Izabella Kaminska joined FT Alphaville in October 2008, which was of course the best time in the world to become a financial blogger. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.
For one week in 2003, and one week only, she traveled on her own initiative to Kabul to report on Afghanistan’s emerging business and banking industry. She stayed with mercenaries, which was cool. She later sold the piece to a business magazine, which was also cool.
The experience, however, taught her the valuable lesson of risk/return trade-offs.
Today she prefers to report from the mean streets of Geneva, Switzerland — a notorious European risk-aversion zone.
Everything she knows about economics stems from a childhood fascination with ancient economies, specifically the agrarian land reforms of the early Roman republic and the coinage and price stability reforms of late Roman emperors. Her favourite emperor is one Gaius Aurelius Valerius Diocletian.
She studied Ancient History at UCL, and has a masters in Journalism from what was then the London College of Printing.
And yes, she is also a second-generation West London Pole (who likes mushroom picking, bigos and pierogi).
Elsewhere on Wednesday,
- Why Japan’s progress isn’t that bad if you account for the lack of Japanese.
- They’re still taking our (post office) jobs.
- Why Dell is going private. Read more
Hugh Small is an independent economic analyst and management consultant, who was formerly with US-based firms Arthur D. Little and A. T. Kearney. He blogs at mature economy.org, and has a running thesis that mature economies must be assessed differently to developing economies because they share very different strategic goals.
Furthermore, once you factor in the subtle differences that apply to developed economies, things like the UK productivity puzzle begin to look a little less mysterious. Read more
There’s an enlightening interview with Oleg Deripaska, chief executive of Rusal, in the Telegraph this Monday (h/t Neil Hume).
Turns out the metal tycoon believes aluminium may do better than expected this year, largely because much of the excess capacity that has plagued the industry has finally been cut back. Read more
Further dispatches from the Danish Institute for International Studies’ conference in Copenhagen on “Central Banking at a crossroads”.
Today we focus on the new age of collateral-based finance and the presentation given by Manmohan Singh (speaking in an independent capacity rather than as a representative of the IMF). Read more
FT Alphaville has just returned from the Danish Institute for International Studies’ conference on central banking in Copenhagen.
The theme was “central banks at a crossroads” — which we thought was particularly apt — and discussions ranged from collateral-backed finance and shadow banking to central bank independence. Indeed, many thanks to the DIIS for having us.
But one presentation, we would have to say, stood out more than most; that of Anat Admati, George G.C. Parker professor of finance and economics at Stanford Graduate School of Business, who’s out with a new book this month entitled “The Bankers’ New Clothes“. Read more
Elsewhere on Thursday,
- No, a robot won’t take your job, says robot.
- Some genuine creative destruction.
- Patents were a problem in Thomas Jefferson’s day too. Read more
Take note. This is an important observation from TD Securities, especially in light of all the talk that US Treasury/safe haven trades are dead in the water.
Our emphasis: Read more
The preliminary UK GDP estimate for the fourth quarter is out and it looks like there’s been a return to err.. contraction.
Via the ONS:
GDP was estimated to have decreased by 0.3% in Q4 2012 compared with Q3 2012. Output of the production industries was estimated to have decreased by 1.8% in Q4 2012 compared with Q3 2012, following an increase of 0.7% between Q2 2012 and Q3 2012.
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).
Elsewhere on Thursday,
- Inequality and demand.
- Martin Wolf, hippie.
- DNA as a storage vehicle. 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
BoJ adopts 2% inflation target and unlimited asset purchases || House Republicans introduce bill to temporarily extend debt limit || Rules to ease office-to-flat conversions || Jens Weidmann warns of currency wars || Deutsche to face US energy trading fine || European (lack of) writedowns questioned || China says top 10 steel mills to control 60 percent of capacity by 2015 || Rio rethinks Mozambique business || Markets Read more
John Kemp at Thomson Reuters has pointed us in the direction of colleague Clara Ferreira-Marques’ piece on the likely repercussions of Rio Tinto’s $14bn revaluation of aluminium and coal assets last week. As she notes, it’s almost certain that Rio Tinto’s hit will now set the stage for a wave of writedowns across the industry. Read more
It’s come to our attention that the precious metals investing community has been rendered a little “worried” by a sudden and sizable accumulation of inventory in the iShares physical Trust, the SLV for short. (H/T Kid Dynamite)
According to ZeroHedge, 572 tonnes were added to the trust in just one day. And while that does not represent a record for the fund, it is “the biggest one day addition of physical silver to SLV in ordinary course operations”. Or so, at least, ZeroHedge says (though we haven’t double checked the numbers ourselves at this point). Read more
Nothing short of an RNS fit for framing from Rio Tinto this Thursday morning:
Rio Tinto expects to recognise a non-cash impairment charge of approximately US$14 billion (post tax) in its 2012 full year results. These impairments include an amount of approximately US$3 billion relating to Rio Tinto Coal Mozambique (RTCM), as well as reductions in the carrying values of Rio Tinto’s aluminium assets (mostly Rio Tinto Alcan (RTA) but also Pacific Aluminium) in the range of US$10-11 billion. The Group also expects to report a number of smaller asset write-downs in the order of US$500 million. The final figures will be included in Rio Tinto’s full year results on 14 February 2013.
