Further reading

Elsewhere on Tuesday,

- Walmart’s visible hand.

- Deflation to inflation in one paragraph.

- Day traders: “The chances they’ll end up a winner is less than the parts in a warehouse spontaneously assembling themselves into a beautiful girl.”

- Versus your extreme buy and hold scenario.  Read more

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Google is launching its own mobile network in the US. The internet group has become increasingly frustrated at the slow pace of innovation at incumbent telecoms companies. That stops it providing new services in established markets, Google says, while putting unconnected users around the world out of reach. (FT) Read more

More on the 1 per cent and US inequality since the crisis

Following up on a recent discussion within the economics commentariat (to which we contributed), we emailed economist Ed Wolff to request a further breakdown of his findings on changes in US income and wealth inequality.

Wolff’s analyses data from the Fed’s triennial Survey of Consumer Finances, which considers pre-tax income but does include government transfers. You can read our earlier posts on his work here and hereRead more

Slaughter of the shells

Officials from the SEC have been out with axes and clubs across 24 states and also Canada, effectively putting 128 inactive penny dreadfuls or Pink Sheets out of their corporate misery.

Trading suspensions on Monday brought the number of micro cap companies suspended since the regulator began Operation Shell-Expel in 2012 to 800 — some 8 per cent of the OTC market, where all these previously traded. Read more

Synthetic tranches anyone?

Tight spreads, low volatility and a plethora of under-employed structured credit traders mean it’s time for investors to do just one thing – buy some synthetic structured products of course! Citigroup analysts are recommending the trades today, viz the following:

 Read more

Of negative rates and golden retrievers

Yes, yes, we should just look away, Bill Gross wants your clicks. But…

It would be pretentious to say that I resembled Honey in any way, but nonetheless she was the puppy I chose. Honey turned out to be a little bit of a tramp, so maybe there’s the connection. Back in the freewheeling ‘80s when society had not even contemplated poop scooping and blue pick-up bags, Honey would roam the neighborhood, depositing wherever she pleased, but bringing things back home in return.

 Read more

A handy Greek payment timeline

Given the pressure on Vani et al, this cash requirement schedule might be useful….

H/T Malcom Barr at JP Morgan. Read more

Markets Live: Monday, 2nd March, 2015

Live markets commentary from FT.com 

Prudence and the PBoC

If you wanna know why China cut policy rates again over the weekend this chart from UBS’s Wang Tao goes a fair distance towards explaining it:

The cut was earlier than expected, but the reasoning is pretty simple. As Tao says (with our emphasis): Read more

Further reading

Elsewhere on Monday,

- “As a sophisticated serial acquirer of businesses, Warren would much prefer to deal with wet behind the ears families lacking professional representation…”

- And how one of Buffett’s tricks is to be rigorous while seeming sentimental.

- Reasons to worry about US equities.

- The strange urge to raise rates. Read more

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Tens of thousands of people marched through Moscow yesterday inmemory of Boris Nemtsov, the slain liberal politician. In the largest opposition demonstration the city has seen in three years, people marched towards the spot where he was murdered on Friday on his way home from a restaurant near the Kremlin. Marchers held placards saying, “Boris, I’m not afraid” and “They killed you, they are killing freedom”. (FT) Read more

Meet the man who could own Aviva France

When he was seven years old, Max-Hervé George was given a magic ticket by his father. It lets him turn back the clock, to invest with perfect hindsight week after week, steadily accumulating a fortune.

The ticket is a life insurance contract and Mr George, now 25, has fought for years in the French courts to preserve its magic. He could be a billionaire by the end of this decade and, by the end of the next, his contract would be worth more than the insurance company which stands behind it, Aviva France.

There is no mystery to the financial magic, however. Instead it is a story of grand stupidity, of how a French insurer wrote the worst contract in the world and sold it to thousands of clients. Read more

When the commodity rents stop flowing…

Ever wonder what the collapse of a commodity means for the hegemonic order that controls access to it?

Look no further than the sugar trade of the 1800s.

A new paper by Christian Dippel, Avner Greif, Daniel Trefler entitled The rents from trade and coercive institutions: removing the sugar coating examines the effect of the sugar price collapse on wages and incarceration rates in colonies established for sugar cane cultivation. Read more

Markets Live: Friday, 27th February, 2015

Live markets commentary from FT.com 

“If it were a museum, some say that it would probably be the best museum in the world”

This fab alleged art market fraud story is fast developing…. While it does so, here’s the Bouvier brochure. Click to read:

 Read more

Quindell ain’t for sale whole

The latest update from Quindell lands. Contrary to rumors circulating, the company is not talking to Australian law group Slater & Gordon about a takeover of the whole business, just the professional services division where the UK ambulance chasing law firm resides.

