Monthly Archives:

June 2010

Some thoughts from the Barclays Capital Inflation Conference

I went to the excellent Barclays Capital Inflation Conference a couple of weeks ago – although titled “inflation”, a lot of the conference’s content concerned the growing fears about the solvency of western governments.  In particular, whilst the US Treasury market is currently seeing a massive flight-to-quality bid (10 year yields are now down below 3%) I came away worrying that it’s difficult…

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Some thoughts from the Barclays Capital Inflation Conference

I went to the excellent Barclays Inflation Conference a couple of weeks ago – although titled “inflation”, a lot of the conference’s content concerned the growing fears about the solvency of western governments.  In particular, whilst the US Treasury market is currently seeing a massive flight-to-quality bid (10 year yields are now down below 3%) I came away worrying that it’s difficult to see …

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The European Central Bank withdraws the 12 month LTRO, just as banking system strains re-emerge

A report in the FT today (may need free registration) highlights the lobbying of the ECB by Spanish banks to renew a one year funding facility known as the Long-Term Refinancing Operation (LTRO) that comes to an end this week.  Banks borrowed €442bn from the ECB under the facility last year, at a time when borrowing in the market was either impossible or too expensive. When the facility closes,…

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Eurozone Edging Ever Closer to Political Union

The ECB recently published a paper on its website detailing its preliminary proposals to reinforce economic governance in the euro area. The paper was split into three main sections. (1) Strengthening surveillance and greater prevention/correction of excessive deficits and debts. (2) Improving the surveillance framework and the correction of economic imbalances, and (3) a framework for crisis m…

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A short video about the Austerity Budget

Yesterday’s emergency Budget will lead to a UK fiscal contraction bigger than any we have seen in our lifetimes.  In this 8 minute video, I look at the implications for the UK bond markets, inflation, and the economy.

Watch the video here

In brief, the UK will comfortably keep its AAA credit rating; the Bank of England’s Monetary Policy Committee will have an inflationary headache as a result o…

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China announces increased flexibility in its exchange rate

There was some big news over the weekend, with the People’s Bank of China announcing that it was going to allow some flexibility in its exchange rate. The statement from the BoC points to the global economic recovery and domestic growth as the background to pursue further exchange rate flexibility. Markets have reacted positively to the announcement, with corporate bond indices opening up tight…

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Free lecture series at the London School of Economics

Being the intellectuals that you are, we thought you might find some of the upcoming events being held at the London School of Economics (LSE) of interest. On the 30th of June they have Andrew Ross Sorkin discussing the development of the financial crisis since the publication of his book Too Big to Fail, and what he thinks the future may hold.  We’ve mentioned his book numerous times on the bl…

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European growth is not sustainable so get used to higher unemployment rates

Much has been made of the fact that the European economy (since the creation of the European Economic and Monetary Union or EMU)  has exited the worst recession in its existence. Many have pointed to the early actions of politicians and government officials as a reason Europe avoided a depression-like scenario. You might not know it or be able to feel it, but Europe is actually growing again. W…

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Alistair Darling – a Chancellor who will go down in history (in a good way); and was Margaret Thatcher really a public sector axewoman?

Now that the new UK government is bedding in and getting ready to unleash austerity upon us, I thought I’d quickly look back at the last Labour government and tell you something that you won’t want to hear: the last Chancellor Alistair Darling did a very good job.

There were three significant tests given to him during his 3 year Chancellorship.  Of those, I think that two were passed with flyin…

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A Bond Vigilante visits the Bank of International Settlements – Video update

Anyone who has had a flight delayed or cancelled as a result of the volcano in Iceland will know how frustrating it can be. For someone in that position, there isn’t much that can be done about it. Ben Lord, Fund Manager of the M&G High Interest Fund, recently found himself stuck in Basle, Switzerland on the morning after the announcement of the eurozone bailout package. Rather than haggle with…

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