Posts from Wednesday Dec 12 2012

The Closer


FT markets round-up:“Wall Street settled flat and global stocks surged towards 16-month highs, with the dollar under pressure and US bond yields at their highs for the session. The FTSE All-World equity index was up 0.3 per cent to 222.58 as Wall Street closed, only fractionally short of its best closing level since July 2011. The US S&P 500 ended fractionally higher. Traders reversed an early rise of 0.75 per cent as Ben Bernanke, the Fed chairman, held a press conference to discuss the central bank’s latest decision, but while stocks had threatened to end in the red, a late bounce left the index at 1428.48, up 0.64.” (Financial TimesRead more

US Markets Live, Bernanke Presser 12/12/12

Live markets commentary from 

Reminder: US Markets Live special edition, Bernanke presser

We’re starting at 2:10pm EST (7:10pm in London) at the usual place.

We were puzzled a few weeks ago as to why Charles Evans had changed his eponymous rule from 7/3 to 6.5/3.5. Turns out he might have just been aligning himself with what was coming.

Today the FOMC abandoned using a calendar date (most recently mid-2015) as its approximate guide to when it would begin raising rates. Instead:  Read more

FOMC statement, 12 December 2012

Expected changes, unexpectedly soon. Not just the widely anticipated announcement that the Fed would continue buying long-end Treasuries after the end of Twist, but also a switch from using a calendar date (previously set at mid-2015) to economic objectives for estimating approximately when the committee will raise rates in the future.

We’ve highlighted the important lines in the statement below, and we’ll have more coverage later: Read more

Defending the Romans

It’s Christmas. A time of year intrinsically linked to baby Jesus, a manger, some ancient wise men, choirs of angels and what is mostly an unflattering representation of the Roman Empire.

Roman PR has been faltering on other fronts as well, as this segment demonstrates… Read more

Goldman Sachs on natural disasters, climate change and Justin Bieber (really)

This is the most awesome chart we’ve seen since Lisa’s Starbucks tax graphic: Goldman Sachs comparing the attention given to climate change, the eurozone crisis, and Justin Bieber. Read more

Markets Live: Wednesday, 12th December, 2012

Live markets commentary from 

Don’t call it a boondoggle

Greece paid up to 40 cents in the euro for one of the bond in its buyback. Average price: 33.8 cents in the euro.

Or rather wants to pay. It has “advised… official creditors” that it wants another €1.29bn in EFSF notes to purchase all of the bonds tendered, up from the original €10bn.

The results, in table form via this release (click to enlarge): Read more

The (early) Lunch Wrap

North Korea launches missile || Libor probe continues || Mexican president pushes for energy reform || US chief execs urge for higher tax rates || US Department of Justice challenges Stagecoach bus market || British Airways faces stronger competition || Sweden to join Britain outside Europe’s banking union || Saudi Arabia cuts oil output to lowest level for a year || Apple tests designs for TV || Rosneft finalizes deal to buy TNK-BP stake from AAR Read more

Media said, Starbucks said

In our previous post, we outlined how Starbuck’s UK subsidiary would still have been loss-making last year if two of the three tax beneficial strategies mentioned in the press were reversed. This does not, however, get to one of the biggest sticking points of the story for a lot of people. Namely that the company has made statements that allude to its UK business actually being attractiveRead more

Tackling the two-headed monster of efficient markets theory and the principal-agent problem

Being a traditional investor sucks, doesn’t it? You give your money to a fund manager, they charge fees and half the time don’t even outperform benchmark indexes.

Being a traditional equity fund manager sucks too. Investors give you their money, expecting you to find a stack of alpha — but at the same time they’re insisting your portfolio allocations don’t deviate TOO much from benchmarks, and getting antsy if your returns fall below trend. Read more

Mark Carney raises NGDP expectations

BoE governor-to-be Mark Carney made a speech titled ‘Guidance’ last night. It was all about communications strategies, for both companies and central banks — a very interesting topic for students of monetary Jedi tactics.

Carney stressed at the beginning that his talk would be about guidance, and not containing guidance. Tee hee! However, he did drop the N-bomb and when a central bank governor talks in positive terms about a non-mainstream monetary policy framework, it’s… interestingRead more

Further reading

Elsewhere on Wednesday,

– Too much liquidity! Too little liquidity!

– Sometimes Yves Smith is not cynical enough.

Europe 2013, a lot like Europe 2012. Read more

The 6am Cut London

Asian stocks rise || North Korea launches missile || Japan machinery orders rise || Greek bond buyback done || Carney talks NGDP || The worldwide central banker connection Read more