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09 августа, 17:23

Bank Regulations: An Existential Threat?

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke. Why was international financial officialdom so eager in late 2008 and indeed through 2009, 2010 and later, to raising banks’ capital-asset ratios? To answer this question, there is more to the story than meets the eye.  The starting point for the global bank capital obsession is to be found in Britain and its infamous 2007 Northern Rock affair. It was this British fiasco, rather than the September 2008 Lehman Brothers bankruptcy, that was the true beginning of the Great Financial Crisis and of the Great Recession which followed.   On 9 August 2007, the European wholesale money markets froze up, after BNP Paribas announced that it was suspending withdrawals on three of its money market funds. These funds were heavily invested in U.S. subprime credit instruments, which had suddenly become difficult to trade and value. In the preceding two decades, many banks and financial intermediaries, in a number of countries, had financed their assets by borrowing from wholesale sources rather than from retail branch networks. In the U.K., Northern Rock, which had once been a cautiously-managed building society in mutual ownership, was one of these organizations. With the wholesale money markets closed to new business, Northern Rock could not issue new securities or even roll over maturing debt. As significant liabilities were coming up for redemption, it faced a serious challenge in funding its business. In the years leading up to August 2007, Northern Rock had been consistently profitable, with sufficient capital and liquidity to meet regulatory norms. Readily available funds from the wholesale market had facilitated Northern Rock’s rapid expansion from its demutualization in 1997; however, by mid-2007, it was highly leveraged (with assets that were over 60 times equity capital), and threatened by its inability to secure new wholesale finance.  Unable to secure the necessary short-term funding, Northern Rock informed its regulator (the Financial Services Authority) of its problems. Top FSA staff sought for potential buyers for Northern Rock, and they soon found one in the shape of Lloyd’s Bank. But there was an inherent issue: Given that the money market was paralyzed by a lack of confidence and the fact that Lloyd’s Bank had a similar reliance on the interbank market for financing, Lloyd’s board was not 100 percent certain that it could obtain sufficient retail deposits or an interbank line to fund both its existing business and the purchase of Northern Rock. For the deal to go ahead, Lloyd’s needed a standby loan facility perhaps as large as £45 billion. With the money market closed, only the Bank of England (BoE) could provide this facility.  By the end of the first week in September 2007, all of the FSA’s senior staff and Paul Tucker, the Bank’s senior executive for markets, wanted the Bank to provide Lloyd’s with a standby facility. But, there was an obstacle: The governor of the BoE, Mervyn King would provide no help. To quote from Ivan Fallon’s book Black Horse Ride, “‘No,’ he [King] said decisively and abruptly, ‘I could not in any way support that. It is not our job to support commercial takeovers. I’m not prepared to provide any liquidity on that basis’”. The truth is that King – who had come from a modest background in England’s unremarkable West Midlands – loathed bankers and the City of London. The crisis gave King an opportunity to translate the loathing into action. Fallon quotes one banker as saying, “Mervyn saw his job as being to teach the banks and the markets a lesson.” Somehow or other, the tensions between the various players could not be kept quiet. The situation became so desperate that Northern Rock had to be provided with an emergency loan facility from the BoE. Without that, it would no longer be able to pay cash over the counter to retail depositors (or to transfer money to other banks via the online service at its website, which crashed). However, the British Broadcasting Corporation (BBC) bungled the announcement of the facility, provoking a massive run disproportional to Northern Rock’s potential losses. The BoE was obliged to lend Northern Rock tens of billions of pounds to preserve the convertibility of bank deposits into notes. On 17 September 2007, the Chancellor of the Exchequer, Alistair Darling, decided to announce a state guarantee on Northern Rock’s deposits, which brought the run to an end.   The underlying issue raised by the Northern Rock affair was the eligibility of commercial banking organizations, which are profit-making (or at any rate profit-seeking), for loans from the central bank. The traditional understanding in the U.K. before 2007 had been that solvent banks, and certainly solvent banks that had complied with regulations, could seek central bank help in funding their businesses if normal market sources (such as the interbank market) had become unreliable. Usually, they would have to offer good collateral and the central bank would be expected to charge a penalty rate. The standard vocabulary in these cases is that the central bank would be a “lender-of-last-resort.” In no way did this imply that the central bank would be indifferent to the concerns of all stakeholders, including shareholders.  Although in practice the BoE was involved in two big lender-of-last-resort episodes during his governorship (Northern Rock in September 2007, and RBS and HBOS in October 2008), King did his damnedest to keep loans to commercial banks off the BoE’s balance sheet altogether. The implications of King’s position are dangerous for banks and arguably for the entire financial system in a capitalist economy. King maintained that it was not the central bank’s role to lend to commercial banks on a long-term basis. Rather, that was a job only for the private sector or taxpayers acting via the government. By the phrase “on a long-term basis,” King understood a period of six months, taking his cue from a European Commission “decision” on 5 December 2007. If a bank could not find alternative finance for its assets once a last-resort loan has lasted six months, that bank would have to seek and find new money from the private sector or be taken into state ownership. By extension, the state would be entitled to seize the whole business with no compensation to shareholders. Exactly six months after Darling’s announcement of the state guarantee, the state did just that. Northern Rock’s assets were seized 17 March 2008. In the weeks after the Lehman bankruptcy, much of the British banking system was in exactly the same position Northern Rock had been in autumn 2007. They had faced difficulties in rolling over liabilities in the wholesale markets and might not have been able to fund their businesses. Meanwhile, because of the line being taken by the BoE under Mervyn King, they knew that any borrowings from it were time-limited, and might prove suicidal for managements and shareholders.  The only remaining private sector option was to raise new equity or bond capital by the sale of securities. Here was the connection between King’s attitude towards central bank loans to commercial banks and officialdom’s insistence on extra bank capital as the solution to the crisis. Because in King’s judgement central banks were not to lend to commercial banks except for a few months, and even then on a frankly unfriendly basis, commercial banks would be obliged to raise more capital if they could not otherwise finance their loan portfolios. By this reasoning, bank recapitalization was a priority—indeed, an absolute priority—in the fraught circumstances of late 2008.  The Labour government in power during the crisis period, with Gordon Brown as Prime Minister and Alistair Darling as Chancellor, did have other sources of advice. Nevertheless, as governor of the BoE, King was in an immensely powerful and influential position. It seems that his point of view managed to sway Brown, although possibly not Darling to the same degree. At the G20 meetings in late 2008, Brown was fully committed to bank recapitalization as the right answer to the crisis. Brown, in the prologue to his book, Beyond the Crash, judged that “doing nothing was not an option” and that “only one possible course of action remained.” He almost glorified the moment when he underlined twice “Recapitalize NOW”. Although Brown did not like King on a personal basis, he had plainly absorbed King’s message. Both men deemed loans from the BoE to the U.K.’s commercial banks as a form of “taxpayers’ money,” and both were suspicious of banks and bankers. If extra capital was the correct response to banks’ funding strains, and if the stock market was not prepared to buy newly-issued securities from the banks, any large-scale official intervention had to take the form of capital injections from the state. If current managements and shareholders opposed such injections on the grounds that the new money diluted their interests, the British government could—and in fact did—threaten nationalization without compensation. In short, Gordon Brown decided to indulge in a sophisticated form of bank-bashing, and perhaps surprisingly, managed to attract many like-minded souls on the international financial scene. Hardly anyone among the politicians, regulators, and central bankers in the peak supranational organizations (the BIS, the IMF, and so on) offered a word of dissent as the British argument for bank recapitalization was introduced and developed at the G20 meetings in late 2008. And so, officialdom embraced a dangerous set of pro-cyclical regulatory policies.  As Marcus Agius, chairman of Barclays, told his shareholders, the banks now faced “an existential threat”. And I would add, so did the economies that embraced the bank recapitalization mantra.  This piece was originally posted on Forbes. 