Meanwhile, an ongoing review of the books by accounting firm PWC continues, and has taken longer than expected due to “the high level of corporate activity” which went into the formation of a jumble of businesses loosely connected to insurance. Also:

Advice in relation to the Company’s main accounting policies (in particular revenue recognition in the Professional Services Division) is being further considered and no conclusions have been reached.

 Read more

The Bank of England’s balance sheet in looong-term perspective

In celebration of the Bank of England’s One Bank Research conference, the Bank has, for the first time, produced information on its balance sheet going back more than three centuries “in a user-friendly spreadsheet form and as continuous time series.”

There’s lots to digest in there, but one thing we’d like to focus on is the size of the balance sheet relative to the UK economy. Bond-buying initiated under the Bank’s quantitative easing programme boosted the relative size of the Old Lady’s holdings by a large amount relative to the recent past. Relative to the full history, however, QE looks somewhat less exceptional: Read more

Further reading

Elsewhere on Friday,

- The hyperloop is becoming a thing.

- Charlie Stross on the financialization of everything.

- Is oil space running out?

- How the Silk Road episode shows that stateless pirate fiefdoms always turn into states.  Read more

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The US approved the biggest government intervention in the way the internet is run in almost two decades. The telecoms regulator adopted new “net neutrality” powers to ensure that broadband is treated as a public utility and all traffic is treated equally. (FT) Read more

Bonar turns into subpoena

That’s the gist of the latest from Judge Thomas P. Griesa…

On Wednesday the District Court judge ordered Deutsche and JPMorgan to turf over documents on the “flow of funds” relating to an unofficial, $2bn sale they were arranging of US dollar-denominated — although not US-law — bonds (Bonars) issued by Argentina. Read more

A tale of two deflations, in one chart

The US has falling prices again, but bulls need not fear: it is “good” deflation, as it is all about falling gas (petrol) prices making consumers better off.

Still, this chart should offer pause for thought: it shows US inflation on the same basis as the eurozone, which is worrying about “bad” deflation. The eurozone doesn’t include housing costs in its basket of consumer prices, so this compares the US excluding housing costs too. It doesn’t look pretty, with more deflation on this basis in the US than Europe. Read more

US bank assets, then and now

We know there’s been a great deal of change on the asset-side of banks’ balance sheets since the crisis. But if you ever wanted it summed up in one table, look no further than the following:

 Read more

Noble Group, an ‘asset light’ commodity nomad

Earlier this month, Noble Group – Asia’s biggest commodity trader by sales – rebuffed accusations by an unknown research group called “Iceberg Research”, which had accused it of shoddy accounting practices that inflate profits.

On Thursday, Noble released its full-year results, recording headline net profit of $132m after impairments on a range of assets and investments totalling $438m, which generated a net loss of $240m in the last quarter. Read more

Markets Live: Thursday, 26th February, 2015

Live markets commentary from FT.com 

Some StanChart reading

An orderly succession plan balancing stability with fresh perspective...

Standard Chartered’s new chief executive Bill Winters, who brings gravitas and respectable fame to the top of the bank, has been both a banker and a shadow banker. Happily, the FT has already spilt many pixels on his career. Here’s a quick selection: Read more

Why isn’t the Fed worried about collapsing breakevens?

Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.

–Charles Goodhart, 1975 Read more

A portrait of the takeover artist as a young man: Warren Buffett’s 1965 letter

No doubt readers have set aside a few hours this coming Saturday to digest Warren Buffett’s annual letter to Berkshire Hathaway shareholders, which this year weighs in at a record 20,000 words.

It is the Golden Anniversary edition, with musings not just on the past year but also on what the next 50 might hold. We are promised a little reminiscing, too — which prompted us to look back to the time when Mr Buffett assumed control of an ailing New England textile manufacturer and set out on his most extraordinary journey. Read more

Further reading

Elsewhere on Thursday,

- Pettis: When do we decide that Europe must restructure much of its debt?

- Lessons for Greece from Iceland’s banks.

- Scarcity.

- RU, a pain in my Bund?

- Russia: You can always know what’s going to happen slightly in advance by following the financial dealings of insiders.  Read more

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Morgan Stanley will pay $2.6bn to settle claims that it mis-sold mortgage-backed securities in the run-up to the financial crisis. The US Department of Justice had charged half a dozen banks with mis-selling – this settlement brings the total of mortgage-relatedpenalties to about $40bn. Goldman Sachs is likely to be the last of the banks to settle its case. (FT) Read more

Should central banks adopt a green agenda?

We know central banks have the power to support asset classes and to move markets, and do so frequently in the name of financial stability.

But are there other social threats that could be stabilised or mitigated by central banks in a similar way?

For example, should central bank monetary policy be charged with a green agenda? Should central banks take it upon themselves to encourage and support the formation of liquid environmentally-focused markets? Read more