liquidity + ELA unlimited liquidity = eurosystem unlimited liquidity, more or less. That should be; ECB unlimited liquidity + ELA unlimited liquidity ≠ eurosystem unlimited liquidity, according to Nomura’s Lefteris Farmakis. Read more
Live markets commentary from FT.com
Here’s a quick supplement to FT Alphaville’s post on Friday about post-earthquake flows into the iShares MSCI Japan fund.
Citigroup confirmed in a note on Friday that the flight from disaster took place everywhere but the disaster site: Read more
We’ve brought you an update of the situation at Japan’s strickent Fukushima nuclear power plant. So here’s a bit more from JPMorgan economist Masamichi Adachi
In terms of the macroeconomic impact in the aftermath of the earthquake and tsunami, and amid ongoing efforts to contain radioactive leakages at the Fukushima nuclear plant, Adachi says the immediate concern is the supply chain disruption. Read more
There is a growing backlash in Japan about what many Japanese — and also expats, judging by sentiments voiced in conversations we’ve had in Tokyo — see as sensational or even hysterical reporting in the wake of Japan’s March 11 earthquake and tsunami.
Foremost are complaints about (mainly foreign) media coverage of Japan’s efforts to contain radioactive leakages from the crippled Fukushima nuclear power plant, with some more extreme reports suggesting a nuclear holocaust is imminent. Read more
What price a May (or even April) rate hike after Tuesday’s higher than expected inflation reading? What price a mea culpa from Mervyn King?
Update: The inflation number’s out — and higher than expected. February saw CPI at 4.4 per cent, RPI at 5.5 per cent, which rates are at highs not seen since 2008 or 1991 year on year, respectively. The ONS said that clothing, energy and housing costs triggered this month’s upward shift.
The wrong kind of leaves on the line; pole-vaulting, eye-gouging inflation in the UK. Sadly, having similar effects these days. Read more
Tokyo Electric Power will be made to compensate farmers near its radiation-leaking nuclear power station for losses related to a widening ban on the sale of agricultural products from the area, Japan’s government has said. The FT reports that in the first direct reference by a high-ranking government official to reparations by Tepco for victims of the world’s worst nuclear accident in a quarter of a century, Yukio Edano, chief cabinet secretary, said the state would “have Tepco take responsibility”. But he added that if the company is unable to compensate people adequately, “then by law the government will step in and guarantee the claims”. The cost of cleaning up the Fukushima Daiichi nuclear plant, compensating victims and buying extra coal, gas and oil to make up for lost nuclear capacity is certain to be in the billions of dollars. Read more
Punch Taverns — aka the Toxic Pub Company — won’t be handing back the keys to its troubled tenanted inns after all.
Chief executive Ian Dyson has decided on a break-up instead, creating a pub world equivalent of a ‘good bank’ and a ‘bad bank’. Read more
Global stocks regained levels seen prior to the Japan earthquake, but the sharp rally from last week’s frantic sell-off showed signs of running out of steam, the FT’s global market overview reports. The FTSE All-World equity index was up 0.6 per cent to 221.9 as investors welcomed signs of progress at the Fukushima nuclear power plant and hoped that the dislocation to the world’s third biggest economy would not derail the global recovery. The All-World has recovered nearly 5 per cent since dropping to an intraday low of 211.9 a week ago — a time when traders were worried that radiation contamination could affect the world’s third biggest economy. The day before the earthquake and tsunami struck, the benchmark had closed at 221.7. Oil was softer on Tuesday, but with investors warily watching reports out of Libya, Yemen and Syria, some commentators argued it may be difficult for riskier assets to make further headway until things quieten down in the region. US equity futures were down 0.1 per cent. Read more
The Portuguese sovereign’s access to funding has been a-ok thanks to the European Central Bank’s liquidity ops. That of its banks and corporates — not so much.
Off Bloomberg: Read more
The supply chain issue affecting Japan appears to be getting much worse than initially expected.
For example, as Reuters reported on Tuesday, a shortage of parts is now threatening to force Sony to cut production or suspend output at five more plants in Japan. Read more
Elsewhere on Tuesday,
- The fuel rods and the sea. Read more
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Hotheads, fainthearts and Gaddafi
The argument over whether to fight in Libya had many aspects to it – ideology, national interest, diplomacy, military calculation. But the most important divide in the western world was temperamental. The Libyan debate pitted the hotheads against the ditherers, the FT columnist says. The ditherers’ classic questions – “how will this end?”; and “what is the precedent we are setting?” remain the right questions to ask about Libya. What happens if Col Gaddafi holds on, or if the conflict is stalemated and the country semi-permanently divided? Read more
Breaking pre-market news on Tuesday,
- Punch Taverns to spin off managed pubs business, Spirit — statement. Read more
Radiation leaked into the sea from Japan’s crippled nuclear plant, contaminating the water and raising concern that fish and vegetables may become tainted, as workes at the plant continued to try to contain leakages at troubled reactors, reports Bloomberg. Japan has been battling for 12 days to prevent a meltdown at the nuclear plant. Electricity from the power grid and back- up power systems to the reactor were cut off and damaged in the March 11 quake and tsunami, leading to explosions at the steel- and-concrete structures around the reactors and overheating fuel rods.Tepco, the plant operator, expects to restore power to parts of the building housing the most damaged reactors, 1 through 4, by the end of Tuesday, a spokesman said. Reactors 5 and 6 were shut down before the earthquake and suffered little damage. Power was restored to those units this week. The government, which says it hasn’t detected radiation readings in food that might be harmful to health, dispatched a ship to the site as part of increased monitoring. Read more
Mapletree Commercial Trust delayed its planned S$1bn ($789m) initial public offering in the city-state due to uncertain market conditions, reports the WSJ, citing a person familiar with the situation. Mapletree Commercial Trust—a unit of Mapletree Investments, which is held by state investment firm Temasek Holdings—was looking to raise the money via a real estate investment trust and had planned to file the IPO prospectus with the Monetary Authority of Singapore Monday, the person said. Read more