Posts from Wednesday Jul 24 2013

The Closer


– No to Summers, part oneRead more

Caption this — the Bank’s Mr Darcy edition

That’s Bank of England Governor Mark Carney, announcing on Wednesday that Jane Austen will adorn the new ₤10 note. Read more

Vince Cable and the Taliban

From the FT on Wednesday:

Vince Cable, business secretary, has lifted the lid on tensions between the government and the Bank of England criticising its “capital Taliban” whom he accuses of holding back the recovery by imposing excessive financial burdens on the banks.

He’s angry that the Bank (well, the “jihadist” element, at least) are holding “back small business lending by demanding banks hold onerous levels of capital as a cushion against further shocks.”

We may have to take this blog into list format… Read more

Markets Live: Wednesday, 24th July, 2013

Live markets commentary from 

The (early) Lunch Wrap

US plans criminal charges against SAC Capital || China bans construction of government buildings for five years || Detroit fight begins in a federal court on Wednesday morning || iPhone sales boost Apple shares || Vince Cable has criticised the Bank of England’s “capital Taliban” for holding back a recovery || Japan’s exports rose for a fourth straight month in June || A former HSBC banker has emerged as the leading external candidate for RBS chief executive || GlaxoSmithKline is considering cutting prescription-linked commissions || Huawei Technologies sales rose 11% in the first half || Big US banks are warning that new funding rules risk damaging the $7tn repo market || Ford Motor is to develop its hybrid drive technology for light trucks independently of Japan’s Toyota || Markets wrap || FTAV’s latest Read more

Sorry, commodities are a poor diversification tool

An interesting paper has just landed on the BIS working paper site, in which the myth that commodities provide a solid diversification tool for investment portfolios has been beautifully debunked.

The grounds for this are mostly due to too much correlation, and volatility. Read more

Further reading

Elsewhere on Wednesday,

– Can Chinese policymakers can keep their nerve?

– Commodities are a poor portfolio diversification tool.

– Africa to own the world’s demographic futureRead more

The 6am Cut London

Asian stocks lower || China flash PMIs disappoint || Cable criticises BOE || IMF backs off filing on Argentina case in US Supreme Court || Japan’s deficit lower in June || Former HSBC banker McCombe top external RBS candidate || SAC criminal charges reportedly planned Read more

The IMF won’t be Argentina’s pari passu frenemy. Why?

Did you hear the one about the IMF sending an amicus curiae brief to the highest court in the United States in favour of taking up the pari passu case of its infamous lost cause, Argentina?

Well here’s the punchline: US opposition has abruptly killed the plan. Read more

Flash PMIs, another China data disappointment

The China flash manufacturing PMI for July is 47.7, the lowest number in 11 months and a decent step down from June’s final figure of 48.2. It also was well short of consensus expectations that July would maintain the 48.2 level.

The employment sub-index was fell to 47.3 from 47.6 in June, its lowest since March 2009, and there’s very little to be upbeat about the breakdown — apart from diminishing inventories:

China flash PMI July 2013 HSBC Read more

SAC, oh dear

This was coming from the Wall Street Journal late on Tuesday:

Federal prosecutors are preparing to announce criminal charges as early as this week against SAC Capital Advisors LP, the hedge-fund company that has been the target of a multiyear investigation into alleged insider trading, according to people familiar with the matter…

 Read more

Why Yellen should be the next Fed chair

Larry Summers has his haters, and Tuesday’s report from Ezra Klein that Summers is now the frontrunner to replace Ben Bernanke as the next Fed chair has doubtless set them off.

On this particular issue, I’m not really one of them. Some of the mistakes of his past, such as his role in deregulating derivatives (the Brooksley Born episode) or the Harvard interest rate blowup, don’t really tell us much about his capacity to guide macroeconomic stabilisation policy. Read more