FT markets round-up: “Gold hogged the limelight as it tumbled to its lowest for more than two years, but sharp losses were also suffered by other metals and commodities, as well as equities, as disappointing Chinese economic data compounded concerns about the global economy. Gold fell more than $100, or 8 per cent, to as low as $1,350 an ounce as a sell-off that began on Friday accelerated rapidly. It managed to pull back to $1,364 late in the session. Silver fell nearly 10 per cent to $23.21 an ounce. Global equities continued to retreat from cyclical highs reached last week. The FTSE All-World index – which last week touched its best level since June 2008 – fell 1.7 per cent, while the S&P 500 closed 2.3 per cent lower – about 2.8 per cent off the record intraday peak struck last Thursday. The FTSE Eurofirst 300 index fell 0.6 per cent, as the mining sector had its worst day in 17 months.” (Financial Times) Read more
Fresh off the US Supreme Court’s order list on Monday:
If the meteoric rise and fall of the cyber crypto currency Bitcoin this month teaches us anything, it’s the degree to which a market can be influenced by internet hysteria, viral marketing and propaganda.
There is no intrinsic value to a Bitcoin. Read more
According to John Kemp at Reuters that puts us way past the six sigma mark at this point:
From Adam Posen, writing in the Cato Journal…
This article challenges the validity of the the assumption that monetary policymakers can correctly identify asset price bubbles in time to respond preemptively (or at least usefully). This is something where many policymakers even previously skeptical now feel they can be like Supreme Court Justice Potter Stewart and recognize obscenity in asset prices when they see it. Some patterns do emerge if we look more carefully at the historical record of asset price booms and busts, but, in light of those patterns, the prospect of getting the call right becomes very daunting. The difficulty arises because of the complex nature of asset price booms and busts, a complexity that seems to be overlooked in the advocacy of leaning against the wind.
I spoke on a panel with Allison Schrager of The Economist and Joe Weisenthal of Business Insider at last week’s Kauffman Economics Bloggers Forum. Below is a revised draft of my prepared notes, and many thanks to Brad DeLong for the invitation.
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FT Alphaville does like a good Senate Banking Hearing. Especially when they feature a political body slam on proper statistical methods. And so we are proud to announce this month’s Ultimate Statistics Fighter… [dramatic pause]… is Senator Elizabeth Warren!
Warren demonstrated her moves on Thursday during a hearing on Outsourcing Accountability? Examining the Role of Independent Consultants. (Don’t let the incredibly dull title of the hearing deter you. That would be a mistake. Don’t be that person.) Read more
Every strategist around, it seems, was expecting an increase in China’s growth rate after the recent credit surge. Of course… it didn’t happen.
Yet much of the reason for those expectations of credit tightening are still there: credit really surged, particularly in March. Read more
Gold is now officially in meltdown:
Live markets commentary from FT.com
China’s Q1 GDP growth was 7.7%, missing estimates || Gold, silver prices tumble || Global economy in a rut || Thermo Fisher nears $13bn Life Tech deal || Troika officials arrive in Lisbon today || Dovish Rosengren sees brighter outlook || Hopes of full payout for Lehman Europe creditors rise Read more
In March we noted that the US Treasury had issued a request for information on who is holding large positions in the 2023 US Treasury note, following reports that the issue was experiencing repo difficulties. Not only was the issue trading in negative territory in the repo markets, there were reports of significant fails.
As ever with repo markets, information was scarce. Given the risk-on sentiment at the time, this seemed strange. Read more
Elsewhere on Monday,
- The shallow appeal of the gold-standard era.
- Beyond banking.
- More people = higher house prices? Nope.
- Ten figure take home. Read more
Silver is off 6.4 per cent and gold is down 3.8 per cent, although the latter follows a steeper fall on Friday:
The biggest ASX fallers on Monday…
… all gold.
(yes, even PanAust)
Asian stock markets and most commodities fell after Chinese GDP and other economic data came in below economists’ estimates. The Nikkei and Hang Seng both fell 1.5% and the MSCI Asia Pacific Index was 1% lower. (Bloomberg)
China’s Q1 GDP growth was 7.7%, missing estimates. The country reported 7.7% year-on-year growth while median economist forecasts were for 8% according to a Reuters poll. Industrial production grew 9.5%, compared to 10% for the same period in 2012 and retail sales rose 12.4% in the quarter, 1.9 percentage points lower than last year. (Financial Times)(Reuters) Read more