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’El-Erian: A disappointing G20 communiqué
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, responds to the outcome of the G20 Cannes summit.
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With a generally underwhelming communiqué, the G20 has missed an important opportunity to address mounting concerns about the dimming prospects for global growth,
G20 defers
Or, alternative headline: World fails to save Italy.
Seems like little has changed from the d(r)aft communique.
Click to read in full:
Choice morsels and Translation:
We stand ready to ensure
Cash in the attic, IMF edition
Fortifications at the ready! Given Merkel’s nein, Draghi’s pff and China’s err no to commit yet-more capital to the EFSF by process of elimination the only option left is…… the IMF.
Why not just beef up the policy lender to prop up the eurozone currency countries.
Kicking the Can(nes)
Under-promise then under-deliver. Then watch markets tank. That’s the prognosis for the G20 summit, courtesy of Capital Economics’ crystal ball.
After poo-pooing suggestions Bric nations will ride to the eurozone’s rescue or take constructive measures to resolve global imbalances,
US to Brics: thanks, but Europe needs to save itself
Not quite, but near enough, according to reports on Friday afternoon from the FT and Reuters.
The pink paper revealed on Thursday that Bric countries were looking at ways to support the eurozone, such as via a unicorn SPV,
Snap news
Breaking pre-market news on Friday,
- Copper down 7 per cent amid commodities sell-off — report.
- G20 communique promises “necessary actions to increase the flexibility of the EFSF” — report.
- EasyJet says easyGroup withdraws request for EGM — statement.
A G20 “victory”, part 2
Crossing the Reuters tape a little while ago, it seems members of the G20 have learned to play nice(r) since their last meeting in November:
G20 CONSENSUS REACHED ON CAPITAL CONTROLS AND EXPANSION OF IMF CURRENCY BASKET FOR SPECIAL DRAWING RIGHTS
But more on this in a minute.
Capital controls: the low-intensity currency war
The latest moves by South Korea and China — not to mention India, Malaysia, Thailand and a swag of other countries — to impose capital or price controls show that the hype over ‘currency wars’ is mutating into a low-intensity battle being waged by countries through a series of unilateral,
The rights of man(y) – a basket case
Q: What is 41 years old, worth $300bn and often neglected? A: The bridesmaid of foreign exchange: Special Drawing Rights (SDRs).
SDRs are the IMF’s international reserve assets, which act as potential claims on the freely usable currencies of its members.
A G20 “victory”
We expected little progress to be made at the G20 summit, and little is what we got. We also happen to agree with this NYT article that given the remarkable period of contentiousness just before the summit,
US-China relations explained, yo
The latest diplomatic spin coming out of the G20 conference in Seoul:
Obama is pushing for specific commitments from other G20 leaders at this summit to tackle global imbalances — shorthand for the massive U.S.
Table du jour, EM GDP edition
Courtesy of Ashmore, it’s long not wide:
These are at market exchange rates. At purchasing power parity, the emerging market share of global GDP rises to 53 per cent.
The list is top-heavy, with the top five accounting for about half of emerging market GDP,
Guest post: Seoul Summit — what could the G20 do?
FT Alphaville presents a guest post by Ousmène Mandeng, head of public sector investment advisory at Ashmore Investment Management Limited. The views expressed are strictly his own.
The G20
Macro Live 3: G20 preview edition
FT Alphaville’s new, dynamic feature, Macro Live, will be given another airing this Wednesday — ahead of the G20 meeting.
So join us at 3.30pm London time (10:30am in New York) on Wednesday for an hour or so of live,
Global imbalances? Blame the west
Independent Strategy have never been ones to mince words.
On Friday they’ve tackled the thorny issue of currency wars and global imbalances. It’s a topical debate given that US Treasury secretary Tim Geithner suggested earlier this week that G20 members (ahem,
Capital controls: new front in the ‘currency wars’
South Korea is showing its uncanny knack for timing with its planned new steps to curb capital inflows, just ahead of its star role as host of the upcoming G20 meetings — which are likely to be dominated by discussions of “currency wars”.
A year (and a bit) of Basel, recapped
Worthwhile reading on Tuesday — 22 pages of a Basel Committee on Banking Supervision report to the G20, on its financial reform activity since a 2009 Group summit told it to get cracking.
There are good summaries here of what Basel’s new global capital and liquidity rules will do,
Currency wars – ‘The crisis is upon us’
We’ve already commented on the rampant descent of the dollar on Thursday.
But here’s a scarily convincing argument from Marc Ostwald at Monument Securities about what all these QE-related currency war shenanigans could really be indicating.
Guest post: El-Erian on a disappointing G20 compromise
Pimco’s chief executive Mohamed El-Erian considers whether the G20 Summit in Toronto created a constructive compromise on financial stability, or generated a losing plan to turn around a slowing global economy.
The summer doldrums
The World Cup, Wimbledon and the emergency budget. Market professionals have plenty of excuses to sit on the sidelines at the moment — and they are taking it.
On Tuesday morning, the most actively traded stock on the London market was Stanelco,
Guest post: El-Erian on the need to listen carefully to what the G-20 is saying
Pimco’s chief executive and co-chief investment officer Mohamed El-Erian reacts to this weekend’s news out of Busan, South Korea.
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Count me among those that believe that the G-20 is one of the better approaches to global governance in a world that desperately needs improved international policy coordination.
The covered bond industry is miffed about Basel
The European Mortgage Federation has taken a closer look at what the Basel Committee’s new proposed rules — dubbed Basel III — could mean for the covered bond industry.
Turns out they’re not best pleased about two proposals in particular:
Counting the cost of the IMF’s bank taxes
If the IMF really does want two big new levies on banks, we’d better run the numbers. The snap conclusion of most bank analysts is that the International Monetary Fund’s proposal for some shiny new financial stability taxes could be quite a large headache for the sector.
[Darling: Budget Highlights 2010] Opening remarks
The banks and bashing of. Via Reuters:
DARLING – WILL SELL SHARES IN RBS, LLOYDS, NORTHERN ROCK IN WAY THAT MAXIMISES TAXPAYER VALUE
DARLING – BANK BONUS TAX HAS RAISED 2 BLN STG, MORE THAN TWICE AS
UK shifts on bank tax plan at G20
Gordon Brown, the British prime minister, backed away from his proposal for a financial transactions tax on Sunday after widespread criticism of his plan, set out in a weekend speech to G20 finance ministers in Scotland.
Tensions over IMF weigh on G20
European differences with the Obama administration threatened to overshadow Friday’s G20 summit in Pittsburgh, with Britain and France resisting US plans to overhaul the IMF. Under the US proposals, the IMF board would be cut from 24 seats to 20,
G20 to curb banker pay, retool economy
G20 leaders at their Pittsburgh summit are poised to crack down on banker pay and pledge to better co-ordinate economic policies as they endorse a plan to force banks to tie compensation more closely to risk and tighten capital requirements,
Exchanges warn of ‘dark pool’ dangers
The world’s stock and derivatives exchanges on Tuesday warned G20 leaders that the proliferation of alternative trading venues such as “dark pools” could harm the “proper functioning” of their markets.
China scorns focus on imbalances
China expressed doubts on Thursday about a US and European push to launch an effort to tackle global economic imbalances at next week’s G20 summit in Pittsburgh. Zhou Wenzhong, China’s ambassador in Washington,