Posts from Tuesday Feb 12 2013

The Closer

ROUND-UP

Markets round-up: “Global stocks inched higher amid a batch of corporate earnings as investors awaited President Barack Obama’s State of the Union address for clues on the outlook for the world’s largest economy. The FTSE All World gained 0.5 per cent, while on Wall Street, the S&P 500 Index rose 0.2 per cent to 1,519. The broad US benchmark reached its highest level since November 2007 last week. A sharp fall for the Swiss franc versus the euro – after Swiss National Bank boss Thomas Jordan said he expected the Swissie to lose more ground versus the single currency – triggered strength in the eurozone’s currency unit, which rose 0.4 per cent to $1.3453.” (Financial TimesRead more

The domestic-law genie

If there is anything that qualifies as protesting too much, surely this is it…

The finance minister of eurozone country X declares (as Vassos Shiarly of Cyprus did on Monday) that its bonds/its banks’ bonds/their depositors simply cannot be written down. Why? Eurozone country X’s constitution and laws just don’t allow it!

Well, on the contrary. Read more

What chance a direct shot from the ECB?

Little or none seems to be the answer…

I wrote on Monday about the ECB’s options for expanding its balance sheet but skimmed over the idea of direct FX intervention on the presumption it just wasn’t going to happen and the ECB would push via less obvious channels. As I was (justifiably) rebuked, the aim here is to make quick amends. Read more

It’s hard to know what to misinterpret anymore [Updated]

First we had this rather bland statement from the G7 — “domestic objectives” etc — and now this:

12-Feb-2013 13:56 G7 OFFICIAL SAYS G7 IS CONCERNED ABOUT UNILATERAL GUIDANCE ON THE YEN, JAPAN WILL BE IN SPOTLIGHT AT G20 MEETING IN MOSCOW

12-Feb-2013 13:56 – G7 OFFICIAL SAYS G7 STATEMENT WAS MISINTERPRETED, STATEMENT SIGNALED CONCERN ABOUT EXCESS MOVES IN JAPANESE YEN

 Read more

This is not 1994

Dario Perkins at Lombard Street Research has a great little note out on Tuesday arguing why it’s absolutely wrong to assume the current bond sell-off is in any shape or form a repeat of 1994.

As he notes (our emphasis): Read more

Spot the dodger

As part of its worthy attempt to herd the tax authorities of the world towards some form of global coordination on the taxation of multinational companies, the OECD offers us some examples of tax planning structures currently in use.

Skip to page 73 of this document. Can you guess who might be using an “E-commerce structure using a two-tiered structure and transfer of intangibles under a cost-contribution arrangement“? Read more

A physical vs forward commodity market disconnect

A strange thing is happening in commodity markets.

As we already commented on Twitter, what the physical supply and demand situation is telling us is getting increasingly disconnected from what the forward and futures markets are saying.

The curve, in short, is feeling mispriced. Read more

Markets Live: Tuesday, 12th February, 2013

Live markets commentary from FT.com 

Big shifts ahead in Chinese energy consumption

China’s energy consumption is legendary (okay, its everything consumption is legendary). More coal, oil, hydro, solar, and wind power than… than just about anyone. The coal numbers in particular are mind-boggling. By 2011 China was consuming almost as much coal (3.8bn tonnes) as the rest of the world combined (4.3bn tonnes).

The figures on oil consumption are almost as striking. They consume about 10m barrels a day; more than 10 per cent of world production. Read more

The (early) Lunch Wrap

North Korea confirms nuclear test || Vice-chair of Fed urges focus on jobs || US Treasury comment triggers fall in yen || Finmeccanica head arrested over bribery allegations || Pay-by-tweet service launched on Twitter || Companies hit by Venezuela move || UK accounting body probes Autonomy || Nasdaq held buyout talks with Carlyle || Markets update: Bulls struggle to inject fresh impetus into the rally Read more

A promise not to go to war

G7 statement just out on Tuesday: Read more

Rio and the $115bn capital return

Sam Walsh, the new Australian boss of Rio Tinto has probably never heard of Tony Pidgley, the chairman of upmarket UK housebuilder Berkeley Homes.

Which is a pity because Pidgley, adopted from Barnardo’s at the age of four by travellers, could give him some tips on how to run a cyclical business and maximise returns to shareholders. (Something, of course, his predecessor conspicuously failed to do). Read more

Further reading

Elsewhere on Tuesday,

- The brilliance and the horror of rogue spreadsheets.

- Concerning collateral.

- Why fiscal devaluation is a bad idea.  Read more

Go-To Barc (updated with slides)

We shouldn’t scoff. Barclays’ newish man Antony Jenkins has rolled out fullish details of the much-previewed strategic review. Click here for more:

 Read more

The 6am Cut London

North Korean nuclear test suspected after earthquake || Currency wars anticipation heightened ahead of G20 || Yen falls, Nikkei soars || Autonomy accounts to be investigated || Barclays’ big day || EDF wants state backing for UK reactors || Nasdaq and Carlyle held ill-fated talks || Currency wars or just monetary policy? Read more