09 августа, 16:35

10 Years Ago Today Money Markets Seized Up, The ECB Bailed Out BNP Paribas, And The Crisis Started

On this day 10 years ago, money markets started to seize up, requiring heavily-coordinated central bank action that launched an extraordinary period of central bank activity that is still in full swing today. As DB's Jim Reid reminds us, the announcement by BNP Paribas that they were closing three funds linked to US mortgages became the catalyst for the collapse of trust in money markets over the coming days and weeks. Just over a month later we had the bank run on Northern Rock. As an example of the impact BNP's announcement had - and how rigged Libor had been throughout the days preceding the crisis to telegraph stability - 3 month dollar Libor, which hadn't moved all year, spiked 20bps in the ensuing 48 hours. Also on this day 10 years ago all the major central banks were forced to inject liquidity, with the ECB doing so for the first time since 9/11, effectively ushering in what would later become known as the Great Financial Crisis. As Bloomberg continues this less than marry stroll down memory lane, the ECB's €95 billion emergency loan to banks on Aug. 9, 2007, "was the initial response to a financial crisis that would force the Frankfurt-based institution to expand its balance sheet by trillions of euros." The ECB - together with international peers such as the Federal Reserve and the Bank of England - took center stage in an unprecedented battle against bank failures, recessions and sovereign-debt turmoil that changed the economic landscape and forced a complete rethink of what monetary policy can and should do. Here is the blow by blow of events on that fateful day: on August 9, 2017 years ago, ECB President Jean-Claude Trichet was in St. Malo, northwest France, for a sailing holiday when the U.S. subprime crisis reached Europe in full swing, forcing French bank BNP Paribas SA to halt withdrawals from three investment funds. Using faxes and telephones, he and his colleagues crafted the central bank’s response - a statement that officials were monitoring money-market tensions, followed by a pledge to lend financial institutions as much money overnight as they asked for. Demand for the so-called fine-tuning operation exceeded the 69.3 billion euros given on the day after the Sept. 11 terror attacks. The ECB made three similar offerings in the days through Aug. 14. However, in a harbinger of the difficulties it would face in the coming years, the ECB’s would be hampered by an incomplete currency zone weighed down by infighting and paralysis. Ironically, just days earlier then presidents of the ECB, Jean-Claude Trichet, and BOE, Mervyn King, had their own "subprime is contained" moment: Trichet had warned of a repricing of risks since 2005, but in the summer of 2007, he didn’t heed the signs of trouble, and neither did his peers. Just one week earlier, the Frenchman had summoned the press to an impromptu briefing to telegraph that an interest-rate increase was imminent. Mervyn King, Bank of England governor at the time, was also sanguine, declaring on the day before the market turmoil struck:   “So far what we have seen is not a threat to the financial system,” he said. “It’s not an international financial crisis.” It was - and it turned out to be the biggest international financial crisis in history. And Looking back exactly one decade later at what this day unleashed, James Nixon a former economist at the central bank, who now works for Oxford Economics in London said that “the ECB has literally thrown the kitchen sink at the crisis,” adding that “they are deep, deep into non-standard monetary policy, and getting back from there is a process that’s going to take a decade. It’s going to be extraordinarily protracted.” One look at the chart below shows how deep inside bizarro world the central bank with the negative interest rates has gone: For those traders who were active at the time, and who enjoy visual trips down the memory hole, here are ten charts from Goldman recapping the ten years of the crisis: * * * Ten years on, Bloomberg adds, as the world’s central banks slowly unwind the unprecedented stimulus their economies came to rely on, the ECB is a different institution... or so it would like to believe. Policy makers of the old school have been replaced by a new generation, Trichet’s insistence to never pre-commit gave way to Draghi’s forward guidance, and the Governing Council’s remit was expanded to include banking supervision. Draghi, who took over the ECB baton from Trichet in late 2011, may signal his future course of policy in Jackson Hole, Wyoming, where he will attend the Fed’s annual symposium on Aug. 24-26. Looking optimistically ahead, "with the recovery finally holding up after years of stimulus and hard-fought economic reforms", Bloomberg writes that central bankers have started to contemplate a return to more normal policies. One of many milestones on that path is expected in the fall, when ECB President Mario Draghi may offer an outline of a gradual exit from a 2.3 trillion euro bond-buying plan. This will take place at a time when the market is habituated to not only ultra-low interest rates, but over $10 trillion in asset purchases by central banks over the past decade. Whether it will work remains to be seen. And while we wait for the climax to the greatest monetary experiment in human history, Jim Reid notes that one of the great ironies of the period since is that returns in major global assets have been very healthy albeit with some major exceptions. Of the 38 major global assets we usually track for this purpose 27 are higher and 11 lower in dollar adjusted terms. Top of the pack is the S&P 500 (+106%) followed by US HY (+95%) and Gold (87%). Other DM fixed income markets are generally in the 35%-80% range. The Dax (+38%) leads the way in an underperforming European equity story. The Stoxx 600 is up 22% and the FTSE 100 only 12% higher in Dollar terms largely due to a 36% fall in Sterling over the period. Of the 11 assets that has seen negative dollar returns over the last 10 years the highlights are Greek equities (-82%), Stoxx Euro Banks (-54%), Portuguese equities (-42%), the CRB commodity index (-42%), Italian equities (-33%), and Oil (-32%). EM equities were up 29% but Chinese (-2%), Brazilian (-26%) and Russian (-32%) bourses were selective under-performers. Ironically, as even Deutsche Bank admits, while there has - so far - been little economic impact from this unprecedented decade of central bank interventions, with central banks lamenting daily the lack of (wage) inflation, so critical to erase the record $217 trillion in global debt...   ... this unprecedented takeover of capital markets by central planners has led to record asset price inflation over the last decade, even if it hasn't been universally seen across the board. "There have been clear winners and losers" Jim Reid notes, and asks "were you the one who during late afternoon on August 8th 2007 decided to switch out of their portfolio of Greek equities to buy the S&P 500 and then go on a 10 year sabbatical? If you were then I have nothing but respect, admiration and jealousy towards you. If you did the reverse trade then I suspect you might not be reading this now but you have my sympathies!!" Finally, when previewing the question of what we will be writing about on August 9, 2027, the jury is still out: as UBS chief European economist Reinhard Cluse writes, “If you look at all the pain which the ECB had in rolling out these facilities - the crises, the politics, the time it took them to start QE - perhaps this was also necessary in the ECB’s growing-up process. But now that these policy tools have been invented and implemented, the effect could be that in the future - even after having normalized - we will reach for these instruments again and that they might not have been as extraordinary as we once believed them to be.” Reach for them we will, and if this time they fail to achieve the same "stabilizing" results which have come at a tremendous cost to efficient markets, then our expectation that we will be writing on this day ten years from today, may prove to be overly optimistic...

05 августа, 11:03

UK must have credible 'no deal' Brexit plan – ex-Bank of England chief

Mervyn King says more work is needed to show EU that UK is serious about walking away if no agreement is reachedThe UK needs to be better prepared for a “no deal” Brexit to show Brussels there is a “credible” alternative should the negotiations fail, a former Bank of England governor has said.Mervyn King, who served as Bank of England governor for a 10-year period, including the 2007-08 financial crisis, said failing to agree a trade deal was “not the first preference of anybody” but more work needed to be done to show the European Union that the UK was serious about walking away if there was no agreement. Continue reading...

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03 августа, 09:25

The day the credit crunch began, 10 years on: 'the world changed'

Key players in the drama recall the day that sparked the first UK bank run in 140 years and heralded a global financial crisis The ninth of August 2007 was the first day of Mervyn King’s holiday. The governor of the Bank of England spent it at Lord’s cricket ground where he was interviewed by the former England cricket captain Michael Atherton. While Lord King was watching the cricket, the French bank BNP Paribas announced it was freezing the assets of hedge funds that were heavily exposed to the US sub-prime mortgage market.It was the first and last day of King’s holiday. He would not have another for several years. Within six weeks, members of the Bank’s court – its oversight body – were being whisked into the back entrance of Threadneedle Street in a people carrier with blacked-out windows to be told that money was haemorrhaging out of Northern Rock. Continue reading...

