Posts from Wednesday Jun 5 2013

Ignored Many Flaws — the report

Click for the IMF’s “ex post evaluation” of its role in the Greek bailout. Its mea culpa.

And if you thought we were being harsh here, parts of the real thing are excoriating.

This is even though the report decides Greece’s exceptional access to IMF lending was justified (generally), and it still says much fiscal adjustment could not be avoided. Policies were “broadly correct”. But it does strongly suggest that debt restructuring should have come sooner.

Excerpts follow…

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The Closer


– John Jeremiah Sullivan on the publication of Cotton Tenants.

– Early bird specials and US growth.

– Some good ideas on infrastructure and profit repatriation from Larry Summers.

– The mystery of why Portugal is so doomed. Read more

What have inventories got to do with QE?

It’s been our mantra at FT Alphaville for a while, but finally someone from the ‘serious’ analyst space seems to agree with our hypothesis that commodity collateralisation — incentivised by low rates and excess liquidity — is having a larger impact on inventories and commodity prices than most people appreciate.

Here’s an extract from one of oil market veteran Philip K. Verleger’s recent articles on the relationship between interest rates and inventories (our emphasis): Read more

The rise of the real collateral ‘mining’ business

FT Alphaville was cordially invited to talk about the collateralisation of commodities at two separate conferences this past month. We thank IHS Global and the Association des Economiste Quebcois for the opportunity.

The crux of our argument was that you can’t really understand what’s going on in commodity markets unless you appreciate that commodities are no longer a pure consumption-based market. Read more

Ignored Many Flaws

So, the International Monetary Fund (effectively) wishes to apologise to all concerned for that little thing where it turned into Dominique Strauss-Kahn’s presidential election campaign a few years back.

Sorry if a country got broken along the way: Read more

A Greek bond raid — more details

Just when we thought we’d dreamed Monday’s news of this.

The mysterious folks at Japonica Partners have come out with their full “tender offer” to buy up almost 10 per cent (€2.9bn) of Greece’s restructured bonds: Read more

For London property prices, blame Blair

Ok, this is from Perels, a consultancy, and it concerns UK property prices across the board, not just London. Click to enlarge…

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Donovan: Same sex marriage boosts the economy

In this guest post, UBS global economist Paul Donovan argues that ending gender discrimination benefits us all…

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Game of negative rates

From Morgan Stanley’s combined banks/economics/credit/rates research team on Tuesday:

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This is what a broken arrow might look like

(With Macro man getting the credit for the pic on the right) Read more

Markets Live: Wednesday, 5th June, 2013

Live markets commentary from 

The (early) Lunch Wrap

Abe unveils ‘third arrow’ reforms and Nikkei slumps again || China takes tit-for-tat move against EU wine exports || Apple could face a US import ban on certain iPhone and iPad models || Brazil got rid of its tax on foreign investment in domestic bonds || Australian growth disappointed in the first quarter || Japanese hedge funds have ploughed into the country’s small-cap stocks || More signs of ECB wariness ahead of Thursday’s meeting || Tesco recovery stalls as sales fall || JPMorgan and Morgan Stanley are designing new synthetic CDOs || JPMorgan’s Alabama debacle set to cost bank $1.5bn || HSBC has been landed with a civil lawsuit from the state of New York || MF Global is effectively out of bankruptcy || IKEA founder steps aside || Markets wrap || FTAV’s latest Read more

Garthwaite: ‘Just buy stocks’

Worried about the Fed’s taper tactics? Maybe Abe’s poisoned third arrow?

Andrew Garthwaite’s not. The Credit Suisse equity strategist has just hiked his S&P 500 forecast to 1,730 (from 1,640). For 2014 he’s going for 1900. Yes, Garthwaite sees another 15 per cent… Read more

On crossing the ECB interest-rate streams

If the ECB were to introduce negative rates, FT Alphaville has mostly focused on the idea that the it would do so primarily in its deposit rate. That’s where market chatter has largely concentrated.

But as someone wiser than us noted in an emailed comment, that would be almost entirely redundant. Read more

Further reading

Elsewhere on Wednesday,

– Entering the Vortex.

– The market discovers the true Wizard of Abe.

– A thought-powered helicopterRead more

The 6am Cut London

Asian stocks meandered. The Nikkei turned negative after Shinzo Abe’s latest reform announcement, dropping as much as 1.3 per cent after the Japanese prime minister’s speech. Australian shares dropped 1.4 per cent, hitting a four-month low on weak growth. (Reuters)

Apple could face a US import ban on certain iPhone and iPad models after a trade panel said they infringed Samsung patents. AT&T variants of the iPhone 4, 3GS and 3G, as well as the original iPad and iPad 2 could be affected by the ruling of the International Trade Commission, which said its decision was final. Apple may still appeal what would otherwise be a significant victory for Samsung in its legal disputes with the company. (Financial Times, ReutersRead more