Markets Live: Tuesday, 24th March, 2015

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Er, what exactly was the ‘UK plan’?

From the British prime minister’s official Twitter feed on Tuesday…

  Read more

Yup, do blame the locals for that Swiss franc spike

Always nice when data confirms a thesis. Especially when that thesis is the Swiss shouldn’t look far from home in search of someone to blame for the removal of their Swiss franc floor.

 Read more

Further reading

Elsewhere on Tuesday,

- How secular stagnation came to Smurf Village.

- A policy-driven bond bubble?

- Air conditioning never gets the credit it deserves, economic growth edition.

- Of restaurant trickery.

- Britain, where “all around the hollowing centre are multiple populisms, rubbing their hands.”  Read more

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Unemployment is here to stay in Europe, where it now stands at 11.2 per cent. The ECB projects that one in 10 workers in the eurozone will be unemployed even after the ECB’s quantitative easing programme has taken effect. (FT)

Yet Mario Draghi hit back at QE critics, rebuffing accusations that the programme will result in governments jettisoning economic reforms, instead insisting “growth is gaining momentum”. It seems even the US stands to gain from European QE – Stanley Fischer, a leading Federal Reserve policy maker, foresees a boost to US exports as a result, even if the strong dollar offsets some of those gains. (FT) Read more

An Argentine bond reprieve — or is it?

Could there finally be a limit to just how far around the world the pari passu saga goes?


But for a longer answer, read on. Read more

Protecting the message on petroleum

Fresh out of Riyadh…

Saudi Oil Minister Ali Al-Nuaimi Sunday proposed establishment of an association dedicated for petroleum media, which comprised of Gulf and Arab journalists covering energy affairs. Saudi Arabia is ready to support the establishment of this association with the objective of boosting transparency among GCC countries and prepare oil strategies of the Arab Gulf countries… Read more

Is the Fed bluffing on rate hikes?

It might not be polite to say it overtly, but concerns are growing that the Fed’s rate hiking promises may be nothing more than a big bluff.

The vogue for doubting Fed rhetoric started in earnest on March 11, when Ray Dalio, founder of hedge fund firm Bridgewater Associates, wrote to investors that there was a risk if the Fed raised rates too fast it could create a market rout similar to that of 1937. Read more

Markets Live: Monday, 23rd March, 2015

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The credit clock tolls for (some of) thee

From RBS’s Alberto Gallo and team:

Gallo is, selectively, very bearish (not on India though, natch) for the obvious reasons: Read more

Economists agree: deflation is either good, or bad, or irrelevant

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Further reading

Elsewhere on Monday,

- Currency wars rebound on the Fed.

- The Iron Throne is facing a debt crisis.

- The myopia epidemic.

- O rly? “In New York, teens and preteens are becoming savvy connoisseurs of real estate.”

- Marx madness and the socialist sixteen.  Read more

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Lee Kuan Yew, the founding father of modern Singapore, has died aged 91, half a century after he led the city-state to independence. (FT) Read more

Blockchains as a public and private resource

FT Alphaville attended Tomorrow’s Transactions 18th annual forum this week where all facets of blockchain and distributed-ledger systems were explored.

The most interesting ideas (at least to us) were those presented by Vitalik Buterin of Ethereum and Preston Byrne of Eris Industries. Both are focused on moving blockchain beyond bitcoin and towards useful real-world applications.

The former, for example, is focused on creating a so-called “Turing complete” public chain that would — as we understand it — allow anyone with coding capability to tap a globally distributed processing network to run their programmes upon safe in the knowledge that the underlying data can’t be falsified or manipulated. Read more

The tech formula: Nasdaq = small caps + Apple

The Nasdaq Composite has broken the furthest above 5,000 today since the flagship technology market peaked just 2 per cent higher at 5,132 in March 2000.