05 июля, 20:00

Beware The Predictions Of "Experts" Like Janet Yellen

Authored by Ryan McMaken via The Mises Institute, Speaking in London, Federal Reserve chair Janet Yellen Tuesday predicted that the “the system is much safer and much sounder” and explained that the Federal Reserve is prepared to deal with numerous enormous shocks to the economy. In her conversation with Lord Nicholas Stern, Yellen also went on to list the reasons that, thanks to central bank intervention, there is unlikely to be another financial crisis “in our lifetimes.” For those who have lived through more than one business cycle, however, alarm bells tend to go off every time an economist, central banker or high-ranking government official declares that there’s little to no danger of economic turmoil in the near future. [ZH: She was not alone...The Bank of England's governor Mark Carney wrote in a letter to The G-20 this week... “A decade after the start of the global financial crisis, G20 reforms are building a safer, simpler and fairer financial system. The largest banks are considerably stronger, more liquid and more focused.” “We have fixed the issues that caused the last crisis. They were fundamental and deep-seated, which is why it was such a major job.” Well, here’s what Carney’s predecessor at the BOE, Mervyn King, said in 2007... But I think against that it is very important to set a very, very key point here, which is that our banking system is much more resilient than in the past. Precisely because many of these risks are no longer on their balance sheets but have been sold off to people willing and probably more able to bear it. So much for that.] *  *  * There is a long history of spectacularly bad predictions being made shortly before economic crises. Famously, shortly before the Crash of 1929 — one of the earlier crises that occurred on the Federal Reserve’s watch — Herbert Hoover proclaimed that “We in America today are nearer to the final triumph over poverty than ever before in the history of any land.” But, we certainly don’t have to go back that far. Indeed, in the late 1990s, it became nearly routine to hear economists announce that “the internet changes everything” and “the business cycle is dead.” Economist Rudi Dornbusch — a close associate of current Fed vice chair Stanley Fischer — even wrote a July 1998 column in the Wall Street Journal titled “Growth Forever.” Dornbusch concluded that the possibility of an imminent recession “is remote” and the country “will not see a recession for years to come.” So sure of the benefits of the “new economy” was Dornbusch, in fact, that he declared, “This expansion will run forever.” Then came the dot-com bust of 2001. After that came a short expansion from 2002 to 2007. After that came the Great Recession. Meanwhile, from 2000 to 2015, according to the federal government’s data, real median household income was flat. Only over the past two years have we seen any of that expansion that many were venturing to say was permanent back in the late 1990s. Economists and policymakers were no more insightful when examining the possibility of a new crisis post-2007. In 2005, for example, Milton Friedman could have been paraphrasing Yellen’s Tuesday comments when he concluded that “the stability of the economy is greater than it has ever been in our history. We really are in remarkable shape.” Friedman went on to give Alan Greenspan credit for the expansion. In early 2007, Ben Bernanke predicted, “We’ll see some strengthening in the economy sometime during the middle of the new year.” As late of mid-2007, Bernanke was downplaying any problems associated with the sub-prime housing market, allaying any fears of a bubble or bust and claiming, “I don’t know whether prices are exactly where they should be, but I think it’s fair to say that much of what’s happened [i.e, enormous home price growth during the housing bubble] is supported by the strength of the economy.” If housing bubbles do prove to be a problem, Bernanke concluded, it’s “mostly a localized problem and not something that’s going to affect the national economy.” The US would officially begin to contract in December 2007, followed by a financial crisis the following autumn. Even on the eve of the crisis — in September 2008 — John McCain announced that “the fundamentals of our economy are strong.” A year later, the unemployment rate would reach 10 percent, foreclosure rates were surging and total employment would collapse from 116 million to 107 million. Employment would not return to pre-crisis levels until late 2013. Millions of workers would need to change careers, be retrained, scratch for other forms of income to avoid foreclosure or eviction and put off retirement indefinitely. The economy was so weak for so long, in fact, that the Fed felt it necessary to keep the key target interest rate near zero for seven years to add “stimulus.” Of course, just because Janet Yellen says the economy won’t experience a crisis anytime soon doesn’t mean a crisis is imminent. A truly strong economy isn’t going to be “jinxed” by a declaration that things are fine. On the other hand, given the record of eminent economists and Fed board members in the past, Yellen’s predictions are hardly anything that should inspire confidence.

11 мая, 00:07

Грозит ли крах мировой экономике?

Приватизация и либеральные реформы оказались губительны для экономики России, заявил экономист и нобелевский лауреат Джозеф Стиглиц. Тем не менее теории, что «государство изжило себя в экономике и должно уступить место рынку», широко пропагандируются

04 мая, 20:56

The Guardian view on the Bank of England: independence and accountability | Editorial

Two decades after Gordon Brown allowed the Bank to set interest rates, it must answer new questions about its role and responsibilitiesIt is 20 years since the Bank of England was given the right to set interest rates by Gordon Brown. In the two decades since, the power wielded by Threadneedle Street has increased as its performance has got worse. It is hard now to remember how serene life was for the Bank in the early days after it was granted operational independence. Stripped of its role as supervisor of the UK’s banks, the Bank effectively became a monetary policy institute, with the nine members of its monetary policy committee tweaking the cost of borrowing to hit the government’s inflation target. With cheap Chinese goods keeping prices low, this was not especially hard to do. Mervyn King, the Bank’s governor from 2003 to 2013, called the late 1990s and the early 2000s the Nice decade – as in non-inflationary consistent expansion – and it was an apt description.Apt, but incomplete, because while the Bank was congratulating itself on hitting the inflation target, it failed to do anything to prevent the biggest speculative bubble since the 1920s. To be fair, this was not entirely the Bank’s fault. The crisis exposed the weaknesses of Labour’s tripartite system of financial supervision, with responsibility shared between the Treasury, the Bank of England and the Financial Services Authority. But the Bank did not realise until it was far too late that crises can erupt even when inflation is low. Like other central banks, it was guilty of groupthink. Continue reading...

21 марта, 00:16

No major currency problem for Scotland, says Mervyn King

"Scotland certainly could be an independent country", says former governor of the Bank of England.

17 марта, 09:14

ПРЯМАЯ РЕЧЬ: Дмитриев о ставке, депозитах, аналоге Бежевой книги

(Bloomberg) -- Директор департамента денежно-кредитной политики Банка России Игорь Дмитриев рассказал в интервью о перспективах заседания совета директоров по ставкам 24 марта, депозитных операциях и желании регулятора влиять на немонетарные факторы инфляции. О денежно-кредитной политике:Мервин Кинг говорил лет 10-11 назад, что денежно-кредитная...

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13 февраля, 17:15

The End of Alchemy: A Review Essay -- by Roger E.A. Farmer

I review The End of Alchemy by Mervyn King, published by W.W. Norton and Company in 2016. I discuss King's proposed regulatory reform, the 'Pawn Broker for All Seasons' (PFAS) and I compare it to an alternative solution developed in my own work. I argue that unregulated trade in the financial markets will not, in general, lead to Pareto optimal allocations. As a consequence, solutions like the PFAS that correct problems with existing institutions are likely to be circumvented by the development of new ones.

