Posts from Monday Dec 9 2013

The Closer


– Three big chances for trade liberalisation next year. Read more

FT Alphaville is hiring — in NYC

We are looking for a natural writer, with an interest in all things financial, to join the FTAV team in New York.

Enthusiasm for online journalism and/or blogging is essential – as is an ability to get up in the morning. (We start early.) Read more

Two and twenty is long dead and buried

Glance at a Citi Prime Finance report that fees are starting to crumble, and a casual reader might conclude that something is wrong in the house of hedge funds. Perhaps investors have begun to notice well documented problems with performance?

Pressure to offer founders’ share classes or accept seed capital to launch with sufficient amounts of Assets Under Management have pressured management fees down from the industry’s standard benchmark of 2.0%. Our analysis shows average fees for managers with less than $1.0 billion AUM ranging from 1.58% to 1.63%.

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China, where family planning can mean candles, 30 official stamps and 50 approval letters

From Credit Suisse, do breathe in the romance:

The impact of the easing of the one child policy on birth rates may be overstated based on the experience of easing restrictions on parents who are both single children in their families (as shown in Exhibit 3). Guangzhou, a southern China city, had more than 14,000 couples, who were both single children in their families, hence eligible to have the second child, but only 360 couples had the second child in 2009.

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Markets Live: Monday, 9th December, 2013

Live markets commentary from 

Zombies are the wrong kind of mean

The generally excellent Spencer Jakab leaves his zombie repellent behind on Monday, when he speculates in the Wall Street Journal that the formerly decent returns of the hedge fund industry will return once central banks begin to retreat from markets.

The problem is mean reversion. It may be one of the most powerful forces in the investment universe but, as we have said before, it doesn’t apply when you try to compare the zombies of the 1990s and early 2000s to the lumbering, fee eating, industry as it exists today. Read more

The (early) Lunch Wrap

Venezuela poll cements ruling of Hugo Chávez successor || Japanese Q3 growth revised down || Chinese inflation slowed in November due mainly to a drop in food prices || HSBC sounds out spin-off of UK unit || Kazakhmys sells $1.3bn power station stake || India markets hit new high after state elections || Markets Read more

Further reading

Elsewhere on Monday,

– Capitalism is about to seize defeat from the jaws of victory all by its own hand.

Gordon versus the androids.

– Econ as incredulity.

– Econ as the study of abundanceRead more

The road to liberalisation is paved with certificates of deposit

Starting today we get what is basically the first formal step to a fully fledged market based deposit rate system from China (honourable mention of course to those more informal weapons of mass ponzi). It’s been coming and the move doesn’t effect corporates or individuals, but in the context of the Shibor spike, deposit pressure and the post-plenum reform blush it’s very worth noting.

From UBS’s Wang Tao:

[The PBOC] took the long-expected step toward liberalizing deposit rate on December 8, announcing that effective from December 9, depository financial institutions (banks) are allowed to issue large-denomination negotiable certificates of deposit, i.e., the so-called interbank CDs.

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The 6am London Cut

Markets: Markets across the Asia Pacific region are mixed as investors weigh a series of data releases against the implications of a stellar US jobs report­. In Japan, Friday’s news that the US economy added 203,000 jobs in November outweighed disappointing gross domestic product revisions. Tokyo’s Nikkei 225 index is up 1.9 per cent, on pace for its best session in more than two weeks. (Financial TimesRead more