At the same time the Russell 2000 is back at record highs. This is no coincidence: while the Nasdaq is regarded as the benchmark for tech, it actually trades much more like the small cap measure than anything else. Read more

Total non-eclipse of the power grid

John Kemp of Reuters quantifies this morning’s solar eclipse with data from the National Grid’s website:

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Markets Live: Friday, 20th March, 2015

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The changing geography of US employment

In a previous post we looked at which US states were the best for job growth in 2014. (North Dakota was best overall, followed closely by Utah, which has the advantage of not being reliant on energy extraction, as well as one of the highest median incomes in the US.) In this post we’re going to take a longer view of how the distribution of employment has shifted across the most populous US metro areas since 1990, when the data begin.

The first thing to note is that the share of Americans employed in one of the major metro areas in our sample* has stayed relatively constant since 1990, although there have been some interesting trends over the period: Read more

Further reading

Elsewhere on Friday,

- Greece — still playing chicken games?

- “Organizers say it will almost certainly be the first paper at the prestigious Brookings Papers on Economic Activity that was commissioned based on a blog comment.”

- Fantasy macro.

- If economists were right, you’d have a raise by now. Read more

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Bond investors are betting that the Fed is making like Michael Jackson and doing a moonwalk – it looks like you’re going forward but you’re actually moving back. Thus undeterred by the Fed’s ditched pledge to be patient about lifting rates, plenty of the smart money is on US rates staying near historic lows. Read more

One very predictable consequence of the fall in EURUSD: hordes of American tourists

You know that the rise in the dollar is having an impact when US newspapers write trend pieces about how great it will be to take a vacation in Europe.

Here’s an excerpt from a recent Washington Post story headlined “The best places in the world to visit while the dollar is this strong”: Read more

Have we just seen the last $ spike?

Quite a bit of motion sickness in the world of FX on Thursday, with the sharp pullback in the dollar that followed Chair Yellen’s dropping of the Fed’s “patient” pledge on Wednesday now all but reversed…

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The return of goldsmith banking

The exciting thing about negative rates in the current context is that they make the fundamental ETF, MMF and repo-type structure that lies at the core of central banking much more obvious.

In a negative rate regime the “central bank ETF” essentially clips your rights to the underlying collateral that it holds on your behalf, often, beyond the arbitrage spread a primary dealer can secure. It’s easy for a regular ETF to enforce such a management fee because all its units are electronically registered. All costs, as a result, are distributed equally. If the managing fee is too great, meanwhile, customers would just go elsewhere. Read more

On the potential of closed-system blockchains

Followers of FT Alphaville’s Bitcoinmania series will be familiar with our generally sceptical position on all things bitcoin.

Indeed, over the course of more than 64 posts, we’ve presented a mostly negative case for bitcoin “the currency”, and remain confident that the open-source “people-cleared” cryptocurrency (which replaces one accountable and identifiable third party with 10,000 anonymous parties of dubious intent) is ill-suited for the job of currency in any stable economic system.

That said, we have reflected tiny bursts of enthusiasm for what blockchain technology, the distributed public ledger underpinning bitcoin, could do for the murky and shadowy world of OTC bilateral clearing. Read more

Markets Live: Thursday, 19th March, 2015

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Want your own marquee at Camp Alphaville?

Serious opportunity this.

If you attended Camp Alphaville at the Honourable Artillery Company grounds last summer, you’ll know we had a lovely outside area with food vans, beer, frozen yoghurt, dancers, comedians and drones….

Well this year — on July 1, again at the HAC — we have lots more space. In fact we have up to half a cricket pitch of extra space. Read more

Further reading

Elsewhere on Thursday,

- “For today at least, score this one in favour of the monetary heroin addicts.”

- The puny fiscal effects of European QE.

- Modern and postmodern recessions.

- “The rent hypothesis has a lot to say about our economic world.” Read more

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Patience is out and the US Federal Reserve is free to raise interest rates. In one of the most hotly anticipated Fed meetings of the past year, the central bank ditched its pledges to be patient before increasing interest rates and is now free to raise them as early as June. (FT) Read more

Video: FOMC analysis

Cardiff and Matt discuss Wednesday’s Fed action:

Macro Live, FOMC presser edition

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