09 февраля, 15:43

Frontrunning: February 9

Airlines, Airports to Meet President Amid Travel-Ban Uncertainty (WSJ) Legal battle pits Trump's powers against his words (Reuters) Trump’s Oval Office Tweets Force CEOs to Choose Fight or Flight (BBG) Companies Plow Ahead With Moves to Mexico, Despite Trump’s Pressure (WSJ) Trump’s Labor Pick Loves Burgers, Bikinis, and Free Markets (BBG) NATO allies lock in U.S. support for stand-off with Russia (Reuters) Sessions Takes Reins at Justice Ready to Walk the Line for Trump (BBG) Washington Turns Attention to Yemen, Pleasing Gulf States (WSJ) Tesla pausing factory for Model 3 preparation this month (Reuters) Twitter reports slowest quarterly revenue growth, shares slide (Reuters) Goldman hedge fund folding London operations, shifting staff to U.S.: sources (Reuters) Big Meat Braces for a Refugee Shortage (BBG) Islamic State-linked group claims rocket attack on Israeli resort (Reuters) Manhattan landlords can't stop setting new records for giveaways  (BBG) Zurich Insurance Falls as Greco Fails to Convince on Growth (BBG) China's changing debt risks drive up bond futures volumes (Reuters) Northeast U.S. Bracing for Powerful, Fast-Moving Snowstorm (BBG) Singapore Airlines places $13.8 billion wide-body Boeing order (Reuters) Puma Predicts Profit Jump as Bolt, Rihanna Assist Resurgence (BBG) Overnight Media Wrap WSJ - The Senate confirmed Senator Jeff Sessions as attorney general largely along party lines Wednesday evening, ushering in a dramatic shift in the Justice Department's approach to issues ranging from relations with local police to immigration enforcement to voter fraud. http://on.wsj.com/2kQN3Ls - A federal judge, in a Wednesday evening decision, blocked health insurer Anthem Inc from acquiring rival Cigna Corp, the second court ruling in recent weeks to deal a decisive rebuke to efforts to reshape the industry through megamergers. http://on.wsj.com/2kR1TkZ - U.S. companies refinanced $100 billion of loans in January, the largest monthly total in at least a decade, as expectations for interest-rate increases fuel the biggest corporate-refinancing boom in years. http://on.wsj.com/2kR213X - A public shaming by Donald Trump last year hasn't deterred Rexnord from moving jobs to Mexico. And it isn't alone in making such a shift. http://on.wsj.com/2kQKDg0 - Viacom, long the poster child of the supersize cable TV bundle, is planning to narrow its strategic focus to six key channel brands as it seeks to reset its frayed relationships with distribution partners. http://on.wsj.com/2kQVEOc - Whole Foods said it would close nine of its stores and lowered its financial projections for the year, moves made as the natural-foods company struggles with increased competition and slowing sales growth. http://on.wsj.com/2kQUClc - Hollywood will soon have its first chance in five years to change the terms of doing business in China, a politically fraught opportunity for studios to reap billions more from their most important foreign market. http://on.wsj.com/2kQNp4S - President Donald Trump and Intel Corp Chief Executive Brian Krzanich announced plans for a $7 billion investment in a major manufacturing facility in Arizona. http://on.wsj.com/2kQMj9e - Theranos's lab in Arizona failed to ensure some patients who got potentially inaccurate diabetes test results were notified, according to a federal inspection report. http://on.wsj.com/2kQVQgs - Wells Fargo's board is likely to eliminate annual bonuses for 2016 for some top executives following the bank's sales-practices scandal. http://on.wsj.com/2kR4YBB   FT Volkswagen said it was weighing steps against ex-Chairman Ferdinand Piech after media reports said he had informed key supervisory board members about potential diesel cheating six months before the scandal became public. Intel Corp chose the White House Oval Office as its backdrop to announce a $7 billion investment in a previously shelved Arizona factory, which it said would create 3,000 jobs when it is up and running. French cosmetics giant L'Oreal is exploring the sale of its retail unit The Body Shop for 1 billion euros ($1.07 billion). L'Oreal is working with Lazard bankers on a review of its options for the British cosmetics and skincare business.   NYT - Ivanka Trump served for several years as a trustee for a fortune set aside for the daughters of Rupert Murdoch, but she stepped down in from the role December. The trust for the Murdoch daughters holds some $300 million in stock in News Corp and 21st Century Fox, companies that Murdoch leads, and in which he and his family hold controlling interests. http://nyti.ms/2k5tJKY - President Trump lashed out on Wednesday at the Nordstrom department store chain for dropping his daughter Ivanka's accessories and clothing line, once again raising ethical questions about the relationship between his presidency and his family's sprawling business interests. http://nyti.ms/2k5uIL0 - A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining. The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judge blocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds. http://nyti.ms/2k5LGc7   Canada THE GLOBE AND MAIL ** Foreign Affairs Minister Chrystia Freeland has warned the Trump administration that Ottawa is ready to retaliate if the he imposes tariffs at the border, potentially sparking a trade war between Canada and its largest trading partner. https://tgam.ca/2k68Zm2 ** Prime Minister Justin Trudeau says his government is "very concerned" about a recent influx of refugee claimants in a small southern Manitoba border town, emphasizing the need to protect both the incoming asylum seekers and Canada's border. https://tgam.ca/2lu7dse ** London Stock Exchange Group Plc has added three new issuers with ties to Canada so far in 2017, bringing its total to 22 such companies. https://tgam.ca/2k6aT6s NATIONAL POST ** TransCanada Corp is back in negotiations with natural gas producers to ship more Western Canadian gas to Ontario and thwart plans for a competing pipeline from Pennsylvania approved by the U.S. government last week. http://bit.ly/2kW9O0b ** Canada will provide long-range sniper rifles and anti-tank weapons to the Kurdish forces fighting the Islamic State (ISIL) in northern Iraq, the Department of National Defence said Wednesday. http://bit.ly/2k4TNB4 ** Bombardier Inc's ability to win a major CSeries order last year, and not the federal government's latest cash infusion, was the real impetus for Brazil's complaint against Canada at the World Trade Organization, according to a senior Brazilian official. http://bit.ly/2k6eLV1   Britain The Times Energy suppliers to face tough new finance tests New energy suppliers could face strict financial checks and existing companies could be subjected to stress tests, under a regulatory shake-up being considered by Ofgem. http://bit.ly/2llPSVs McLaren races into Sheffield McLaren Automotive, the Surrey-based supercar maker and sister company to the Formula One team, is opening a factory in the industrial north. http://bit.ly/2lm6bBF The Guardian Trump envoy says Greece is now more likely to leave the euro Donald Trump's administration has put itself on a fresh collision course with the European Union after the president's candidate to be ambassador in Brussels said Greece should leave the euro and predicted the single currency would not survive more than 18 months in its present form. http://bit.ly/2llQ9aW Hundreds of Waitrose jobs may go as retailer plans six store closures Waitrose is planning to close six stores and remove a level of management in its supermarkets, putting 600 jobs at risk. http://bit.ly/2lm5w3i The Telegraph Property developer brothers accused of threatening business partner with selling debt to Russian gangsters Property developers Nick and Christian Candy have been accused of threatening the pregnant wife of a former university friend and warning they would sell his debt to Russian gangsters, a court in London heard on Wednesday. http://bit.ly/2lm7eBH Mervyn King: MPs' attitude made Brexit inevitable British politicians have "lost touch" with voters and elitist bids to suppress the EU debate made the referendum on membership that led to the Brexit vote "inevitable", Mervyn King said. http://bit.ly/2lm4dkC Sky News Walmart to help Asda mount market share fightback A top executive at Asda's parent company has pledged greater support to the chain's recovery efforts after admitting it was slow to respond to the challenge posed by discounters in the UK. http://bit.ly/2lmb1P8 GSK boss seeks 'sensible' Brexit deal on migrant workers The chief executive of the UK's biggest pharmaceutical company, GlaxoSmithKline Plc, has told Sky News that Britain needs to be "open minded and sensible" about allowing skilled workers to come from abroad. The Independent Government accused of trying to kill off UK solar industry before it can become cheapest form of electricity The Government has been accused of trying to kill off Britain's solar energy industry just as it is about to become one of the cheapest suppliers of electricity - with no need for any kind of state subsidy. http://ind.pn/2lm570u  

25 января, 22:00

Mervyn King Brings Shame To An Economics Profession That Was Already Limping

It's scary to think even the ignorant might take the former of Bank of England chief's explanation of 2008 seriously.

