From the Danish central bank:
Effective from 25 January 2013, Danmarks Nationalbank’s interest rate on certificates of deposit and the lending rate are increased by 0.10 percentage point. The discount rate and the current account rate are unchanged. Read more
It’s Andreas Georgiou, the head of Greece’s independent statistics agency, Elstat.
There may be signs that the wealthiest few zillionaires in emerging markets are outgrowing their love of bling or at least becoming more discerning.
But the fashion houses in Milan and Paris are unlikely to be losing sleep over that. Because for many millions in the EM, success and status remains all too bound up with having Chanel’s double-Cs on their handbag or an Ω on their wrist. Read more
FT Alphaville doesn’t tend to follow the nickel market too closely, but the research from Goldman Sachs on Thursday did strike us as interesting (our emphasis):
2012 nickel market summary: Weak demand growth and lower input costs As background, nickel underperformed in 2012, starting the year at $18,910/t, rising to $21,700/t in early February, and finishing the year at $16,998/t, declines of 10.1% and 21.4%, respectively. Overall nickel prices averaged $17,536/t in 2012, down 23.4% yoy from 22,900/t in 2011. Price weakness reflected a combination of soft global consumption growth set against significantly higher low-cost nickel pig iron supply in China, and, importantly, a shift down of the nickel cost curve in 2H2012 (largely reflecting lower energy and nickel ore input prices).
Many thanks to economist Scott Sumner for this guest post responding to a recent comment by John Kemp, a Reuters analyst. Scott’s native writing home is The Money Illusion.
John Kemp recently posted the following questions in a comment at FT Alphaville:
Three questions for advocates of NGDPLT targeting to answer:
From Credit Suisse on Thursday morning:
BREAKING NEWS: Stronger-than-expected euro area flash PMIs in January – except for France
The European Securities and Markets Authority has squinted at the amount of goodwill on the balance sheets of 235 listed European companies, and it’s not happy with what it found. Not only were the companies seemingly too optimistic, given prevailing economic conditions, but some of their disclosures contained insufficient detail. It’s the sort of thing that makes it hard for investors and analysts to understand what’s going on.
That’s the boring explanation. Let’s go over it again, but this time with pictures! Read more
Live markets commentary from FT.com
Apple stock sheds 10% on growth worries || Japan records its largest ever trade deficit || Jaguar profit warning dents Tata Motors || North Korea threatens new nuclear test || Fortescue predicts iron ore price drop || South Korean growth hits three-year low || Google: Feds requesting more user data || Markets: Shares mixed on divergent data Read more
Elsewhere on Thursday,
- Inequality and demand.
- Martin Wolf, hippie.
- DNA as a storage vehicle. Read more
Asian equities were mixed after a manufacturing survey pointed to a further acceleration of China’s economic recovery, while technology stocks came under pressure following Apple’s disappointing earnings report. The Nikkei jumped 1.3% in mid-afternoon trading as the yen weakened sharply on news of Japan’s record trade deficit. (Financial Times)
Japan’s 2012 trade deficit was its biggest ever: The deficit reached Y6.9tn ($77bn) as the cost of importing fuel rose following the Fukushima disaster, a strong yen, and frictions with China weighed on exports, bringing them 5.8% lower than the previous year, compared to expectations of a 4.2% decline. Prior to 2011, Japan had not recorded trade deficits since the 1980s. (Financial Times)(Reuters) Read more
And the preliminary HSBC PMI figure for China this month is…wait for it…
… 51.9. Read more
ROUND-UP
Apple’s earnings disappointed with net profit of $13.1bn, or $13.81 per diluted share, flat on the year. Net revenue was $54.5bn compared to $46.3bn a year ago, and Apple sold 47.8m iPhones in the fourth quarter. Both numbers were below expectations, reviving fears that the US smartphone market has matured and that the iPhone’s popularity has peaked (Financial Times). Read more
The first LTRO repayment opportunity is fast approaching. David has already considered how it may or may not impact European lending rates, including the chances of Eonia rising significantly if the repayment is larger than expected.
Yet as we also noted, this is hardly the key concern. Read more
Are you in the equities business, needing something to surpress your natural optimism? Ditto ETF traders, those in securitised derivatives, even bonds? Click the following images for the instant, full-sized depressive effect… Read more
Some might say it’s labour hoarding; some might say it’s “flexibility”; some might say it’s the gutting of the City. Many would think the UK productivity puzzle goes on, and some would just ponder the strong showing of full-time jobs in the latest figures.