Forget about the $1 trillion coin debate.
The most exciting wonky discussion being had right now is between Steve Randy Waldman and Paul Krugman over whether “base money” and short-term debt are perfectly substitutable or not, and what that may or may not mean for central bank policy.
We confess that we have a bit of a vested interest here because for a long time we’ve been arguing much the same point as Waldman.
That’s not to say that Krugman is necessarily wrong; he may just be taking Waldman slightly too literally. Read more
Remember the whipsawing days of 2008? The days when commodity prices couldn’t get crazier?
Goldman may delay UK bonuses for tax cut || ESM bank bailouts might be more burdensome than expected || JP Morgan board may release Whale report critical of Dimon || Plan for pan-EU telco market || Goldman says ACA knew about Paulson short || UPS takeover of TNT Express collapses || Ferragamo CEO upbeat on 2013 || Markets: Global stocks start at fresh 19-month high Read more
It’s not perfect, we know. But the weekly CFTC derivative positioning report is still a useful barometer when it comes to gauging investor sentiment.
On which note here’s the breakdown of the latest report with respect to UST spec positioning, courtesy of TD Securities: Read more
Dark matter may more commonly be associated with physics, space exploration and Professor Brian Cox, but, according to Deutsche Bank’s FX strategist George Saravelos, there’s a good chance that it’s becoming a recognisable force in the world of foreign exchange too.
Of course, whilst you need complex structural analysis of the universe to detect the real dark stuff, in FX its presence is arguably more easily sniffed out. Mostly, says Saravelos, via the closer inspection of short-term derivative flows and the murky parts of balance of payment statistics. Read more
Some excellent market commentary from Olivier Jakob at Petromatrix on Friday morning regarding the current state of oil market (dis)equilibrium and the potentially precarious position of Saudi Arabia. Read more
Negative rates, as we’ve discussed before, are a funny thing.
On the one hand they can send an immensely powerful message. On the other hand they have the power to seriously and dangerously disrupt core economic mechanisms by magnifying the physical hoarding incentive — this helps to create a negative feedback loop that ultimately crowds out capital and leads to voluntary capital destruction. Read more
Elsewhere on Friday,
- The trouble with the coin is that it might work too well.
- Is China manipulating the cotton market?
- If the only constraint on growth in an IP economy is brain capacity…. Read more
An interesting debate is popping up regarding the topic of capital expenditure.
Take the latest from Societe Generale’s Andrew Lapthorne and team. They argued on Thursday that the commonly held belief that companies’ capital investing ratios have been falling, whilst hoarded cash pools have been going up, is inaccurate. Read more
Nowadays, the idea of not having an independent central bank is seen as being a bit backward. One could even say that central bank independence is widely accepted as the optimum set-up for any country’s monetary system, a reflection of its developmental status.
“Independent central bank? Check.”
“This country must be civilised. ”
Yet, can we really be so absolute about the matter? Read more
Last week, Kit Juckes at SocGen was one of many analysts who, after looking at the latest FOMC minutes, found fit to arrive at one overriding conclusion: the era of Risk-on, Risk-off (RoRo) investing is arguably coming to an end.
As he explained… Read more
Take note of the following story from IFR. It could turn out to be very important:
Jan 4 (IFR) – The yield-to-worst in the high-yield market dipped to its lowest level ever this week, as risk markets rallied on the fiscal cliff agreement. Dropping below 6% for the first time in history, the yield to worst on the Barclays high-yield index fell to 5.96% on Wednesday and pushed even lower to 5.90% on Thursday. This compares to 6.13% on Monday and 8.14% at the start of 2012. Read more
A big hat tip to Climateer Investing for helping us catch up on a Telegraph story from Ambrose Evans-Pritchard on Japan’s latest plan to stimulate itself out of trouble.
It, by the way, neatly sums up the problem associated with taking QE to the next level which, of course, for the Japanese authorities might have been buying equities outright rather than buying in ETF index form, which they’ve already been doing for a couple of years or so…
Think about it — a central bank en route to becoming a majority holder in a country’s primary equity ETF, is nothing more than a central bank en route to becoming the market. Read more