09 января, 16:01

2016 Past is 2017 Prologue

With us being just over a week into the New Year, we feel it worthwhile to look back just one last time at 2016. We believe that many of the themes and risks of 2016 continue in 2017 and that they are likely to impact markets in the coming months - especially the precious metal markets. Malcolm McDowell as Alex in A Clockwork Orange. Source: Wikimedia We always enjoy new perspectives and every year we enjoy the witty, comprehensive and insightful analysis review of the year past by David Collum. His'2016 Year In Review' is in the same vein and was missed by many when it was released over the Christmas period. Collum is a professor of Chemistry and Chemical Biology at Cornell University. In addition to his academic interests, he authors an annual review of the financial, economic and geopolitical year. The review is a must read and includes interesting information about the astute academic’s views on gold - he is "sanguine as ever holding large precious metal positions." He continues: "Despite weakness of late, the case for gold is now in place: European and Chinese banking risks, negative interest rates, a war on cash, and omnipresent risks of a hot war in the borderlands of the Middle East and Europe. Estimates suggest 0.3% of investors’ assets are in gold.77 Traditional portfolio theory recommends 5%, offering a better than 15-fold relative performance en route. (Recall that discussion of "flow" from above.) Let’s check in on what some of the wingnuts on the fringe of society are chortling about now: “The world’s central bankers are completely focused on debasing their currencies. If investor’s confidence in central bankers’ judgment continues to weaken, the effect on gold could be very powerful.”~Paul Singer, Elliott Management Corp Gillian Tett: “Do you think that gold is currently a good investment?Greenspan: “Yes. Economists are good at equivocating, and, in this case, I did not equivocate.” “I can understand why holding gold would seem to be a sensible part of a national portfolio. Because there is clearly a need to take some precautions against an unknowable future.”~Mervyn King, former head of the Bank of England "I am not selling gold."~Jeff Gundlach, DoubleLine and the new “Bond King” “The case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder.”~James Grant, Founder of Grant’s Interest Rate Observer “Everyone should be in gold.”~Jose Canseco, expert on performance enhancement James Grant also went on to say that “gold is like a monetary tonsil,” leading some to speculate that his son, Charley (WSJ), slipped him a pot brownie. Let’s see if we can get the goofs too. We’ll begin by blowing out a few ideas I do not subscribe to. I keep hearing from smart guys that gold is in short supply in the Comex or Shanghai gold exchange, you name it. These stories almost never play out. I am also a huge fan of Rickards and Maloney, but the saying “gold is money” and the notion that its price is actually the movement of the value of the dollar don’t work for me: prices of everything I buy follow the dollar, not gold, on the currency timescales. On long timescales, their assertion may be correct. Someday their assertion may even be correct on short timescales, but that isn’t right now. What a year: I got as many electoral delegates as the bottom ten republican candidates combined, ate python, and own as much gold as the Central Bank of Canada. Per the Bank of Canada, it finished selling off all of its gold,78 probably to ensure that the U.S. didn’t attack. You think I jest? A WikiLeaked e-mail by Sid Blumenthal to Hillary Clinton revealed that France whacked Libya to make sure North Africa distanced itself from a gold dinar currency.79,80 Germany supposedly has half of its requested gold repatriated from the U.S. and France,81 which could be bullish or bearish on the half-full/half-empty logic. Venezuela repatriated 100 tons of gold a few years ago and was squeezed to sell it all back in the heat of a currency crisis.82 The Dutch depatriated their gold this year after repatriating it not long ago.83 The reasons are unclear. Alexei Ulyukayev, first deputy chairman of Russia’s central bank, assured us Russia will continue to buy gold (Figure 7), presumably as a defense against interventions from inside the beltway. Of course, the Fed is silent on the “metal whose name shall never be spoken.” Figure 7. Russian gold reserves In a shockingly quiet year given how much gold moved to the upside before the post-election monkey hammering, we probably should finish with some generic goofiness. On a few occasions, gold took the beatings that are familiar—huge futures dumps in the illiquid wee hours of the morning when no price-sensitive investor would ever consider selling. It dropped $30 in seconds late on the day before Thanksgiving when nobody was paying much attention. Another hammering came from a $2.25 billion sale84 and another $1.5 billion sale,85 both of which occurred in under 1 minute. Nanex concluded that the algo “gold spoofer” was at play,86 but the 2016 poundings were transitory and toothless compared with their brethren in 2011–2015. Trouble in the ETF market was revealed when BlackRock was overwhelmed by GLD buying.87 It was forced to create more shares in February than it had in a decade. I retain previously stated convictions that GLD is a scam—fractional-reserve gold banking. Deutsche Bank was overwhelmed by requests for physical gold.88 It tried to shake the hook by demanding that such a request must be made at a participating bank.89 Deutsche Bank, the location of the request, is not a participating bank? I imagine it doesn’t have the gold, consistent with its troubles outlined below. A Swedish precious metal vault got its payment mechanism terminated without explanation.90 We can’t close without talking about gold’s kissing cousin—silver. The silver market gets its share of muggings and sustained bashings, at times spanning several weeks. The silver sellers didn’t get full traction either, however, bringing silver off a 50% gain but leaving it up 15% year to date. Silver market treachery got some attention. The London Silver Fix—truth in advertising—at times deviated markedly from the spot price,91 causing consternation among those attempting to fix the price. Deutsche Bank agreed to settle litigation over allegations it illegally conspired with Scotiabank and HSBC Holdings to fix silver prices at the expense of investors.92 A class action suit against Scotiabank suggested that the conspiracy spanned 15 years.93 JPM was cleared of silver manipulation in three lawsuits—all dismissed with prejudice, an altogether different form of “fix.”94 The only remaining question is why they are stockpiling huge stashes of physical silver.95 I’m as sanguine as ever holding large precious metal positions. Gold bugs are reminded, however, of what a big victory will feel like: “Our winnings will come . . . from the people who wake up one morning to find their savings have been devalued or bailed-in. . . . [I]t’s going to come from the pension funds of teachers and firefighters. The irony is that when gold finally pays off, it will not be a cause for celebration.”~Brent Johnson, Santiago Capital     ‘2016 Year In Review – A Clockwork Orange’ can be accessed in full here   KNOWLEDGE IS POWER For your perusal, below are in order of downloads our most popular guides in 2016: 10 Important Points To Consider Before You Buy Gold 7 Real Risks To Your Gold Ownership Essential Guide To Storing Gold In Switzerland Essential Guide To Storing Gold In Singapore Essential Guide to Tax Free Gold Sovereigns Please share our research with family, friends and colleagues who you think would benefit from being informed by it.   Gold and Silver Bullion - News and Commentary Gold edges up, but gains limited by rate hike prospects (Reuters.com) Gold slips from one-month high after U.S. data; palladium soars (Reuters.com) Factory orders tumble 2.4% in November (MarketWatch.com) Bitcoin extends losses, slides another 12 percent on China warning (Reuters.com) CME Group average daily metals trading volume up 34% in 2016 (Platts.com) Gold, Trump and Politics In The Time Of Twitter (DailyReckoning.co.uk) Summers Warns of Financial-Crisis Risk From Trump Economic Plans (Bloomberg.com) There Is No Limit On Holding Gold: Managing Director, India, WGC (OutLookIndia.com) JP Morgan’s COMEX Silver Stash Tops 83 Million Troy Ounces (GoldSeek.com) Will this bull market end with a whimper – or a catastrophic bang? (MoneyWeek.com) Gold Prices (LBMA AM) 09 Jan: USD 1,176.10, GBP 968.75 & EUR 1,118.59 per ounce06 Jan: USD 1,178.00, GBP 951.35 & EUR 1,112.27 per ounce05 Jan: USD 1,173.05, GBP 953.55 & EUR 1,116.16 per ounce04 Jan: USD 1,165.90, GBP 949.98 & EUR 1,117.40 per ounce03 Jan: USD 1,148.65, GBP 935.12 & EUR 1,103.28 per ounce30 Dec: USD 1,159.10, GBP 942.58 & EUR 1,098.36 per ounce29 Dec: USD 1,146.80, GBP 935.56 & EUR 1,094.85 per ounce Silver Prices (LBMA) 09 Jan: USD 16.52, GBP 13.57 & EUR 15.69 per ounce06 Jan: USD 16.45, GBP 13.30 & EUR 15.54 per ounce05 Jan: USD 16.59, GBP 13.47 & EUR 15.80 per ounce04 Jan: USD 16.42, GBP 13.36 & EUR 15.74 per ounce03 Jan: USD 15.95, GBP 12.97 & EUR 15.34 per ounce30 Dec: USD 16.24, GBP 13.20 & EUR 15.38 per ounce29 Dec: USD 16.06, GBP 13.10 & EUR 15.36 per ounce Recent Market Updates - Gold Gains In All Currencies In 2016 – 9% In USD, 13% In EUR and Surges 31.5% In GBP- Trump’s Twitter “140 Characters” To Push Gold To $1,600/oz in 2017?- 2017 – The Year of Banana Skin- US: Five Must Gold See Charts – Gold Miners Are “Running Out” of Gold- Royal Mint And CME Make A Mint On The Blockchain?- China Gold and Precious Metals Summit 2016 – GoldCore Presentation- Trumpenstein ! Who Created Him and Why?- Bail-Ins Coming? World’s Oldest Bank “Survival Rests On Savers”- Fed’s “Fool Me…”, Silver Suppression, Euro Contagion In 2017?- Fed Raised Rates 0.25% – Rising Rates Positive For Gold- Shariah Gold Standard Is “Revolutionary” – Mobius- Silver Fixing By Banks Proven In Traders Chats- Euro Crisis and Contagion Coming In 2017 www.GoldCore.com

