FURTHER FURTHER READING
© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Pershing Square has launched a new line of attack on Herbalife with a study of Shawn Dahl, until last year one of the top businessmen in the California based multi-level nutritional shake marketing scheme.
We won’t comment either way on Pershing’s allegations — Mr Dahl and the company he represented, Online Business Systems, have never taken up our invitations to discuss their operations, and any allegations should be treated as such. Instead, let’s have a quick look at the idea of whether it is possible to have a bad apple within an otherwise kosher marketing scheme. Read more
It may be something in the wind, but is it becoming acceptable for companies to spend again?
Exhibit A: Morgan Stanley politely suggests that, even though companies which actually increase investment in their business with capital expenditure have tended to trail the scrimpers, it might be time to look at the capital intensive types again. Read more
I hesitate – to say the least – to critique the central argument in French economist’s Thomas Piketty’s new book Capital in the 21st Century. The author, an inequality expert, is distinguished. The work is acclaimed. The book’s empirical detail is already the stuff of legend. And, most damningly, I have not read the text and do not expect to until it is released in English, sometime in March. Read more
Citi’s research team highlights the important point that Germany’s Bundesbank has signalled that it is open to an end to ECB sterilisation operations.
The move follows consecutive failures by the ECB to sterilise its bond purchases in the last month.
As the Citi analysts note, the failures potentially indicate funding pressures in the Eurozone, following the removal of a lot of excess liquidity from the system:
with the ECB failing to attract sufficient bids for its liquidity absorbing 7-day fixed-term deposit, sterilisation is not functioning as well as intended, with investors preferring to keep hold of some funds as the excess liquidity position dwindles. We suspect that the ECB could soon announce that it will suspend sterilisation at least until July 2015, during which period the ECB has committed to full allocation fixed rates for the 7-day MRO. Alternatively, the Governing Council could decide to lower/abolish minimum reserve requirements (last change from 2% to 1% in Dec-11) in order to tackle the recent increase in overnight interest rates that runs counter to its very accommodative monetary policy stance.
Live markets commentary from FT.com
Lloyds £10bn PPI bill || Denmark reshuffles, again || Ryanair losses || Smith & Nephew buys ArthroCare || Julius Baer to cut costs || Sandvik profit slumps || Eithad to decide on Alitalia this month || Stocks flirt with lows Read more
A sanguine note on China’s shadow banks from JPMorgan’s Flows & Liquidity team to cheer those spooked by Credit Equals Gold No. 1….
How big is the Chinese shadow banking system relative to other countries?
Markets: “Markets flicked the switch back to “risk off” after data released over the weekend showed further weakness in China, pushing Japanese equities to a two and a half month low. The Japanese stock market, which surged 57 per cent in 2013 on the back of the weak yen that defined the first phase of the country’s Abenomics growth policies, is now the world’s worst performing mainstream market in the year to date.” (FT’s Global Markets Overview) Read more