Posts from Tuesday Jun 18 2013

The Closer


– The (happily?) dull state of econoblogging. Read more

Finland has a collateral credibility issue

So, a plurality of the Finnish public may just agree with FT Alphaville.

Click to enlarge. That’s a Gallup poll by Helsingin Sanomat on the Finnish government’s Greek ‘collateral’. Read more

Tax needn’t be taxing. It can also be a Hungarian debt wheeze

What to make of the 7 per cent levy which Hungary is imposing on bank holdings of local government debt?

This is debt that is being assumed by the central government. So, it was curious to see the government insist on Tuesday that its $219m tax collection isn’t a hidden write-down. (We should in any case preface this post by noting that Hungarian bonds have been bullet-proof lately.) Read more

The central bank (communications) bubble

Kuroding yields and a Nikkei rout have put Abenomics on the back foot.

Goldman strategists Naohiko Baba, Chiwoong Lee and Yuriko Tanaka’s considered opinion is that Haruhiko Kuroda is just, well, bad at central banker speak.

They think the loss of “any positive market reaction” to Japan’s unprecedented easing has “largely been undone”, and lay the blame mostly at the Bank of Japan chief’s feet for his communications strategy, or lack thereof. Read more

“Companies should know who really owns them…”

There are 13 ‘shoulds’ in the Lough Erne Declaration which has come out of the G8 summit:

1. Tax authorities across the world should automatically share information to fight the scourge of tax evasion.

2. Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.

3. Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.

 Read more

The end of the end of the end of the commodities supercycle is nigh, in Asia

That’s from Deutsche Bank today.


We joke, we joke. A little. Deutsche had of course already joined the commodities-supercycle-is-dead chorus, and this note is not from the commodities side but by Asia chief economists Taimur Baig and Jun Ma. Read more

Markets Live: Tuesday, 18th June, 2013

Live markets commentary from 

The (early) Lunch Wrap

G8 leaders seek common ground on tax || UK readies Libor charges || Obama hints at move for Bernanke || European car sales fall to lowest level since 1993 || Third Point’s Dan Loeb steps up pressure on Sony || EasyJet agrees to buy 135 new planes from Airbus || ‘Big three’ container shipping groups plan alliance || Co-op Bank plans novel bail-in: Read more

When liquidity meets control in China [updated with credit crunch probability]

The Shibor spike continues, this time with the Wall Street Journal:

The Chinese interbank funding market has seen rates soar since early this month amid slowing foreign-capital inflows and banks’ needs to fulfill investor obligations, among other factors. The squeeze is pushing up banks’ funding costs and could impede a key source of funds for growth even as the economy slows.

Originally, there were suggestions that the increase in China’s interbank interest rates was down to the Dragon Boat Festival holiday season and a resultant search for cash. But rates have stayed elevated as rumoured defaults and auction failures got everyone nervous and liquidity pressures mounted as foreign-capital inflows slowed and those dang wealth-management products demanded feeding. Read more

Further reading

Elsewhere on Tuesday,

– The search for Atari’s shame.

New warning signs in China.

– The interest rate effects of government debt maturityRead more

The London 6am Cut


– The rise in US 10-year treasury yields is not just about the Fed.

– Malcolm Gladwell on Albert O Hirschman and the power of failure.

Abenomics, Japan’s debt, and privatisation. Read more