30 декабря 2016, 01:30

Central Bankers Are Losing Faith In Their Own Alchemy

Submitted by David Gordon via The Mises Institute, Mervyn King is the British Ben Bernanke. An eminent academic economist, who now teaches both at New York University and the London School of Economics, King was from 2003 to 2013 Governor of the Bank of England. In short, he is a very big deal. Remarkably, in The End of Alchemy he frequently sounds like Murray Rothbard. King identifies a basic problem in the banking system that has again and again led to financial crisis. “The idea that paper money could replace intrinsically valuable gold and precious metals, and that banks could take secure short-term deposits and transform them into long-term risky investments came into its own with the Industrial Revolution in the eighteenth century. It was both revolutionary and immensely seductive. It was in fact financial alchemy — the creation of extraordinary financial powers that defy reality and common sense. Pursuit of this monetary elixir has brought a series of economic disasters — from hyperinflation to banking collapses.” How exactly is this alchemy supposed to work? “People believed in alchemy because, so it was argued, depositors would never all choose to withdraw their money at the same time. If depositors’ requirements to make payments or obtain liquidity were, when averaged over a large number of depositors, a predictable flow, then deposits could provide a reliable source of long-term funding. But if a sizable group of depositors were to withdraw funds at the same time, the bank would be forced either to demand immediate repayment of the loans it had made, … or to default on the claims of depositors.” Readers of Rothbard’s What Has Government Done to Our Money? will recognize a familiar theme. Many have sought to salvage the alchemy of banking by resorting to a central bank. By acting as a lender of last resort, a central bank can bail out banks in need of funds to satisfy anxious depositors and thus avert the danger of a bank run. The alchemy of transforming deposits into investments can now proceed. Though he was one of the world’s leading central bankers, King finds fault with this “solution.” A local bank can be rescued by getting money from the central bank, but the process generates new problems. Thomas Hankey, a nineteenth-century Governor of the Bank of England, pointed out some of these in response to Walter Bagehot, the classic defender of the central bank as the lender of last resort: [i]f banks came to rely on the Bank of England to bail them out when in difficulty, then they would take excessive risks and abandon “sound principles of banking.” They would run down their liquid assets, relying instead on cheap central bank insurance — and that is exactly what happened before the recent [2008] crisis. The provision of insurance without a proper charge is an incentive to take excessive risks — in modern jargon, it creates “moral hazard.” Given the dangers of financial alchemy, what should we do about it? Again, King strikes a Rothbardian note. He writes with great sympathy for one hundred percent reserve banking. Even though the degree of alchemy of the banking system was much less fifty or more years ago than it is today, it is interesting that many of the most distinguished  economists of the first half of the twentieth century believed in forcing banks to hold sufficient liquid assets to back 100 percent of their deposits. They recommended ending the system of “fractional reserve banking,” under which banks create deposits to finance risky lending and so have insufficient safe cash reserves to back their deposits. Like Rothbard, King calls attention to the insights of the nineteenth-century Jacksonian William Leggett. King cites an article of 1834 in which Leggett said: Let the [current] law be repealed; let a law be substituted, requiring simply that any person entering into banking business shall be required to lodge with some officer designated in the law, real estate, or other approved security, to the full amount of the notes which he might desire to issue. King may to an extent resemble Rothbard; but unfortunately he is not Rothbard; and alert readers will have caught an important difference between King’s idea of one hundred percent reserve banking and Rothbard’s. King’s notion, unlike Rothbard’s, still allows banks to expand the money supply. The “liquid assets” need not be identical with the deposits: they need only be easily convertible into money should the need arise to do so. King’s own plan to “end the alchemy” allows for substantial monetary expansion. He calls his idea the “pawnbroker for all seasons (PFAS)” approach. This is a form of “liquidity” insurance. Banks would have to put up in advance as collateral with the central bank some of their assets. This would act as a “form of mandatory insurance so that in the event of a crisis a central bank would be free to lend on terms already agreed.” So long as the insurance had been paid, though, the central bank would still bail the bank out in a crisis by giving it more money. Contrast this with the plan suggested in the quotation from Leggett, in which if a bank could not redeem its notes, depositors could proceed directly against the bank’s assets. This allows no monetary expansion; and Rothbard’s plan is of course more restrictive still. Having come so close to Rothbard, why does King shrink from the final step? Why does he still allow room for monetary expansion? He fears deflation. Sharp changes in the balance between the demand for and supply of liquidity can cause havoc in the economy. The key advantage of man-made money is that its supply can be increased or decreased rapidly in response to a sudden change in demand. Such an ability is a virtue, not a vice, of paper or electronic money. … The ability to expand the supply of money in times of crisis is essential to avoid a depression. But if the demand for liquidity suddenly increases, when the monetary stock is constant, cannot falling prices for goods satisfy the demand? King, here following Keynes, is skeptical. “Wage and price flexibility does help to coordinate plans when all the markets relevant to future decisions exist. But in practice they do not, and in those circumstances cuts in wages and prices may lower incomes without stimulating current demand.” Prices may keep falling indefinitely. Other possibilities of coordination failure also trouble King, and underlying them is an important argument. Following Frank Knight, he distinguishes between risk and uncertainty. Risk concerns events, like your house catching fire, where it is possible to define precisely the nature of that future outcome and to assign a probability to the occurrence of the event based on past experience. … Uncertainty, by contrast, concerns events where it is not possible to define, or even imagine, all possible future outcomes, and to which probabilities cannot therefore be assigned. We live in a world of radical uncertainty, and thus we cannot be sure that relying on market prices to adjust to changes in the demand to hold money suffices to avert catastrophe. It is for this reason that resort to monetary expansion sometimes is needed. This argument moves altogether too fast. It does not follow from the fact that Knightian uncertainty prevails widely that one must take seriously the possibility that prices and wages would fall indefinitely. In a situation of uncertainty, we cannot, by hypothesis, calculate probabilities; but this does not require that we take outlandish possibilities as likely occurrences that must be averted by the government. Some reason needs to be given for supposing that prices will continue to fall indefinitely. Why would entrepreneurs not be able to correct the situation, without resorting to monetary expansion? We are not faced with a dichotomy between exact mathematical calculation, in the style of an Arrow-Debreu equilibrium, and blind groping in the dark. King himself acknowledges that in the American depression of 1920 to 1921, no resort to the government was needed. The striking fact is that throughout the episode there was no active stabilization policy by the government or central bank, and prices moved in a violent fashion. It was, in the words of James Grant, the Wall Street financial journalist and writer, “the depression that cured itself.” It is encouraging that King cites the Austrian economist James Grant, but he draws from his work an insufficient message. “The key lesson from the experience of 1920–21 is that it is a mistake to think of all recessions as having similar causes and requiring similar remedies.” In view of the manifold invidious consequences, fully acknowledged by King, of government intervention, should we not rather emphasize the need to rely on the unhampered market? King nevertheless merits praise for coming close, in his own way, to many Austrian insights.

27 декабря 2016, 17:40

Экс-глава Банка Англии: пребывание Британии в составе единого рынка ЕС не имеет смысла

"Великобритания должна выбрать свою иммиграционную политику и перестать делать вид, что Брекзит совместим с пребыванием страны в составе единого рынка Европейского Союза", - заявил бывший управляющий Банка Англии. Мервин Кинг, который руководил британской денежно-кредитной политикой в течение 10 лет до 2013 года, сообщил, что сторонники и противники ЕС должны начать смотреть на итоги референдума по вопросу членства Британии в составе Европейского Союза как возможность. "Есть возможности Брекзита, которые мы должны принять и я думаю, что мы должны смотреть на это более самоуверенным способом, чем любая из сторон делает это в данный момент", - сказал он. - Я не считают, что для нас имеет смысл делать вид, что мы должны остаться на едином рынке, и я думаю, что есть настоящие вопросы о том, следует ли нам оставаться в таможенном союзе. Кроме того, Британия должна была решить, какой будет ее собственная иммиграционная политика". Большинство экономистов поддерживают дальнейшее членство Великобритании на едином рынке ЕС и любые признаки того, что страна может потерять доступ, как правило, снижают стоимость фунта. Ведущие политики ЕС заявили, что доступ к единому рынку, в котором торговля товарами и услугами является бестарифной, возможна только в обмен на разрешение свободного передвижения граждан ЕС. "Я думаю, что референдум ясно дал понять, что люди хотят контроля над иммиграцией, что не является предметом переговоров. Было бы большой ошибкой пренебрегать данным вопросом в рамках переговоров с бывшими партнерами по ЕС", - сказал Кинг. Информационно-аналитический отдел TeleTradeИсточник: FxTeam

27 декабря 2016, 12:28

Обзор финансово-экономической прессы: Экс-глава Банка Англии выступил за выход из единого рынка ЕС

