By Theo Casey, marketcolor
This might be best considered an addendum to Kate’s Politburo detective work on Friday which highlighted China’s changing attitude to growth (now maybe less important) and financial risk (now probably more important). It’s a piece of the China recovery puzzle we don’t look at enough. Read more
By Theo Casey, marketcolor
Half nine (GMT) is seldom a cheery time of day for the Chancellor.
Mid morning, several times a week, the Office for National Statistics releases worse-than-expected parcels of economic gloom, which serve to undermine HM Treasury and George Osborne’s Plan A.
At least that’s what it normally does. Read more
This post by Gavyn Davies has been cross-published at Gavyn’s own blog.
The work of Carmen Reinhart and Ken Rogoff (RR) on public sector debt ratios, and their relationship with GDP growth, has been extraordinarily influential in academic and policy circles since 2010. Before this week, their statistical analysis, based on a 200-year database which they had painstakingly assembled covering dozens of countries, had appeared to establish an important stylised fact: that debt ratios above 90 per cent were associated with much lower rates of GDP growth than debt ratios under 90 per cent. The sudden drop in growth at a debt ratio similar to that reached in many developed economies acted as a wake up call to governments and encouraged the adoption of austerity programmes. Read more
The IMF holds its Spring Meeting in Washington DC this weekend, amid continued debate over how it has responded to the eurozone crisis. Gabriel Sterne, a senior economist at Exotix with two decades of public sector experience including at the IMF, presents his case for reforming the Fund.
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This is a guest post by Jean-François Groff, the CEO of Mobino, a Geneva-based mobile payments company. He is also one of the Web’s pioneers, having contributed to the definition of HTTP and HTML with Tim Berners-Lee at CERN.
Financial inclusion is undoubtedly a hot topic. As digital wireless infrastructure covers the globe, a host of mobile money providers have sprung into action to provide unbanked citizens with convenient ways to move money, turning phones into wallets. But the money in these digital wallets is not really equivalent to cash. The convenience of mobile money comes at a cost, both to the state and to its citizens. Read more
This is is a guest post from Philip Pilkington, a writer and research assistant at Kingston University.
In January of this year I noted that the Japanese government was embarking on a stimulus programme and briefly enquired into whether it would likely work or not . At the time media commentary was mixed. Some were saying that it would be a complete failure while others were overflowing with optimism. I was slightly more reserved. Read more
The ‘Cypriot precedent’ and experiment with capital controls, a first for the eurozone, are still reverberating around the EU. Gilles Thieffry, a Partner at GTLaw, Geneva, writes on possible legal implications.
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The following is a guest post from Chris Cook, a senior research fellow at the Institute for Security and Resilience Studies at University College London. His work is focused on a new generation of networked markets – which will, in Chris’s view, necessarily be dis-intermediated, open, decentralised and, therefore, resilient.
The second attempt to resolve the unsustainable debt burden of Cyprus’s over-leveraged banks spreads the pain differently to the disastrous initial attempt, but looks likely to leave Cyprus as an economic wasteland for generations. Frances Coppola outlined brilliantly yesterday the sort of financial disaster zone which Cypriots can expect. Read more
This guest post is submitted by Donald Luskin, chief investment officer of Trend Macrolytics. A hat tip to Lorcan Roche Kelly, chief Europe strategist of Trend Macrolytics and longtime friend of FT Alphaville, for the suggestion.
An abiding narrative explaining the melt-up in US equities — despite a sluggish economy and slow earnings growth — is that quantitative easing by the Fed amounts to printing money, which finds its way into stocks. Read more
Many thanks to economist Scott Sumner for this guest post responding to a recent comment by John Kemp, a Reuters analyst. Scott’s native writing home is The Money Illusion.
John Kemp recently posted the following questions in a comment at FT Alphaville:
Three questions for advocates of NGDPLT targeting to answer:
From Richard Farley, Leveraged Finance partner at lawyers Paul Hastings
Last Friday, Britain’s top financial regulator, Martin Wheatley of the Financial Services Authority, issued his final report with recommendations for the comprehensive reform of the scandal-ridden LIBOR setting process. Read more
This is a guest post from Clive Howard, a senior principal lawyer in RJW Slater & Gordon’s employment department. His high-profile cases include acting for Paul Moore in a whistleblowing case against HBOS, and Brodie Clark, former head of the UK Border Force, against the Home Office.
Whistleblowing incentives just got international Read more
This guest post was submitted by Jason Abbruzzese of FT.com.
A little more than a year ago, Citi chief economist Willem Buiter said water was on its way to becoming “the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals”. Read more
This is a guest post from Chris Nelder, an energy expert who has spent a decade studying and writing about energy and related issues. He has written two books (Profit from the Peak and Investing in Renewable Energy) and hundreds of articles on energy and investing. He blogs at GetREALList.com and writes the Energy Futurist column for SmartPlanet.
Is peak oil dead? Read more
Dr Thies Lindenthal, a researcher in virtual real estate at the Massachusetts Institute of Technology, submits the following post to FT Alphaville.
The piecemeal roll out of new virtual space is unfair, risky and detrimental to the user-acceptance of new space on the internet.
