Alastair Marsh
A Goldman guide to the monetary policy playground
Goldman Sachs welcomes you to the modern world.
The US bank has put out a primer on “‘unconventional’ unconventional policies” to guide us through the maze of recent central bank moves from ‘operation twist’ to UK QE2 and the imposition of a minimum rate for the EUR/CHF exchange rate by the Swiss National Bank.
Edwards: Going bust and ECB QE
What’s come over über bear Albert Edwards? The day after Europe’s leaders reached a deal (of sorts) to tackle the region’s sovereign debt crisis the SG strategist is relatively chipper:
I have minimal confidence that governments can turn this around within the confines of the eurozone project.
Greek lessons from John Major, Latvia and Ireland
So, bondholders (if they “agree”) will give Greece more of a fighting chance to tackle its debt burden. But Greece will also have to pull its own weight.
Without its own currency, what is the best course of action? John Major,
Fitch: Russian gold = Russian risks
Talk about obvious:
[Russian gold and silver producer] Polymetal plans to swap its Russian listing for a place on the main market of the London Stock Exchange and is also expected to enter the FTSE 100 index.
Eurozone running out of knights
Knights in shining armour that is.
The recently-floated plan for the big emerging markets to send money to Europe via an IMF-led SPV, which could be used alongside the EFSF to buy sovereign debt, is getting the lead balloon treatment.
(Mis)pricing the UK
Has the bond market got it right when it comes to the UK?
On Tuesday, Lex investigated why the UK can raise debt at substantially cheaper levels than its eurozone counterparts, in particular France.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Be bold, Mario, put out that fire
Dear Mario,
Congratulations and commiserations: next week, you will take up one of the most important central banking jobs in the world;
Cheap China
China is cheap — at least on a price-to-book basis.
At 1.58x the P/BV of the MSCI China is still below the 2008/09 lows of 1.64x. At this level China is among the cheapest countries in the MSCI universe (Russia and Hungary are the cheapest) .
DPS vs. EPS
Dividends or earnings? Where should equity investors put their hope if Europe slides into a recession?
The former will likely outperform the latter, according to Morgan Stanley analyst Ronan Carr. He gives four reasons for this:
Dad, where does growth come from?
So much for emerging markets propelling the world economy out of its current malaise.
Forget China’s healthy manufacturing data; the debt crisis in the Eurozone, deleveraging in the US and sluggish economic growth across the developed world will restrain EM economic activity for the rest of this year and into 2012.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Lawrence Summers: Why the housing burden stalls America’s economic recovery
The central irony of financial crisis is that while it is caused by too much confidence,
A Russian solution to EU problems
Here’s an idea for EU summit-goers this weekend: if no progress is made to boost the lending capacity of the EFSF…
… ask Russia for a loan.
Sound mad? It is a little, but hear us out.
Cyprus secured emergency funds from Moscow earlier this month to help it avoid becoming the latest eurozone country to request an international bail-out.
Expectations and the EU
Apologies for being a downer on a Friday, but the upcoming EU summitS (yes, there will now be two) are unlikely to produce a bazooka-style solution.
Sure, you already know this, but Citi (the same bank who predicted the bazooka would turn out to be a peashooter) has captured the gloomy sentiment rather succinctly.
The trouble with central bankers…
Central banking and central bankers as we know them are out of touch with the modern world and ill-equipped to deal with the challenges set before them.
That is the view of Morgan Stanley’s Manoj Pradhan who argued that the current ‘DDD regime’,
Time to revisit/rethink EM equities?
Investors are making tentative steps back to emerging market equities.
Last week EM equity funds reported positive flows, on aggregate, for the first time in three months — fund flow data from EPFR Global showed a net inflow of $667m for the week to Wednesday October 19.
Free at last in Belarus
Belarus has finally unified the two remaining segments of the FX market, after months of dragging its feet. In other words, the Belarusian rouble is now “properly devalued” to quote Nomura analyst Tatiana Orlova.
Albert Edwards: Hold on for a hard landing in China
What are chances of a soft landing for the Chinese economy? Pretty slim if you ask über bear Albert Edwards.
The Société Générale strategist reckons “blind faith” in the competence of the Chinese authorities to guide the economy to a soft landing is misguided.