Carney’s comments on climate change inspired a private sector task force to make recommendations on how companies should disclose climate risk and have finally been decided upon. Kate Mackenzie, a climate finance think tanker, explains why they could be a game changer.
Elsewhere on Tuesday, - “The sugar industry paid scientists in the 1960s to play down the link between sugar and heart disease and promote saturated fat as the culprit instead, newly released historical documents show,” - Prop trading, evidence from the crisis. - The newer, hotter, communism. Click through the pic (which is really begging for a caption comp) for more:
- How economics has evolved since the crisis
- Erica Grieder on the Texas model
- An experiment in Kenya
- Sebastian Edwards on why economic populism always disappoints
- Newly conceivable ideas in economics
- The brief history of Airbnb, and what’s next
- Steven Johnson on how play shaped the modern world
- Michael Mauboussin reflects on thirty years of markets, cognitive biases, luck vs skill, and more
- The social media we deserve
- Trading Places and those frozen orange juice futures
A reminder that you’ll have a chance to win a Kindle by recommending ways to improve Alphachat at www.ft.com/alphasurvey. Help us out!
FT markets round-up:“Efforts by global central bankers to reassure markets that there would be no rush away from accommodative policies helped fuel fresh gains for equities and a rally in US government bonds, although gold sank to its lowest level in nearly three years. Indeed, the gold price tumbled $53, or 4.3 per cent, to $1,224 an ounce, while silver fell 5.5 per cent to $18.56 amid further fretting over Fed chairman Ben Bernanke’s comments last week about “tapering” the central bank’s quantitative easing programme. The dollar, meanwhile, maintained its firmer tone, rising 0.4 per cent against a basket of currencies, with the euro below the $1.30 mark for most of the day after Mario Draghi, ECB president, said the eurozone economic outlook still warranted accommodative settings. His remarks echoed similar comments from David Miles and Sir Mervyn King of the Bank of England.” (Financial Times) Sluggish growth data give Fed cause for caution on tapering: “The US economy grew at an annualised pace of 1.8 per cent in the first quarter, significantly slower than previously thought, which could give the Federal Reserve some reason for pause as it weighs slowing its support for the recovery. The surprisingly sharp downward revision – from an earlier projection of 2.4 per cent first-quarter gross domestic product growth – offers evidence that US growth remained quite sluggish even as the Federal Reserve began contemplating tapering the tempo of $85bn in monthly bond buys.” (Financial Times)
The ECB has voiced support for imposing losses on the senior bondholders of Spain’s most damaged banks — a significant change of sentiment for the central bank, albeit one that was rejected by Eurozone finance ministers. The WSJ cites people familiar with the discussions who said ECB president Mario Draghi made the position clear at the eurogroup meeting last week. The ECB had previously opposed such bondholder haircuts during the 2010 bail-out of Ireland’s banks. The chief reason ministers rejected such a move was the Irish precedent, in which taxpayers bore the burden of repaying bondholders in the country’s failed banks. (Wall Street Journal) The 9% “temporary buffer” capital ratio for European banks will become permanent, says the European Banking Authority chairman. Andrea Enria told the FT “We want the banks maintaining this capital level and gradually moving to the Basel III full implementation. We will be asking the banks to develop capital plans to get there.” (Financial Times)
Comment, analysis and other offerings from Friday’s FT, Philip Stephens: Now the Franco-German questionGermany will have to learn leadership, and France followship. Both will find it a wrenching experience. The rules of the European game changed for ever with the reunification of Germany, says the FT’s Stephens. It has taken the euro crisis to spell out the brutal implications. One has to feel some sympathy for Angela Merkel. Germany’s chancellor has been excoriated in turn for absent and for oppressive leadership. At one moment she is said to be standing idly by while the euro burns, and at the next of issuing teutonic diktats about the terms of its survival. Germany, the rest of us have been reminded, has always been too big for Europe. The new German question asks whether Europe – whether it is the European Union or a more closely integrated eurozone – can find a new equilibrium now that Germany is so visibly the preponderant power.
At first sight, this looks mad. Lending to the UK government, in charge of the clapped-out British economy, now returns less than lending to Europe’s most successful country. Worse still, the yields on gilts are measured in sterling, a chronically weak currency, so not only does your money earn less, you’ll be repaid in something which history says will have been devalued by the time you get it back. Oh, and by the way, inflation is 3 per cent above the yield, making the internal devaluation painful, too. Something is seriously awry here, and two events this week offer clues to why German government 10-year paper yields more than the equivalent UK stock. On Wednesday the markets were spooked by the failure of an auction of 10-year German debt. Those in this arcane world struggled to understand what it meant, so there’s little hope for the rest of us. It’s either bad news, or very bad news, probably depending on whether you’re short of German bonds.
Comment, analysis, and other offerings from Tuesday’s FT, Gideon Rachman: America and Europe sinking togetherIn Washington they are arguing about a debt ceiling; in Brussels they are staring into a debt abyss. But the basic problem is the same, says the FT’s Gideon Rachman. Both the US and the European Union have public finances that are out of control and political systems that are too dysfunctional to fix the problem. America and Europe are in the same sinking boat. The debt debates underway in the US and the EU are so inward-looking and overwrought that surprisingly few people are making the connection. Yet the links that make this a generalised crisis of the west should be obvious.Sir Martin Jacomb: Greece has no future within the eurozoneThe Greek parliament has voted, but the crisis goes on. The European Union’s current policy has been driven by the political imperatives of preserving the euro and avoiding another banking crisis – but it will not yield an enduring solution, says Jacomb, chairman of Share plc and former chancellor of the University of Buckingham. The EU’s future depends on enabling its poorest member countries to regain their competitiveness – and this requires a very different approach. Everyone knows that lending more money to someone who is already heavily indebted, and has few realisable assets and woefully inadequate income or earning power, creates problems. Putting the repayment date off for 30 years simply ensures that no one in authority today will be around when the time comes.
Comment, analysis and other offerings from Monday’s FT, Analysis: Government bonds – A coinage debased It was a small decision but the symbolism was huge, write the FT’s David Oakley and Richard Milne. A few months before Ireland’s multibillion-euro bail-out, announced last week, Morgan Stanley quietly switched dealing in the country’s bonds, along with those of Greece, Portugal and Spain – together, the four “peripheral” countries often seen as the eurozone’s weaker members – from its sovereign debt desk to traders specialising in distressed financial assets, some of the riskiest investments out there.
We’ve had oil rigs. We’ve had diamonds. But now it’s time to beef up your investment portfolio with a little Aussie meat. The team behind the Macquarie Pastoral Fund are in London fund-raising, reports Opalesque. For those of you of an agrarian bent, the fund, which aims to raise between A$200m ($170m) and A$1bn, will own and operate sheep and cattle down under and is thought to be the first of its kind, combining both lamb and beef production publicly available for investment.