Read more
FT Alphaville doesn’t know if Tadas Viskanta, proprietor of Abnormal Returns, was the first curator in finance blogland — but we do know that he is still very much the best. And as Tadas was certainly among the first to start linking to us frequently back in our early days, we’re delighted to host an excerpt of his new book, Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere.
The following passage is from Chapter 10: Behaviors and Biases. Read more
The below was submitted by Satyajit Das.
In the mock-umentary Best in Show, Christopher Guest mercilessly portrays the world of dog shows, following five dogs and their owners in the competition for top honours at the Mayflower Kennel Club Show. Bankers have their equivalent – banking awards. There are many similarities – an overt self-absorption, ferocious competitive bitchiness and feigned good sportsmanship. Both are completely meaningless and very funny. Read more
Thanks to John Kemp, analyst at Reuters and long-time FT Alphaville favourite, for letting us cross-publish his column this morning. An archive of John’s work can be found here.
Economists and media commentators have lined up to question the accuracy of estimates published by Britain’s Office for National Statistics (ONS), showing gross domestic product shrank 0.2 percent in the first quarter, tipping the economy back into recession. Read more
This is a guest post for FT Alphaville by Theo Casey, a columnist at Futures & Options World, blogging on the back of FOW’s European Equity Options conference in Amsterdam.
The year is 2017. Read more
FT Alphaville pal Josh Brown, who blogs as The Reformed Broker, just released his first book, Backstage Wall Street. Here we present a two-part excerpt from Chapter 16, “Tales from the Sell-Side”. The first part describes the moment Josh realised that brokerage analyst research was “a giant joke”, and the second part offers his analysis of why.
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Merry Sheils, a finance writer and former portfolio manager, submits this guest post for FT Alphaville after an interview with Mike Mayo on Wednesday. She blogs at merryssimplefinance.blogspot.com.
Greg Smith’s Goldman Sachs’ garish resignation via an op-ed piece in yesterday’s New York Times nearly jammed the Internet, and everyone on the Street had something to say. Read more
Matt Steinglass, the FT’s Netherlands correspondent, submits this guest post about the projected Dutch budget deficit and how language affects attitudes towards debt.
The Dutch Central Planning Bureau plunged the country’s political scene into a maelstrom on Thursday by releasing figures estimating the country’s budget deficit will reach 4.5 per cent of GDP in 2013. Read more
On the third anniversary of the launch of quantitative easing in the UK, Dan Conaghan, author of The Bank – Inside the Bank of England, believes the Treasury Select Committee needs to take a fresh detailed look at Britain’s approach to monetary easing.
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The following is a guest post from Chris Cook, a senior research fellow at the Institute for Security and Resilience Studies at University College London. His work is focused on a new generation of networked markets – which will, in Chris’s view, necessarily be dis-intermediated, open, decentralised and, therefore, resilient.
Following the recent upsurge in interest in Modern Monetary Theory (MMT) I was rash enough to make the comment that the central insight of MMT – that modern ‘fiat’ money is a credit instrument ultimately based upon the government’s power to tax – is muddied by disputes as to what the proper basis for taxation actually is, or indeed, whether there should be any taxation at all. Read more
From Prof Dimitris Petmezas, Chair in Finance at Surrey Business School, University of Surrey…
Investment banks, and particularly top ones, have been in the firing line over their role in the recent financial crisis and the very high – some might say exorbitant – fees they receive. Are top investment bankers the bad guys they are often presented as by the media? Investment banks’ main job in today’s demanding financial world is to deliver expertise to their clients in capital market transactions, including M&A, in return for fees. The leading investment banks compete heavily for pole position in the league tables, as high rankings open the ground for new clients and, hence, new deals. How important are the league tables? Do they really distinguish the good banks from the bad and is it worth paying such high fees for employing top-tier investment bankers? Read more
The note below has been prepared by the Alternative Banking Working Group of the Occupy Wall Street (OWS) movement. As with the prior note published on FT Alphaville, we present it — without comment — as a document for understanding the aims of OWS.
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From Alberto Saravalle, managing partner at Bonelli Erede Pappalardo
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Presented below is a note prepared for the December 4th meeting of the Occupy Wall Street General Assembly by its alternative banking working group. We present it – without comment – as a document for understanding the aims of OWS (as per John Gapper’s recent column).
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Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, submits this guest post to FT Alphaville in reaction to this morning’s coordinated announcement.
Risk markets love liquidity injections, real and perceived. As such, they will welcome today’s announcement by six major central banks to reduce the price of emergency financing and broadening its scope. They will also like the possibility that this dramatic coordinated move provides a stronger context for further actions at the level of individual institutions. Read more
Many in the market are now thinking through the consequences of any one country (or all 17 member states) changing currencies on departing the euro. Gilles Thieffry, a Partner at GTLaw, Geneva, has perhaps been thinking it through earlier than most. He started in 1998. We are pleased to present his analysis of the “redenomination risk” confronting markets in 2011.
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Older entries
1'Collectively, humanity has yawned and decided to let the dangers mount'
2Man walks into a gold bar. Au!
3The end of QE?
4Rise of the funding altruists
5Bird, plane, Abe
Show more6The persistent supply-side constraints in US housing
7Bove vs Bloomberg, redux
8A glorious episode in the history of the Revenue
9Risk goes on, Risk goes off
10When credit markets become boring
Show fewer