The Closer

FURTHER FURTHER READING

- The disruption myth. Read more

The return of the American borrower

The Federal Reserve’s latest flow of funds data shows that US households have rediscovered their credit cards, and lenders are eager to oblige them. Just look at this:

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Henley demoted at Oracle as Ellison refuses to retire

Generalised exec deckchair shuffle at USS Oracle, out of the blue on Thursday…

The Oracle (NYSE: ORCL) Board of Directors today announced that it has elected Larry Ellison to the position of Executive Chairman of Oracle’s Board and appointed him the company’s Chief Technology Officer. Jeff Henley, who has served as Oracle’s Chairman for the last 10 years, was appointed Oracle’s Vice Chairman of the Board. Read more

A Scot vote bonus for Long Room members

Sorry we can’t offer this up to the open web, but if you are planning to stay up to watch the Scottish independence vote, and you also have access to the usual place, check this handy little excel download. Read more

Slowly, very slowly, getting China’s house in order?

Oh look, China’s property market has worsened again:

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Markets Live: Thursday, 18th September, 2014

Live markets commentary from FT.com 

The (early) Lunch Wrap

Scotland votes || Easyjet increases dividend, fleet || Bayer to float plastics business || Dubai regulator restricts Espirito Santo activity || News Corp takes Google opposition to EC || Dollar and Sterling up Read more

Un petit TLTRO

This is well below the €100bn-plus forecasts that were consensus…

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Chicken Kiev

After Russia instituted its ban on western food imports in August, we noted there was a risk the measures could end up hurting average Russians just as much, if not more, than European farmers.

We also noted that propaganda dynamics could make it hard for westerners to discern the truth with regards to what was really going on. Read more

Buybacks, dividends, Modigliani and Miller

This provocative table from Edward Hadas at Breakingviews, along with a recent article appearing in The Economist, reminded me of an analysis I used to do in investment banking when clients would ask about the differences in value creation between share repurchases vs. dividends.

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Further reading

Elsewhere on Thursday,

- Keynes, Norman and the Macmillan committee.

- One bank’s cost is another firm’s revenue.

- The Darwin economy – why Smith’s invisible hand breaks down.

- The real Olive Garden scandal.  Read more

The 6am London Cut

The Cut, The Survey: The 6am Cut, Lunch Wrap and Closer emails will soon be relaunched in enhanced form. We want to ensure we’re providing only the most useful data, news and views — taking this short 2 minute survey would help us do that.

Markets: The Asia-Pacific response to the Federal Reserve’s policy update was mixed, with Japanese stocks soaring but other major indices in the red. Thanks to a weakened yen Tokyo’s Nikkei 225 rose 1 per cent to 16,049, on track for its highest closing level since early January. (FT’s Global Markets OverviewRead more

Video: FOMC reaction

We talked to the FT’s US markets editor Michael MacKenzie just after the FOMC presser ended. See also the reactions from James Mackintosh and Robin Harding.

The Closer

FURTHER FURTHER READING

- Clive Crook thinks Scotland should vote Yes, while John Kay thinks the economic arguments about independence are irrelevant and overblown Read more

Maths and the FOMC

The dot plot might include two downward pointing arrows to offset the two hawks dissenting from the Federal Reserve statement today, but there’s a growing group expecting a lot of rate hikes next year.

I’ve highlighted two clusters on the Fed’s “dots” showing where they expect rates to end next year and 2016: Read more

Macro Live, Fed presser edition

Live markets commentary from FT.com 

FOMC statement for meeting of September 16-17, 2014

A few quick takeaways:

– The “considerable time” phrase stayed, as did “significant underutilization of labor resources.” Read more

Reminder: Macro Live for FOMC presser starting at 2:25pm EST

Just passing along the same info as earlier today…

A potentially pivotal FOMC meeting wraps up today, after which Janet Yellen will take questions from the media. Read more

The belated Michael Lewis effect?

