FURTHER FURTHER READING
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US and Russia to hold talks as markets rally || Russia spends $11bn supporting rouble || Beijing signals growth concerns || Mark Carney signals start of reviews on bank bonuses || Standard Chartered suffers first profits fall in a decade || Solar cell maker heads for first corporate bond default in China || Japan looks to Bitcoin tax || Spanish yield at 8-year low || Markets Read more
Depends on how confident you are that the market and economists can predict Putin’s next move, we suppose. Read more
Nine days in and it’s still falling…
Some analysts had thought Beijing was ready to let the renminbi stabilise, but a sharp sell-off on Friday – at one point it declined 0.9 per cent, its biggest daily fall since the new currency system was introduced in 2005 – showed that the central bank was still determined to push it further.
“We’re still seeing PBoC intervention”, said a trader with a bank in Beijing. “This is beyond our expectations.”
How exactly do you sell a fridge retailer at ~100 times EBITDA? Click below to find out.
Changes to search engines’ algorithms or terms of services could cause the Group’s websites to be excluded from or ranked lower in natural search results. If the Group is unable to recognise and adapt quickly to such changes, the Group could suffer a significant decrease in traffic to its websites and, in turn, conversion rates and revenue. Read more
Finally. FINALLY. They’re here, and we’ll be back later with excerpts and analysis.
The deal is a big win for Simple’s founders and investors, who had put a total of $15.3 million into the company. A source close to Simple tells The Verge that the company had been shopping itself around in search of a buyer, since business wasn’t progressing as quickly as it hoped. “They had kind of run out of steam,” said the source, but with a big new partner and flush with cash, perhaps Simple will find a second wind. Read more
Markets: European stocks are opening flat following a mixed session in Asia as investors express wariness over the pace of growth in the world’s biggest economy. Recent soft US data leave the dollar trading at its lowest level this year and this is encouraging funds into government bonds, nudging down yields. Industrial commodities are a touch weaker as “risk appetite” wanes. Read more
First off – bonuses. I’ve said I’m pragmatic, I’ll pay in the market to get the best people and to hold onto them. What more do you want to know?
– Ross McEwan, ‘Ross McEwan, RBS chief executive, answers your questions,’ Guardian Read more
Passed along by Sebastien Galy of Societe General:
One core benefit of a high CHF was cross-border shopping in the Eurozone. Looking at the pattern of voting, one can forecast some significant slowdown at the Italian and German borders as has been the pattern in the past. Other consequences from the EU will take time to percolate. Read more
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
London prime property vendor finance, vignette #1:
Luxury property developer Christian Candy has lent more than £300m in the past year to wealthy London housebuyers, in a bid to profit from the banks’ withdrawal from the market, and aims to take his total lending to £1bn by the end of this year…
Last week he lent £25m for the purchase of a £35m private home in Knightsbridge, and he is now in talks to provide £100m for the purchase of a home in north London.
Here’s the Ocado mission statement:
To revolutionise the way people shop forever, by giving them a uniquely innovative and greener alternative to traditional grocery shopping.
At the 13-year mark, the revolution has not yet found room for profits, however.
With a torrent of new stock on the way this year attached to the latest round of hot initial public offerings (DFS, Zalando, Game, B&M Bargains…) with ebullient forecasts, it might be helpful to go back over Ocado’s history, and compare and contrast the hope with reality. Read more
Easy to forget now that the crisis-spotters have moved on to EM from the eurozone… but we’re almost coming to the first anniversary of the Cypriot bank depositor bail-in.
Of course, that time has sure flown by. The Bundesbank isn’t even shy about proposing wealth taxes in similar crises any more. But it’s also worth thinking about, given that recapitalisation (and thus, risk in different parts of a bank’s capital structure) is still very much a theme in European bank investing.
Plus, though ordinary Cypriots are still angry about the implosion of the country’s two biggest banks, in that last year or so the country’s economy has probably contracted by less than the double-digit decline expect. Exchange controls and the deposit freeze at Bank of Cyprus have also been (very gradually) lifted over time.
Which is why it’s interesting to look at a trade recently in a Cypriot bank which didn’t see investors get bailed in: Hellenic Bank. Read more
Warning! Read the boiler plate here
Things are rarely straight-forward in corporate Italy, and what follows is no exception.
According to usually well informed sources, the private equity arm of Goldman Sachs and Pirelli’s chairman and chief executive Marco Tronchetti Provera are looking to unpick Pirelli’s complex ownership structure with a viewing to taking the €6bn company private. Read more
According to a white paper released by UBS for this week’s World Economic Forum in Davos, the world economy remains as unbalanced today as it has been over the past quarter century – with big implications for the global economic recovery.
The authors argue that the adjustment of current account imbalances in the world economy was mostly a function of recession, not shifts in competitiveness. Large current account deficit countries restored external equilibrium at the cost of domestic disequilibrium, so output plummeted and unemployment soared. Read more
Mark Carney, Bank of England governor, has signalled that his policy of linking interest rates to the unemployment rate will be buried less than six months after its birth. He said the British economy was “in a different place” from last summer. Mr Carney flagged the U-turn at the World Economic Forum in Davos, letting the news emerge in a series of television interviews where he said that unemployment alone would no longer guide policy. Although his big idea for monetary policy bit the dust, Mr Carney said the BoE had no plans to raise interest rates “immediately”. He will outline his views fully in a speech on Friday. (Financial Times) Read more
According to a white paper released by UBS for this week’s World Economic Forum in Davos, one of the surprising factors ‘reshaping the world’ – the Davos theme this year – is an aggregate absence of austerity among governments globally.
Viewing the global economy as a single unit, the authors see a very different picture to the post-crisis world of austerity. Indeed, the two largest components of global GDP, namely private consumption and fixed investment, both hit multi-year peaks in the first quarter of 2008. The ensuing recession was arguably made less severe by the ongoing rise in government consumption. Read more
Mohamed El-Erian, one of the world’s best known institutional investors, resigned as chief executive of Pimco on Tuesday as part of a broader reshuffle at the world’s largest bond house. Mr El-Erian first joined Pimco in 1999. He rejoined the firm in 2007 after spending two years managing Harvard University’s endowment. Allianz, the German asset manager that owns Pimco, said in a statement that Mr El-Erian would be replaced by Douglas Hodge, chief operating officer, who has been with the company since 1989. Bill Gross will remain as chief investment officer. In an internal note to colleagues, seen by the Financial Times, Mr El-Erian said “the decision to step down from Pimco has not been an easy one”. He added his future was “an open question. I have no plans as of now”, although he would advise Allianz’s board on economic issues and continue his prolific writing. (Financial Times)
Britain’s banks have launched a strong intervention in the debate over the nation’s membership of the European Union, calling for closer ties with Brussels and urging the government to raise its game to make the single market work. The British Bankers’ Association has sent a submission to a Treasury review that counters fears over the split of powers between London and Brussels, saying the current balance was “broadly appropriate”. It added there was an “overwhelming” case for more resources to be devoted to relations with Europe and warned UK was significantly underpresented in Brussels. (Financial Times) Read more