Posts from Thursday Jun 13 2013

The Closer


– The post that moved the market? The WSJ’s Hilsenrath on the Fed “trying to convince investors not to overreact when the central bank starts pulling back”. Read more

Widowmaker of all widowmakers?

It’s probably too early to say concretely that the great yen short of Abenomics has turned into the widowmaker of all widowmakers.

But evidence in favour of such a suggestion is certainly mounting by the day.

We present some examples from the commentary space… Read more

The march of the real yields (and the EM, commodity connection)

Business Insider suggested the ascent of US real yields was possibly the most important development in the market right now. We don’t disagree.

As we noted, it represents the market’s reconnection with disinflationary reality. The smoke and mirrors are fading. What is worrying, however, is that a move of this size has been prompted by simple talk of tapering. If that’s what tapering does, what will the first hint of a proper QE exit inspire?

As a result, it’s unlikely that an outright QE exit is viable at this stage. The deflationary consequences (which include the chances of a major market-sell off) would arguably be too large. Given that let’s analyse what the move in real yields really signifies. Read more

Markets Live: Thursday, 13th June, 2013

Live markets commentary from 

The (early) lunch wrap

RBS shares tumble as Hester heads for exit || Record crops to push grain prices lower || Prada slides on slower quarterly profit growth || WTI falls as World Bank cuts outlook || Yen’s rise through Y95 hits Japanese shares hard || The EU abandons data-privacy safeguards Read more

Just how bad is the EM sell-off?

By now, everyone knows Tuesday was a big day for the EM bond market. But has the market really taken stock of how ‘bad’ things are?

Bloomberg reports on Thursday that this is probably the biggest drop in creditworthiness for emerging-market borrowers since the credit crisis started. Worse still, it is deepening. This they say is because speculation is intensifying (no-doubt among the buy-side) that central banks will scale back record stimulus**. Read more

Doubling down on the Nikkei

Nope not in that direction:

Up towards 18,000 in fact from it’s current bear-wrought 12,500 or so. That’s Nomura’s bet at least and good luck to them. A taste: Read more

Fiscalists vs market monetarists, a bloggy taxonomy

Fiscalists vs market monetarists is a breakout skirmish between rivalrous, unnatural allies whose common antagonists are in retreat.

But on the post-crisis intellectual battlefield, they have mostly been on the same side — or at least stayed out of each other’s way. Read more

Further reading

Elsewhere on Thursday,

– Boy, is there ever no wage inflation in this economy.

Age proofing our streets.

– Could deflation be salvation?

– The currency carry trade and DBV. Read more

The London 6am Cut


“The Purest Political Economist of Them All: Albert Hirschman’s Legacy”, by Dan Drezner. Read more

Nikkei, rot to rout

Slightly wearying, all this see-sawing in Japan. The Nikkei fell more than 6 per cent at one point on Thursday, though it had rallied a bit at pixel time. Still heading towards bear territory.

Some Nikkei investors spotted leaving the scene on Wednesday: Read more