- Nouriel Roubini outlines the 2020 recession risk
- Will Davies on populism, data and experts.
- Robert Kaplan on jobs, oil and credit
- Mithril Capital's Ajay Royan on the next growth frontier
- Banking culture since the crisis
- Weak spots and worries in the global financial system
- The most complicated debt restructuring in history
- Yanis Varoufakis on “radical Europeanism”, erratic Marxism and... Pamela Anderson
- Alphachat on immigration: This time is (mostly) like the others
- Our Bond villain technocracy
- Is the eurozone fixable?
- Could climate change spark the next financial crisis?
- Mehrsa Baradaran on “opportunity zones”
- The math wizard who became a customer loyalty scheme guru
- Alphachat is back! Vol 2.
- Alphachat is back! Vol. 1
- Jim Millstein discusses the financialisation of America
- Alphachat is on hiatus this week
- Benn Steil explains the Marshall Plan
- Marcel Fratzscher on the dark side of the German economy — now with transcript!!
Notes for today’s show: Oil, spending and saving[1:47]
GMO’s Jeremy Grantham famously speculated in 2011 that when it came to commodities and resources we were very possibly witnessing the most important economic event since the industrial revolution: From now on, price pressure and shortages of resources will be a permanent feature of our lives. This will increasingly slow down the growth rate of the developed and developing world and put a severe burden on poor countries.
Barclays’ profits are down by a quarter, Steinhoff concedes defeat in the battle for Darty, the BHS blame game is heating up. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Because if his Royal Highness the prince wants the world’s largest sovereign wealth fund — then who’s to say no? As for the Arab and Islamic depth, we have the Qiblah of Muslims. We have Medina. We have a very rich Islamic heritage. We have great Arab depth. The Arabian Peninsula forms the basis of Arabism. The kingdom constitutes a large part of it. That issue has not been exploited in full. We have a pioneer investment power at the level of the world. Today, you see that many statements are being made, including statements indicating that the Saudi Sovereign Fund will be the largest fund in the world by far, compared to the other funds. That will be the main engine for the whole world and not only the region. There will be no investment, movement or development in any region of the world without the vote of the Saudi Sovereign Fund.
Commodity curve purists insist that long-term futures prices must not be confused with market forecasts. People who do that are deemed commodity dummies because long-term futures are said to reflect the price at which market participants are prepared to buy or sell commodities in the future today. That generally means prices that make sense for them right now, but not necessarily those they expect in the future. As a result, certain assumptions can be made about curve structures. If long-dated futures are very much higher than spot prices, the market is offering premiums to those who have the capacity to take delivery today and store the oil until the future. It’s a dynamic that indicates an abundance of oil in the spot market today, rather than an expectation that prices will be higher tomorrow. It’s known as a contango market and is generally a bearish signal.
We recently had a chance to chat with a senior Canadian economic policymaker. Among other topics — he estimated fiscal stimulus would boost growth by around half a percentage point in 2016 and by a full percentage point in 2017 — we discussed his belief the depreciation of Canada’s currency could help export growth offset some of the weakness in the oil economy. What follows is an attempt to assess Canada’s progress so far. For context, the Canadian dollar has lost about 21.5 per cent of its value against the currencies of its trading partners since the most recent peak in mid-2011, although the loonie had dropped as much as 31 per cent before the recent rally in risky assets:
Finance is the wrong business for people committed to the idea of objective truth. No asset is inherently worth anything, just some multiple of the income you think it will produce over time. Both the earnings forecast and the multiple can change at a moment’s notice — sometimes because the outlook for the future has genuinely changed, but often for other reasons.
A well-rounded education should give some understanding of economics and finance. So, in principle, it’s a good thing there are organisations such as America’s Council for Economic Education, a non-profit backed primarily by large financial and industrial companies aiming to train teachers and provide resources for children to understand basic concepts. But a little knowledge is a dangerous thing, and our recent experience with the CEE’s quiz on “economic literacy” — thanks to the Federal Reserve Bank of Richmond for tweeting the link — suggests this education effort could be doing more harm than good. On the bright side, it’s still possible to learn something useful from the quiz by closely studying why some of its questions are so bad.
Back in October, 2015, Bloomberg’s Tracy Alloway and I struck an OTC futures deal over a teeny, tiny vial of crude oil, which Tracy for some reason felt compelled to nickname “Williston”. Read about it here. I now plan to default on this contract (a ladies’ agreement, witnessed by “the world” due its publication on Bloomberg) and this is a public notice explaining my reasons for doing so.
Oil services group Petrofac and equipment supplier Weir have both suffered profit slumps due to the slide in crude, Panmure Gordon’s CEO is stepping down, Aston Martin is opening a new factory in Wales, Nissan has developed self-parking office chairs. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
BHP Billiton has slashed its dividend, Intercontinental Hotels is paying a $1.5bn special divi, Mark Carney is telling MPs about the Bank of England’s Brexit plans. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Imagine someone told you about a country where real output per person is at an all-time high and growing at an increasingly rapid pace, its employment rate is at the highest level in decades, the country’s housing sector is on fire, and its current account surplus is about 6 per cent of GDP. In the absence of other information, would you say this country should be: If you answered yes to the above questions, congratulations! You’ve just described the behaviour of the Sveriges Riksbank. From their policy announcement on Thursday (our emphasis):
Chip designer Arm has etched out a 24 per cent rise in profits, Tullow Oil has shrunk losses, Janet Yellen is to testify to Congress. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.