Biography
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(Spending some time as FTAV’s Bombay wallah. Noticeably sweatier but not much else has changed.)

David studied economics, politics and journalism before joining the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

In between his degree and masters he wandered into the real world of business where he learnt how to manipulate a spreadsheet and organise meetings where nothing gets decided.

He has spent time in France, learning French, and India, learning how to cross roads, and enjoys nothing less than writing about himself in the third person.

His hobbies include reaching things on top shelves, running long distances at slow speeds, growing beards and trying to live up to a rash claim he made as a twelve-year old that “he had read all of the books”.

If you wish to know more about David please do pick up the phone and call him for a chat in the first person. Be warned though: he tends to talk at pace and in an Irish accent.

Christmas 2014, charted

An “asset return tree” (really), from Credit Suisse:

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The SNB goes negative

From the SNB, click through for the full thing:


Timing is a bit odd no? Worried about all them roubles perhaps? Read more

Further reading

Elsewhere on Thursday,

- When the gold standard was really a dollar standard.

- “As much as you think of the possibility that the hike is delayed, think also of the possibility of 1994.”

- The Cuba that was, 1963 edition.

- Putin’s “aides assured him Russia was rich enough to withstand the financial repercussions from a possible incursion into Ukraine”. Read more

Further reading

Elsewhere on Wednesday,

- Russia isn’t that unusual a story, except for the nukes.

- An open letter to Russell Brand.

- Beijing “is engaged in a mass city-wide rehearsal for life on an inhospitable planet.”

- The limits of purely monetary policies. Read more

That was then this is now, Rub edition

Your debounced rouble — 65 65.9 66.2 [just publish the damn thing - ed] against the USD erasing the gains from that 650bp hike from last night:

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The UK banking system, stressed

Do click through for the full thing — the Co-Op is the loser of the bunch and was told to hand in a new capital plan that “envisages a reduction in its risk-weighted assets of £5.5bn by the end of 2018, notably by selling some subprime mortgages.”. RBS and Lloyds were near misses:

From the report:

The stress scenario featured an initial shock to productivity, which led to an abrupt reassessment of the prospects for the UK economy.

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The research after the Russian hike before [updated]

For those of you who, like me, slept through the CBR’s attempt to sledgehammer the cumbling rouble back into some sort of shape by hiking 10.5 per cent to 17 per cent

Remember when breaking 60 was a thing? (Update at 0700ish: The rouble is up 6.2 per cent in early Tuesday trading to 60.27 per dollar) Read more

Further reading

Elsewhere on Tuesday,

- Michael Lewis wants all under 35 males with egos off Wall St. The value of personal experience…

- Russia and the Fed.

- Remember that highschool kid who supposedly made $72m in the stockmarket? Yeah? Well forget him. Read more

Your new (improved?) Chinese GDP

What you think of the new one will probably depend on what you thought of the old one. For many people “not much” seems inadequate.

From Capital Economics’ Mark Williams on the likely Tuesday announcement of an upward boost of up to 10 per cent to the Chinese government’s estimate of the size of its economy (our emphasis): Read more

Further reading

Elsewhere on Monday,

- Clearing houses, the most powerful financial regulators in the world — and they never asked for the job.

- Of British spies in Belgian comms.

- Pettis on the FT on “China turning away from the dollar.”

- Real business cycle theory and the high school Olympics. Read more

“必有牛市” – “There must be a bull market”

You’ve read about the scope for a dynastic bull market in the Economist… now read the report. If you can read Mandarin, like P/E ratios and have a good feel for Chinese imperial history that is.

Do click through the below for the pdf from Cinda. Joseph Cotterill, our resident Mandarin translator, assures us that it’s a chart of the last two millennia of order and chaos in China… which is nice: Read more

FX 2015, now with more hyperbole

It’s a variant on the ubiquitous “long dollar” that has passed through consensus into some region of near zen-like certainty, we grant you, but at least this is approaching the more outrageous corner of 2015 FX guesses. It’s entitled “How extreme USD strength can destroy the world” after all.

In two charts from HSBC:

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Further reading

Elsewhere on Friday,

- There’s a whole lotta stupid in Frankendodd, “Swaps Pushout” edition.

- “I would crawl on broken glass dragging my exposed junk to get this deal.” Good to know.

- The Sino-Japanese divergence.

- Bond market fairy tales part x. Read more

Aye, there’s the Rub

Take another 100bp puny market!

Oh… Read more

Syriza in the bond market

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Further reading

Elsewhere on Thursday,

- Jean-Claude Yellen.

- Regulators are finally coming to recognise the unintended consequences of their actions.

- Russian privatisation, the Coase theorem and methodological nationalism.

- Judo pays in Putin’s new, poorer, Russia. Read more

Keep beholding the (German) Euroglut

If you don’t you might miss all the capital outflow which, according to Deutsche’s George Saravelos, “not only has depreciatory implications for the euro, but also suggests that the consequences of Euroglut – low global bond yields and a stronger dollar – are here to stay.”