BBC Премьер Японии Абэ прибыл с визитом на Гавайи Премьер-министр Японии Синдзо Абэ прибыл с визитом на Гавайские острова, подвергшиеся в 1941 году бомбардировке со стороны японской авиации. В первый день своего двухдневного визита Абэ посетил в Гонолулу мемориал американцам, погибшим в ходе бомбардировок. Японский премьер некоторое время молча постоял перед памятником. Дональд Трамп раскритиковал ООН, назвав клубом по интересам Избранный президент США Дональд Трамп назвал Организацию Объединенных Наций клубом, где люди собираются поговорить и хорошо провести время. В своем "Твиттере" Трамп написал, что считает ООН организацией с большим потенциалом, который фактически не используется. Избранный президент США добавил, что его печалит этот факт. ТАСС В Венесуэлу доставят 35 млн новых банкнот Президент Венесуэлы Николас Мадуро заявил, что в страну будет доставлена партия новых банкнот, передает ТАСС. «В 1.00 в страну с задержкой в восемь дней прибудут 35 млн банкнот номиналом 500 боливаров», - сообщил он.Власти южноамериканской страны в этом месяце проводят самую масштабную за последние годы замену денежных знаков. Ранее сообщалось, что сразу в нескольких штатах Венесуэлы прошли акции протеста из-за нехватки наличных средств, а также из-за отказа магазинов принимать банкноты в 100 боливаров. Independent Экс-глава Банка Англии выступил за выход из единого рынка ЕС Экс-глава Банка Англии Мервин Кинг заявил, что Великобритания должна покинуть единый европейский рынок, поскольку он был «довольно неудачным», пишет издание Independent. Выступая в программе BBC - Radio 4, Кинг, который возглавлял ЦБ страны в течение 10 лет, предупредил, что существуют реальные вопросы о том, следует ли оставаться в таможенном союзе, который может ограничивать возможности Великобритании для заключения новых торговых сделок. Китай готов снять часть ограничений для иностранных инвесторов в 2017 году Китай планирует снять ряд серьезных ограничений для иностранных инвесторов в 2017 году. Об этом сообщает Reuters со ссылкой на министерство торговли страны. В министерстве заявили, что Китай откроет для инвестиций те сектора экономики, к которым у иностранцев есть сильный интерес и где риски находятся под контролем. Информационно-аналитический отдел TeleTradeИсточник: FxTeam

27 декабря 2016, 03:01

'Clean Brexit' could save UK £450m a week, claims pro-leave group

Change Britain says UK could save £24bn a year by leaving single market, customs union and ‘burdensome regulations’A pressure group backed by a string of former Vote Leave campaigners from Michael Gove to Gisela Stuart has claimed that exiting the EU with a “clean Brexit” could save the country £450m a week.During the referendum campaign, Vote Leave controversially argued that leaving the EU would leave an extra £350m a week to spend on the NHS. Continue reading...

26 декабря 2016, 19:57

Экс-глава Банка Англии поддержал выход Британии из единого рынка ЕС

Экс-глава Банка Англии Мервин Кинг заявил, что Великобритании нет смысла оставаться в едином рынке Евросоюза, и призвал воспользоваться всеми возможностями, которые страна может получить от Brexit. Об этом он рассказал в интервью BBC.

26 декабря 2016, 15:13

Экс-глава Банка Англии выступил за выход из единого рынка ЕС

Экс-глава Банка Англии Мервин Кинг заявил, что Великобритания должна покинуть единый европейский рынок, поскольку он был "довольно неудачным", пишет издание Independent. Выступая в программе BBC - Radio 4, Кинг, который ...

26 декабря 2016, 12:54

Mervyn King: Britain better off going for hard Brexit

Former Bank of England governor says despite political difficulties there will be many opportunities once UK leaves EUBritain may be better off going for a hard Brexit that would mean leaving the single market and customs union, Mervyn King, the former governor of the Bank of England, has suggested.Lord King, who has been more optimistic about leaving the EU than many economic commentators, acknowledged that Brexit would bring great political difficulties and would not be a “bed of roses”. Continue reading...

26 апреля 2013, 12:44

Странглия, Мервин Кинг и Сергей Игнатьев

На графике ВВП Великобритании (картинка из свежайшей речи одного из лидеров Банка Англии, там другие есть). Красным показан докризисный тренд, а синим жизнь. Вчера все с напряжением ждали, объявят ли народу об уже ТРЕТЬЕЙ по счету рецессии, но бог миловал и объявили о небольшом росте в первом квартале. Почему нет роста в любимом россиянами Лондонграде и его окрестностях?Кругман, ДеЛонг и другие уверяют своих читателей, что это из-за бюджетной консолидации бюджетного аскетизма, как в России.  Они видят на этой картинке ошибку в статье Рейнхарт-Рогофф 2010 года, и письмо о бюджетной дисциплине, которое в феврале 2010 года подписал Кеннет Рогофф вместе с другими экономистами. Статья и письмо подтолкнули правительство Камерона на ужасную экономическую политику и лишили британцев благосостояния, измеряемого разницей между красной революционной линией и синей, преступной. Чтобы убедиться, что красная линия является для Кругмана и ДеЛонга критерием успеха, желающие могут почитать свежую заметку ДеЛонга про США или поискать его и Кругмана многочисленные атаки на Великобританию, а про Латвию с Эстонией я лучше промолчу.Вопрос на засыпку про бюджетный аскетизм упирается в Великобританию по ряду причин.  У страны своя валюта, которая, как постоянно повторяет Кругман и Ко. необходима для успеха.  С начала кризиса фунт стерлингов подешевел процентов на 20-25, что, по мнению Кругмана, должно было привести с скачку экспорта.  Инфляция была намного выше 2%, к чему тоже призывали Кругман и другие экономисты.  Много чего было в Великобритании в кризисные годы. А роста не было и пока нет.  Поэтому для Кругмана, ДеЛонга и их единомышленников  главным виновником преступления должен быть бюджетный аскетизм.  В Великобритании, по их мнению, нужен был значительный бюджетный стимул, достаточный для быстрого возвращения к красной черте.  На всякий случай напомню сразу, что дефицит бюджета в Странглии на автомате сразу скакнул к 10-11% ВВП (картинка).  Этого, по мнению борцов с бюджетным аскетизмом, было мало, надо было гораздо больше. По мнению Кругмана, инвесторы бы этого совсем не испугались, потому что никакой "Волшебницы доверие" нет (добавим от себя следствие: нет и "Волшебницы Недоверие").  Вот свежая заметка ДеЛонга, где он обвиняет Камерона и "правых" экономистов в попытке реализовать в Великобритании "стимилирующее сокращение" дефицита бюджета а ля Алесина.Как и в случае российских дебатов о замедлении роста, за более объективным мнением я обратился к уходящему руководителю центрального банка - Банка Англии - Мервину Кингу, коллеге Сергея Игнатьева. В своей январской речи Кинг подробно рассказывал о диагнозе, лечении и будущем экономики Великобритании.  Речь советую почитать. В отличие от Банка России, британцы публикуют речи своих руководителей, чтобы каждый желающий не гадал, какие у них мысли, а мог прочитать речь и поглазеть на иллюстрации к ней и даже почитать указанную дополнительную литературу.Кинг сразу же напомнил слушателям об избыточном докризисном энтузиазме:Much of this reflects the inevitable correction of exuberance on the part of borrowers and lenders, the conditions for which were created by the failure to tackle the global imbalances that left most major countries with unsustainable exchange rates, unsustainable paths of consumption, saving and borrowing, and unsustainably low long-term real interest rates.Затем отметил три фактора, сдерживающих рост, некоторые из них внутренние, некоторые внешние. Не буду пересказывать, но среди них упомянуты цены на еду и энергию.  Системный финансовый кризис привел к нарушениям в банковском секторе, толкнул банки к осторожности и затруднил доступ к кредиту, особенно для мелких и средних предприятий. Но среди причин анемичного роста у Кинга нет даже намека на излишний бюджетный аскетизм.  Единственное упоминание о бюджетной политике во всей речи сводится к ограничениям в ее использовании из-за большого госдолга:In many countries, including the UK, fiscal policy is constrained by the size of government indebtedness, and monetary policy has come to be seen as the only game in town.Нет бюджетного стимулирования и среди нескольких рецептов лечения (помимо денежно-кредитной политики КуЕ). Рецепта три, включая укрепление банков, увеличение экономического потенциала за счет структурных реформ и (все еще надежда на)  восстановление еврозоны и слабый фунт стерлингов/экспорт:What are those other policies? They come under three headings: restoring confidence in our banks, reforms to raise the future potential supply of our economy, and changes in the world economy and exchange rates.Этот диагноз, рецепты лечения и прогноз мы услышали от одного из сотен британских экономистов, которые в свое время в открытом письме возмутились преступным бюджетным аскетизмом Маргарет Тэтчер :). Кто-нибудь наверняка скажет мне, что старик Кинг кривит душой, что не хочет осложнять жизнь правительству Камерона. Но ведь он пожилой уже человек, ему нечего терять, кроме своего доброго имени. Не боится же он требовать значительного дополнительного увеличения акционерного капитала у всесильных банков, которые могли бы его подкармливать в старости. Неужели Кинг промолчал бы, если бы действительно верил во вред бюджетной дисциплины?Что такое ужасное делает правительство Великобритании, какой такой особый аскетизм в Лондонграде?  Смотрим еще раз на сокращение дефицита, ожидаемое в разных странах за три года 2011-2013, и видим, что у британцев сокращение дефицита очень похоже на небольшое сокращение в других странах, как у Франции или Бельгии, и меньше, чем в США, не говоря уже о больных еврозоны Испании, Ирландии и Ко., которым Кругман, кстати, тоже раньше регулярно предлагал активнее стимулировать экономику дополнительными бюджетными расходами (?!).Можно допустить, что сейчас, когда инвесторы успокоились после испуга 2008-2011 гг., британцы могли бы сокращать дефицит чуть медленнее, как это может себе теперь легко позволить Эстония или Латвия. Сейчас, а не в 2010, когда инвесторы, включая Билла Гросса, буквально тряслись от страха. И американцы могли бы сейчас дать слабину. Но надо же быть реалистами. К красной линии они бы все равно долго не вернулись. И Кругман с ДеЛонгом все равно будут ругать всех и вся во всю силу своих легких.  Никакого чрезмерного аскетизма в Великобритании нет, просто не нашли там вовремя сланцевый газ, банковский сектор там побольше и еврозона поближе. Разница между Великобританией и США еще и в том, что в Америке нет никаких бюджетных планов, а есть секвестр, знакомый нам по предкризисным 1990м. Там правит политический паралич. Планы же британцев известны заранее, и за выполнением планов уже давно следят специально обученные независимые люди в Офисе бюджетной ответственности, как и учил реалист Кеннет Рогофф.ДОП: Пока я кропал и выдергивал из интернета чужие мысли и картинки, появился пользительный пост zhu_s...Как я уже заметил в тексте, мы не можем ознакомиться с речью Сергея Игнатьева о причинах замедления роста российской экономики и посмотреть на познавательные картинки-иллюстрации к его увлекательному рассказу.  Но у нас есть zhu_s, который думает и пишет на эту важную для экономической политики тему.

