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The market vogue is to obsess about how the Fed is suppressing long-term rates.
But for years now, FT Alphaville has been trying to explain why, in reality, Fed intervention is as much focused on propping up short-term rates (preventing them from falling through zero) as it is about keeping longer-term rate expectations anchored. Read more
Some are betting that Beijing will eventually endorse Bitcoin. This week Lightspeed Venture Partners of San Francisco and a China-based sister fund announced a $5m investment in BTCChina…
— Financial Times, November 22
Courtesy of the Bundesbank (h/t Dario Perkins):
In a nutshell, the paper concludes that current account adjustment is significantly hampered in countries that are members of a monetary union. This holds particularly in comparison with floating exchange rate regimes owing to the lower level of exchange rate flexibility. Furthermore, the persistence of current account balances in member countries of a monetary union is also more pronounced than in fixed-rate regimes due to less flexible interest rates as a result of the single monetary policy.
Live markets commentary from FT.com
Beijing has banned banks from Bitcoin transactions || Australia’s Qantas Airways on Thursday forecast steep first-half losses while announcing a further 1,000 job cuts and possible asset sales || German drugs and chemicals group Merck acquires Apple supplier AZ Electronic Materials || Siemens announced a plan for higher profits at its infrastructure unit at an analyst day on Thursday || BNP will buy Bank Gospodarki Zywnosciowej from Dutch lender Rabobank to boost its presence in Poland || A suicide bomber has attacked Yemen’s defense ministry || Markets update Read more
A friend of FT Alphaville who works in the real world, far from finance, asked us what we think about putting money with peer-to-peer lenders.
We advised him to buy gold-bitcoins instead, but it made us want to take a look. It turns out we’re not alone. The chancellor is expected on Thursday to launch a consultation on blessing peer-to-peer lending with inclusion in the UK’s popular ISA scheme for tax free savings accounts.*
But where we think we might be alone, for now, is worrying about something that has afflicted lenders from time immemorial: run risk. Read more
Markets: Equity markets are weaker across the Asia-Pacific region. Investors are cautious ahead of interest rate decisions in the eurozone and the UK on Thursday plus a highly-anticipated monthly US jobs report on Friday. The broad losses follow a 0.1 per cent pullback in the S&P 500, after a strong private payrolls survey increased speculation that the Federal Reserve could soon trim back, or “taper”, its stimulus measures known as quantitative easing. (Financial Times) Read more