Posts from Thursday Jun 6 2013

The Closer

FURTHER FURTHER READING

- How much blame does Mervyn King deserve?

- Testing Abenomics.

- Has the US deficit monster been defeated? Read more

The refi boom is over

It was only a matter of time before the mortgage refinancing wave receded.

As we noted last October, the limited pool of eligible borrowers meant that refinancing activity was already limited in how much it could increase. Read more

Canada’s grizzly outlook

Oh, Canada.

Home of oil sands, maple syrup, ice hockey, singing astronauts, William Shatner, the Bank of England’s governor-to-be and (rather poignantly) a lot of bears… Read more

Tokyo breaks (yes, again)

A fresh rout in Japanese equities was signalled on Thursday, with the Nikkei 225 June future touching 12,600 at pixel on the CME. That’s 300 points or so below the official close in Tokyo earlier and about 3,300 points below the high on the June contract seen last month.

(UPDATE: This is proper carnage again. Nikkie June future at 12300, down 600 points post-pixel) Read more

ZAargh!

The Aussie dollar is looking more like the South Pacific peso at the moment, but Australia is not alone in fending off the commodity currency backlash.

South Africa’s market is under similar pressure, and South African Reserve Bank governor Gill Marcus is not having a good time of it when it comes to guiding the markets out of the turmoil. Read more

ECB is technically ready for negative rates

The Great Draghini has spoken on negative rates, collateral and on volatility:

DRAGHI – HAD AMPLE DISCUSSION OF NONSTANDARD MEASURES
DRAGHI – DISCUSSED NEGATIVE DEPOSIT FACILITY
DRAGHI – TECHNICALLY READY FOR NEGATIVE DEPOSIT RATES, BUT NO REASON TO ACT RIGHT NOW

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Markets Live: Thursday, 6th June, 2013

Live markets commentary from FT.com 

The (early) Lunch Wrap

ECB and Draghi day || France is threatening to upstage talks on the EU-US trade pact || The ESM will likely have a €50bn-€70bn limit on direct investments in banks || London should hand Libor supervision to EU, says Brussels || Pro-austerity Finland falls into triple-dip recession || Gabon seeks to reclaim Chinese oil assets || IMF admits to errors in international bailout of Greece || NSA collecting Verizon customer data, Guardian says || FBI and Microsoft take down botnet criminal network || SAC Capital told employees it expects to stay open following a wave of client redemptions || Finra in the US has increased its scrutiny of dark pools || Markets roundup || FTAV’s latest Read more

US inequality, and digging into aggregate data

We couldn’t manage to squeeze these charts from Edward Wolff’s paper into our earlier already-novel-length post about monetary policy and US inequality (click to enlarge each). Read more

Monetary policy and US inequality, again

And the annual report from the St Louis Fed found that 62 per cent of the wealth recovery through the end of last year has been the result of rising stock markets — and stock ownership is concentrated among richer households.

Economix has a very good summary, and we also recommend last year’s paper by Edward Wolff, in which you’ll find this chart (click to enlarge): Read more

Further reading

Elsewhere on Thursday,

- Has BIS found the solution to too big to fail?

- How I learned to stop worrying and love the bond.

- The semantics of monetary policyRead more

The 6am Cut London

Asian shares fell back towards their 2013 lows. The MSCI Asia Pacific index fell 0.7 per cent, towards its level in January. Japan’s Nikkei swung to a loss from a 1.7 per cent increase earlier, and the Topix fell more than 1 per cent, down 15 per cent from the five-year high it set in May. (Bloomberg)

The ESM will likely have a €50bn-€70bn limit on direct investments in banks. The condition on the bailout fund’s draft direct recapitalisation tool was outlined in a policy paper following six months of talks on breaking the “vicious circle” between sovereigns and banks. The limit to recapitalisation funds reflects the higher provisions on this kind of investment compared to the ESM’s more normal practice of lending to governments. (ReutersRead more

The Aussie dollar – from south pacific peso to southern Swiss franc and back again

The pain goes on for the currency dubbed until recently the southern Swiss Franc

 Read more