18 марта 2013, 18:26

Центробанки Европы призывают отказаться от LIBOR

Ставка LIBOR должна быть заменена на систему альтернативных ставок, считают главы европейских центробанков.Банки, замешанные в скандале с LIBOR Регуляторы предлагают заменить LIBOR на ряд альтернативных ставок, которые будут формироваться только исходя из рыночной ситуации. Подобное предложение было опубликовано в ежегодном докладе Базельского комитета по банковскому надзору.Помимо этого также предлагается создать механизм, который позволит избежать коллапса рынка межбанковского кредитования, который произошел во время мирового финансового кризиса в 2008 г. В рамках "экстренного" механизма предлагается в кризисной ситуации позволить активное вмешательство регуляторов и центральных банков для поддержки рынка. "Понятно, что центральные банки должны играть важную роль в поддержке развития альтернативных базовых ставок", - заявил глава Банка Англии Мервин Кинг.Ранее сообщалось, что реформу будет проводить Управление по финансовым услугам (FSA) во главе с Мартином Уитли. Изменения будут существенными: ставки будут рассчитываться на основе заключенных сделок, предусмотрена возможность использования альтернативных ставок, а манипулирование ставками станет уголовным преступлением.Уитли представил доклад, согласно которому право расчета LIBOR должно перейти к FSA. Помимо этого, на его взгляд, необходимо снизить количество валют, а также периодов времени, для которых рассчитывается LIBOR. На данный момент в общем итоге рассчитывается 150 ставок (10 валют, 15 периодов). История вопросаСтавка LIBOR - долгожитель рынка. С 1984 г. начали закладываться основы современного принципа ее расчета. Сегодня все выглядит довольно просто: LIBOR задают каждый рабочий день специалисты Британской ассоциации банкиров (British Bankers Association). Они опрашивают 16 крупнейших банков Великобритании по стоимости их заимствований на "сегодня". В расчет принимаются заимствования на 15 разных периодов от овернайта до одного года в долларах, евро, иенах, швейцарских франках - всего в 10 валютах. 4 самых низких и 4 самых высоких значений отбрасывают, из оставшихся 8-ми вычисляется среднее – это и есть LIBOR. Уитли предлагал сократить это число до 20 в течение года, а публикацию LIBOR для австралийского, канадского и новозеландского долларов, а также датской и шведской крон необходимо прекратить. Вероятнее всего, Базельский комитет будет придерживаться именно данной стратегии при внесении предложений отказа от ставки LIBOR.

22 февраля 2013, 14:42

Британия и Китай будут использовать взаимные свопы

Великобритания и Китай в ближайшем будущем будут использовать валютные свопы фунтов и юаней для обеспечения экономического сотрудничества между странами.Согласно пресс-релизу Банка Англии трехлетние взаимные свопы будут использоваться для финансирования торговли и прямых инвестиций, что будет способствовать развитию экономических отношений между странами. Глава британского ЦБ Мервин Кинг по итогам своей поездки в Китай пообещал предпринять все меры, чтобы договор вступил в силу в ближайшее время."Создание своп-линии фунт/юань поддержит внутреннюю финансовую стабильность Великобритании", - заявил глава британского Центробанка.Ранее главы британских банков предлагали национальному регулятору решиться на подобный шаг, в рамках программы по укреплению Лондона как мирового финансового центра. В случае успеха юань продолжит уверенное "шествие" по миру, поскольку еще в 2012 г. аналогичные договоры были подписаны с центральными банками 17 стран.

27 ноября 2012, 18:40

Впервые за три столетия Банк Англии возглавит экспат

Новым управляющим Банка Англии станет экспат — нынешний глава канадского ЦБ Марк Карни. Карни, работавший ранее в инвестбанке Goldman Sachs, заменит в новой должности Мервина Кинга, который уходит со своего поста в июле. О назначении Карни объявил на заседании парламента британский министр финансов Джордж Осборн. «Я иду туда, где предстоит решать самые сложные задачи», — сказал Карни на пресс-конференции в Оттаве, подчеркнув необходимость «перебалансировки» британской экономики, чрезмерно зависимой от сектора финансовых услуг, сотрясаемого скандалами и убытками. Впервые за более чем 300-летнюю историю Банка Англии его возглавит небританец. До недавнего времени наиболее вероятным претендентом на пост «главного банкира» с зарплатой в 624 тысячи фунтов стерлингов в год считали нынешнего заместителя управляющего Пола Такера, пишет Reuters. В Банке Канады агентству не сообщили точную сумму вознаграждения Карни, но назвали диапазон в 436,2-513 тысяч долларов США. В период кризиса Карни удалось ограничить масштабы рецессии в Канаде, где, по сравнению с другими развитыми странами, спад был самым неглубоким и непродолжительным. Ни одному из банков страны не потребовалась государственная помощь, довольно быстро удалось восстановить все рабочие места, которые были потеряны из-за экономических потрясений. В противоположность этому, Великобритании пришлось спасать Royal Bank of Scotland и Lloyds Banking Group, а экономика, шестая по величине в мире, спустя четыре года после начала кризиса с трудом «приходит в себя» — до сих пор не удалось возобновить нормальный рост, комментирует Reuters. Со следующего года Банк Англии берет на себя функции финансового регулирования, что почти вдвое увеличит структуру организации. Это стало дополнительным аргументом в пользу кандидатуры знающего управленца с опытом работы на финансовых рынках. Экономист из Toronto-Dominion Bank Дерек Берлтон говорит, что Карни — прагматик, не склонный к абстрактным теориям. Карни женат на британке. В свое время он десять лет жил в Великобритании — учился в магистратуре и затем писал докторскую в Оксфорде и работал в Goldman Sachs. Как сообщил министр финансов Великобритании Джордж Осборн, Карни будет подавать на гражданство. Министр финансов Канады Джим Флаэрти признал, что испытывает смешанные чувства по поводу назначения Карни: «Для нас это потеря, нам будет его не хватать». «У нас есть отлаженная система, которая работает очень хорошо. Она подверглась испытанию в период серьезнейших экономических и финансовых потрясений на нашем веку, и она выдержала эту проверку», — говорит Карни. Обозреватели добавляют, что задачу канадского центробанка в некоторой степени упрощал рост цен на важнейшие товары канадского экспорта — нефть, золото и зерно. Карни остается в Банке Канады по май включительно, к работе на новом посту в Великобритании он приступит в июле. Как сообщает Reuters, он назначается на пять лет, хотя предполагалось, что срок полномочий следующего управляющего Банка Англии составит восемь лет.