Oh, and blame Germany. Read more

China’s changing monetary policy, charted

Some cut out and keep from Morgan Stanley:

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Further reading

Elsewhere on Wednesday,

- Small states, economics and food banks.

- Bhopal: “Time seems half-suspended, the night of the accident preserved in the fashion of some permanently stopped Hiroshima clock.”

- Five economists who deserve Nobels.

- The Goldman touch and Junker’s CDO. Read more

China’s “new 4 trillion stimulus” and its collateralised weight

Biggest fall in five years that, even if it’s still up 35 per cent this year. Might be time to talk about the potential consequences of all this, no? Read more

Further reading

Elsewhere on Tuesday,

- DeLong on Krugman on Shinzo and the invisibles.

- Policy penance.

- Is Russia 2015 Venezuela 1983? Read more

China’s equity frenzy: putting easing on hold?

Nice from Simon Rabinovitch at the Economist:

One middle-aged man, Mr Xu, had come to meet a manager to inquire about how to subscribe to initial public offerings; their average first-day gain has been about 40% this year. He said he had taken the afternoon off work for the meeting and could hardly conceal his glee. “I’ve been trading since 1992 (just two years after the Shanghai Stock Exchange was established) and I guarantee you this bull market will last,” he said. He confessed to getting badly bruised by the last big one – his portfolio of 500,000 yuan had swollen to 3 million yuan by 2007 at the peak of the market, before falling back to its original level.

At the other end of the spectrum in terms of experience was Ms Zhou, 25, an interior designer with dyed-blonde hair. Like many other young professionals, she had previously put a big chunk of her savings in an online investment fund marketed by Alibaba, an e-commerce company. The fall in interest rates has reduced the return on that fund, pushing her to look for alternatives. “I had been thinking for a while about buying stocks but I had to travel for work and missed the best opportunity,” she sighed. “I will be conservative at first. Just one or two thousand yuan. Or maybe ten thousand.”

Which says a lot about the mechanical nature of this “super-bull” run. There’s simply quite a bit of money in China and a limited number of places for it to go. Once one is found… Read more

Further reading

Elsewhere on Monday,

- The imaginary world of small state people.

- Shinzo and the Invisibles.

- Shinzo and the Economist.

- “So most likely, China is sinking into a deflationary recession that’s increasing in speed and may take some time to run its course.” Read more

Buy STAN*

* Suggest Citi, kinda.

Still, it’s AN argument (with our emphasis):

After the debating – A favourite year-end discussion point for investors and brokers is do you back current winners or play reversion to the mean. Instead of looking at share price performance alone we ran a screen based on 1 year forward Price/Book today versus their past 5 year median. Our sample was Citi’s global coverage universe of bank stocks with a market capitalisation of over $10 billion (121 stocks). The “winner” in terms of largest de-rating is Standard Chartered with a 45% discount vs its 5yr median:

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Your Shanghai equity “frenzy”

And in the Shanghai Composite, from Fast, “as of 2:34pm in Hong Kong, turnover today is already $91.4bn, a record high according to Bloomberg data going back to 2005.”

Blame retail, blame leverage but don’t, as already mentioned, put too much weight on the Shanghai-Hong Kong Stock Connect scheme — uptake has been light and the timing is off. It’s up to you how much weight you put on that rate cut in late November. YEAH the equity rally got off the ground well before the rate cut with the Shanghai Composite up by 23 per cent between the start of June and 21st November, more than any other major equity market. BUT shares have also gone up 17.5 per cent since the rate cut so it’s obviously part of the story.

But to get back to the more important retail, leverage stuff…. Read more

Further reading

Elsewhere on Friday,

- Davies: the US Fed and the ECB view the consequences of the oil shock entirely differently.

- A planet of suburbs.

- Maths and morals, economics and greed.

- If you are not allowed to set the price… make it yourself.

- Economics: It’s a dirty job but someone has to do it. Read more

China’s levered stock market

Consider this from Gavekal’s Chen Long on the run up in China’s A-shares:

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Further reading

Elsewhere on Thursday,

- Economists aren’t ‘superior’ just because.

- Says you, says Noah.

- The startup and/or absurdity game.

- “Illiberal power on the downslope, not the upslope, could prove to be most threatening to the world.” Read more

Saying goodbye to the UK War Loan

From HMT:

The Chancellor of the Exchequer, George Osborne is today (Wednesday 3 December) announcing that the government will repay all the nation’s First World War debt.

The Chancellor also announced that the government will adopt a strategy to remove the other remaining undated gilts in the portfolio, some of which have origins going back to the eighteenth century, where it is deemed value for money to do so.

The Treasury will redeem the outstanding £1.9 billion of debt from 3½% War Loan on Monday 9 March 2015.

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Further reading

Elsewhere on Wednesday,

- The Tally All Right, Get Even Truly (TARGET) system as told by Lorcan Roche Tolkien.

- The fall of Gross.

- 10 things more useful than ECB sovereign QE that QE won’t accomplish.

- Pettis on how a China slowdown might affect the worldRead more