Here’s the view from Nomura’s Philip Rush, with some charts (click to enlarge)… Read more
Just passing along this chart (click to enlarge) we came across on page 41 of the big ILO global employment report:
Nomura’s Richard Koo is back, suprising us with another note following quickly on his last. But we can see how it happened. Heck, some people are suggesting that the West’s balance sheet recession is over. Read more
Commenting on the survey findings, Bank of America’s Chief Executive Officer Brian Moynihan said, “Leaders around the world recognize the value and need for greater global collaboration.”
Moynihan displays a certain lack of concern about the 10 per cent of “global decision-makers” who were found to be riding the Steamboat Lonewolf up the Wantspacetothinkippi River in a single occupancy first class cabin, quietly hatching plans to take over the world, according to a survey commissioned by the bank. Read more
Given the boost that Goldman’s economists gave to the nominal GDP level targeting movement when they endorsed the idea near the end of 2011, it’s probably a good idea to listen to them when they write about the subject (whether you agree with them or not).
NGDPLT itself has many more high-profile evangelists now than it did then: the Fed adopting an Evans Rule was the latest shift in its direction, and of course the idea is being openly debated in the UK after Mark Carney suggested it would be more potent than flexible inflation targeting. Read more
Live markets commentary from FT.com
Apple pre-earnings || Correlation, like kryptonite || Severfield-Rowen gets grated || The UK to vote on EU in 2017, says Cameron || Job cuts at Barclays || Microsoft in talks over Dell buyout || IBM beats || Ireland preps for OMT || Fewer class action suits in the US Read more
A new and scary note is out about China’s risk from GMO’s Edward Chancellor and Mike Monnelly, who make a good argument that China’s financial system is showing many of the hallmarks of a not-too-distant bubble:
China’s thriving shadow banking system has much in common with the American version, which thrived before Lehman’s collapse: trust loans that finance cash-strapped property developers have a whiff of the subprime about them; wealth management products that bundle together a miscellany of loans, enabling the banks to generate fees while keeping loans off balance sheet, bear a passing resemblance to the structured investment vehicles and collateralized debt obligations of yesteryear; while thinly capitalized providers of credit guarantees are reminiscent of past sellers of credit default insurance.
The brutalist architecture movement has broken Severfield-Rowen.
This Yorkshire-based structured steel specialists, which counts the Olympic Stadium and the Shard amongst its successful projects, warned on profits on Wednesday and parted company with its chief executive, Tom Haughey. Talks are also underway with the firm’s bankers… Read more
A lot of people think you can just throw a bunch of chaos into a situation and walk away. That is not the case. The most you’re going to get outta that is mayhem. Good disaster, like really muah [kisses fingers], should be catastrophic and that, my friends, takes preparation and patience.
In the case of the synthetic credit portfolio of JPMorgan’s CIO, they had a good three months to build positions that would subsequently cause billions of dollars of losses. Our previous post outlined how, according to the bank’s Task Force Report, the CIO was going to unwind profitable high yield shorts at the beginning of 2012. Instead, the unit ended up building those positions further, along with long positions in the Markit CDX.NA.IG.9 index that were meant to hedge and finance them. Read more
The WSJ talks of “iPhone-like hype” around the next Samsung smartphone model. And Bloomberg notes that in China, iPhones are way behind. It must be that time again!
Yep, Apple reports its first-quarter earnings at 5pm EDT, so feast your eyes on this five-year chart in the meantime : Read more
Elsewhere on Wednesday,
- Is there a Google ‘x-phone’ in the pipeline?
- Keep banks out of macro, implores Sumner.
- Fundamentals vs panic in a crisis. Read more
The new Rio boss has a few nice words about his predecessor, followed by a flash of steel, in a letter to staff. And it’s about all you’re likely to hear from Walsh until annual results on Valentines Day. Read it after the jump: Read more
Older entries
1Dying markets, illustrated
2NGDP level targeting: Yellen it from the rooftops, but nobody heard
3The practicalities of the currency wars
4Positioning for credit losses, the JPMorgan way
5Recoveryless jobbification
Show more6Long-term pessimism, short-term frothiness, and the recovery in world wealth
7Japan 2.0 (and that's a target, mind)
8Koo: I'LL tell YOU when we're delevered!
9SEC bars Egan-Jones
10Guest post: Scott Sumner responds on NGDP level targeting
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