Posts from Friday Feb 7 2014

The gamification of the economy: creating rivalry where there is none

Humanity has always been used to competing over scarce resources.

Over the years we’ve become better at it: more adept at making the most of the resources we have at our disposal and better at seizing the resources we need by force. i.e. cleverer.

And so it is we find ourselves perfectly equipped for a life of competition. Genetically hard-wired for it, if you will.

The problem is we can’t really improve on the way we club each other to death anymore. Muscle reached its peak with the invention of nuclear weapons. The ironic consequence of that was a peace-inducing stalemate. Wars over resources still happen, of course. But very rarely on equal footing. Meaning for the most part the enemy of the highest power doesn’t stand a chance. Read more

January payrolls: +113k, jobless rate 6.6%

What jittery times we live in. It was only a month ago that a bright-eyed and bushy-bearded blogger was (cautiously) citing numerous reasons for optimism about the US economy in 2014.

That was just before the thud of the December employment situation report, which was then followed by an unrelenting succession of disappointing economic indicators, not to mention the emerging-market selloff. Read more

Russia must use Olympics to shrug off contagion talk

On the eve of the Sochi opening ceremony, FT Alphaville is pleased to present this guest post by Jorge Mariscal, emerging markets chief investment officer at UBS Wealth Management…

As it hosts this month’s Winter Olympics in Sochi, Russia will spend more time entertaining the world than educating it about the Russian economy. But financial market conditions mean it must also use the Games as a platform to prove some serious economic points.

This year, a tidal wave of capital outflows has engulfed emerging market currencies. Although Russia is stronger than the average developing nation, its currency and stock market have underperformed emerging market averages, with declines of 7.3 per cent and 11.6 per cent in US dollar terms, respectively. Against this backdrop, Russia needs to use the Games as a platform to advertise its resilience and competitiveness to investors. Otherwise, contagion from weaker countries risks sweeping it up. Read more

The OMT — um, what does this thing do again? A Bundesverfassungsgericht guide

Arguably, none of the below matters now.

That’s the prime effect of the German constitutional court turning to the European Court of Justice for a ruling on whether the ECB’s sovereign bond-buying programme is a “structurally significant transgression of powers” under European treaty law.

Big words. But the backing of the Bundesverfassungsgericht judges (pictured right) for that view gets rendered into just another opinion, pending the ECJ’s decision. And the arc of the ECJ’s justice is long, turgidly written, but ultimately quite friendly to pieces of bailout architecture that have an odd relationship to the treaties — as in past musings on the ESM.

But the really interesting thing is that regardless, the OMT’s purpose apparently remains almost completely lost on the court. Read more

Markets Live: Friday, 7th February, 2014

Live markets commentary from 

The (early) Lunch Wrap

German court refers ECB bond-buying programme to ECJ || Apple spends $14bn on buybacks after share slump || SAS to raise $600m through shares and convertible bonds || UK trade deficit narrows sharply || Statoil pledges to curb spending plans || LinkedIn disappoints with subdued outlook || Bitcoin falls as major exchange MT.Gox halts withdrawals || Markets Read more

Hot potato passed, bailout legality edition


KARLSRUHE, Germany (Reuters) – Germany’s Constitutional Court said on Friday it had decided to refer a complaint against the European Central Bank’s (ECB) “unlimited” bond-buying program to the European Court. Read more

Friday Banks chart, Sweden is the next Australia

Picture a kangaroo in a sauna, its pouch stuffed with cash. The Aussie banks are where you go for bank dividends, paying out practically all their earnings in durable swimable plastic cash.

But Citi would like to draw your attention North: Read more

Further reading

Elsewhere on Friday,

- Why bitcoin won’t disrupt digital transactions.

- Learning to spin in China.

- Why Sochi cost so much (vid). Read more

A lesson from Japan’s falling real wages

Here’s an observation from Capital Economics in response to this week’s news about Japanese wages that hasn’t been much discussed:

The threat to the economic recovery from falling real wages may not be as big as many fear, given the trade-off between higher pay or more job creation. Nonetheless, consumers are understandably far from happy about the return of price inflation.

 Read more

The 6am London Cut

Markets: Thursday’s robust session on Wall Street has lifted Japanese equities as well as emerging Asian and Hong Kong stocks. (FastFT) (BloombergRead more