The five and a half months since this book was published have not been an easy one for the high frequency trading community, certainly in the US…

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The (obscene) cost of hedge funds [Update]

With back of envelope in hand, lets estimate what the world’s pension funds have paid its hedge fund managers, and what they got back in return.

First we need an idea of how much cash pension fund trustees have placed with hedge funds. Here’s the breakdown of estimates given to us by Preqin, a data provider (click to enlarge):  Read more

The fatal flaw that could doom the European project

There have been many failed attempts to unify the European continent by force.

More recently, politicians have tried to do it peacefully, with some limited success. The European Union has an elaborate bureaucracy and an elected parliament that together oversee everything from cheese names to foreign affairs. A majority of the EU shares a currency and monetary policy, as well as a common banking regulator.

But these supranational institutions are becoming increasingly unpopular among actual Europeans. Moreover, new research presented at the semiannual Brookings Papers on Economic Activity by Luigi Guiso, Paola Sapienza, and Luigi Zingales suggests the traditional strategy for promoting integration has reached a dead end. Instead of “more Europe”, the trend in the near future may be the revival of nationalism.  Read more

Markets Live: Wednesday, 17th September, 2014

Live markets commentary from FT.com 

Tokyo on Thames

Older readers may remember the property boom which engulfed Tokyo from about 1986 to 1991. The apocryphal statistic was that land under the Imperial Palace was worth about as much as the state of California.

The bursting of that bubble — as well as one in the stock market fuelled by loose monetary policy, financial speculation, corporate cross-holding and dodgy accounting — was followed by the Japanese economic stagnation that persists to this day.

What many readers may not realise, however, is that housing in parts of London is now more expensive than for Tokyo at the peak of that boom. Read more

The (early) Lunch Wrap

Sony warns of $2bn loss || Russian Oligarch under house arrest || Polls put Scottish “No” ahead || Sky Deutschland boards reject deal in motion || JD Sports profits up || Stocks rise Read more

Reminder: US Macro Live, FOMC presser edition

A potentially pivotal FOMC meeting wraps up today, after which Janet Yellen will take questions from the media.

Over at the usual place, Matt and I will be providing commentary in real time during the presser in addition to cheering on the FT’s man in Washington, Robin “Hip Specs” Harding. We’ll start at 2:25pm EST (7:25pm in London). Read more

Sony, 56 years later

Yup. That’s what you get when your expected annual net loss looks set to come in at nearly five times your initial prediction at some Y230bn ($2.14bn). Read more

Video: Calpers and hedge funds, the end of the affair

Joseph and Dan discuss the decision by the largest US public pension fund to ditch hedge funds, on the set of mastermind.*

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Further reading

Elsewhere on Wednesday,

- Timothy Geithner’s revenge: A broken bond rating system.

- The overpaid CEO.

- “The trend seems to be that more people are insider trading than you’d think… The strange thing is that they’re always doing it so badly.”

- How the free rider idea evolved. Read more

The 6am London Cut

The Cut, The Survey: The 6am Cut, Lunch Wrap and Closer emails will soon be relaunched in enhanced form. We want to ensure we’re providing only the most useful data, news and views — taking this short 2 minute survey would help us do that.

Markets: Central bank activity fuelled market action, with China spurring a rally in bank stocks with another move to prop up growth, while emerging market stocks climbed on hopes that the US Federal Reserve would stick to its dovish language in this week’s policy update. The recipient banks led the rally, with shares in Bank of Communications climbing 3 per cent in Hong Kong. The index of H shares – those of China-based companies traded in Hong Kong – rose 1.7 per cent. (FT’s Global Markets OverviewRead more

BuzzBaba

Is there evidence that Chinese/Cayman froth-float Alibaba has hired Buzzfeed to advise/train for a pre-IPO social media puff push? If so, should this be disclosed SEC-style?

On the first, maybe, on the second, dunno. You decide. Read more