Posts from Thursday Jul 5 2012

The Closer

ROUND-UP

Central banks stole the show but stocks barely budged. The S&P 500 closed down 0.47 per cent at 1,367.58. The Nasdaq closed flat. Calm before the payrolls numbers (Reuters). Read more

Angels and debtors

Sovereign deficit du jour (all figures in euros unless stated otherwise):

The consolidated financial statements of the Holy See for 2011 closed with a deficit of 14,890,034. The most significant items of expenditure were those relative to personnel (who as of 31 December 2011 numbered 2,832) and to the communications media considered as a whole. The result was affected by the negative trend of global financial markets, which made it impossible to achieve the goals laid down in the budget. Read more

Pulp Finance

We think it’s worth noting that the The Economist is now using the Bankster word in its coverage of the Libor scandal, due to be published in print on Friday, but available in pixelated form here.

That’s the “newspaper’s” leader on the matter. An extract: Read more

Wolfson economics prize, the submissions

Capital Economics’ Roger Bootle has won the £250,000 Wolfson Economics prize for finding a practical way to break up the eurozone.

Though, as it turns out, Bootle doesn’t think it would be all that practical. Read more

Well, we were asking about ECB negative rates…

(That’s Lisa, at Thursday’s European Central Bank press conference) Read more

Give me reason to love you!

So, where’s the incentive to hold a euro now?

ECB dances in the dark

As expected the ECB has cut its main refinancing rate by 25 basis points to 0.75 per cent and the marginal lending facility (emergency funds) by 25 basis points to 1.50 per cent.

In a less expected move they also cut the deposit rate to zero. Read more

The BoE and China hit together again

And lo, did the market move. From the BoE:

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.  The Committee also voted to increase the size of its asset purchase programme, financed by the issuance of central bank reserves, by £50 billion to a total of £375 billion… Read more

Pariah profits in an age of ‘negative carry’

Here are some charts we knocked up (in our usual MS paint, so excuse the pixelation) to try and explain why the banking system’s biggest problem may lie in ‘negative carry’ — a phenomenon that would make investment-focused lending unprofitable, pushing the onus instead on pariah-profits extracted from economically destructive practices.

We begin with the following (click to expand): Read more

Markets Live transcript 5 Jul 2012

Live markets commentary from FT.com 

The (early) Lunch Wrap

Good morning New York…

FT ALPHAVILLE Read more

A manufacturing to housing hand-off

We think this idea deserves a little more attention. It’s another reason to maybe not panic about the fall in the US ISM manufacturing reading earlier in the month.

From Josh Lehner at Oregon Economic Analysis (and a healthy hat-tip to Calculated Risk for pointing the way): Read more

Further reading

Elsewhere on Thursday,

- The big losers from Libor manipulation. Read more

Moody’s revises Barclays’ debt rating outlook to negative

Key sentence is “senior resignations at the bank and the consequent uncertainty surrounding the firm’s direction are negative for bondholders”, although they add that recent events could be positive over the long term. Below is the full statement:

Moody’s changes outlook on Barclays’ standalone rating to negative Read more

The 6am Cut London

Asian stocks were slightly lower today as investors await central bank decisions. The ECB is anticipated to cut rates to a record low, while the Bank of England is also expected a new bond buying programme. The Shanghai Composite was the biggest mover, down 1.19%. Crude oil and the Australian dollar also fell. US markets were closed on Wednesday. Gold was close to a two-week high on easing expectations. (Bloomberg, Reuters, Financial Times)

Volkswagen has agreed to buy the remaining half of Porsche’s carmaking operations that it does not already own for €4.46bn. (Financial TimesRead more