COMMENT AND CURIOS
- A college degree vs being born rich.
- Saving Abenomics: no time for cold feet on QE.
- Protectionism's quiet return.
- Steve Randy Waldman on helicopter drops.
- And why Noah Smith is a fiscalist.
- Paul Krugman on the possibility of a Canadian deleveraging bust.
- How to live to be 100.
- Calculated Risk's mid-year review.
ROUND-UP
Market turmoil forces G8 leaders to focus on global economy: "Turmoil in financial markets is once again overshadowing a Group of Eight summit, turning world leaders' attention away from trade, tax and transparency and back to the bumps on the road to recovery. With global bond markets swooning on the hint that the US might slow its money-printing operations and currency market volatility leaping as investors try to gauge the right level of the dollar and the yen, G8 leaders know the world economy remains a dangerous place." (Financial Times)
G8 dispute breaks out on Syria arms: "An international row has broken out on the eve of the G8 summit over arming of both sides in Syria's civil war. President Vladimir Putin bluntly warned the US and its allies not to arm opposition rebels in Syria, reasserting Russia's uncompromising support for Bashar al-Assad's regime and declaring that Moscow backs the country's "legitimate" government." (Financial Times)
George Osborne to hint at sale of bailed-out bank: "George Osborne is to give his strongest signal yet that he wants to move Lloyds Banking Group back into private ownership by the 2015 general election, albeit not at a price that would leave taxpayers out of pocket. The chancellor will refuse to lay out a specific "timetable" on the sale of government stakes in either RBS or Lloyds in his annual Mansion House speech on Wednesday, according to aides." (Financial Times)
Bid to relaunch synthetic CDO unravels: "An attempt by two big Wall Street banks to revive notorious credit boom-era securities blamed for exacerbating the global financial crisis has failed after investors balked at buying some of the derivatives on offer. JPMorgan Chase and Morgan Stanley have scrapped a plan to sell "synthetic collateralised debt obligations" – sliced and diced pools of credit derivatives – after failing to find investors willing to take on all of the deal's different pieces." (Financial Times)
JPMorgan set to launch asset tracking service: "JPMorgan Chase will on Monday unveil its attempt to capture a slice of the growing business of managing the billions of dollars worth of cash and securities that funds and companies will need to stump up to back their derivatives trades. The US investment bank says it has created a hub that will allow clients to track and optimise all of their available "collateral" – even those assets held at other banks and custodians." (Financial Times)
Bank of England says foreign banks made UK's credit crunch worse: "Foreign-owned bank branches in Britain made the country's financial crisis worse, shrinking their loan books by almost half at the height of the credit crunch, according to Bank of England research. In the latest sign of the BoE's concern surrounding the impact of international banking on the UK economy, research by the central bank showed lending from foreign-owned branches boomed in the run-up to the crisis before collapsing by 45 per cent between the third quarter of 2007 and the same period in 2009." (Financial Times)
Brazil hanging on for record IPO boom: "Capital raised this year from new listings on Brazil's stock market is set to top $10.6bn this week – the highest January to June total in the country's history. But it all depends whether bankers can bring the world's second-biggest initial public offering this year to market." (Financial Times)
Aerospace trio campaigns for European drone programme: "Three of Europe's biggest defence contractors have called on governments to launch a European drone programme to compete with the US and Israeli companies that dominate the sector. Pan-European EADS, Italy's Finmeccanica and France's Dassault want governments to secure jobs, technical knowhow and European militaries' ability to maintain sovereign independence over the intelligence that medium-altitude long-endurance drones are designed to collect." (Financial Times)
Trade deal would benefit US more than EU, Ifo study finds: "The US would gain more than the EU from a transatlantic trade deal, according to a study to be released on Monday. Its report concludes that a transatlantic agreement would reduce trade flows within Europe and damage many developing countries. Economists at the Munich-based Ifo institute, a German economic think-tank, found that a trade deal would lead to a 13.4 per cent increase in US income per head in real terms over the "long term" but only an average 5 per cent rise among the EU's 27 member states." (Financial Times)
Italy's coalition issues package of measures to boost economy: "Italy's fragile coalition government has closed ranks around a budget-neutral decree intended to boost the recession-hit economy while putting off decisions on controversial tax cuts. Enrico Letta, the centre-left prime minister, announced a package of some 80 measures on Saturday night after a difficult cabinet meeting lasting nearly six hours. Earlier he assured José Manuel Barroso, president of the European Commission, that Italy would keep to its target of a 2.9 per cent budget deficit this year." (Financial Times)
French companies adopt 'say on pay' to avert legislation: "French companies, under pressure from the Socialist government, have agreed a new set of corporate governance rules including a "say on pay" for shareholders and the creation of a special body to oversee compliance. The government, which came to power a year ago promising to crack down on high executive pay, has said it will withdraw a threat to introduce legislation in return for tougher self-regulation." (Financial Times)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +290.56 (+2.29%) at 12,977
Topix up +24.14 (+2.29%) at 1,081
Hang Seng up +282.03 (+1.34%) at 21,251
US markets
S&P 500 down -9.63 (-0.59%) at 1,627
DJIA down -105.90 (-0.70%) at 15,070
Nasdaq down -21.80 (-0.63%) at 3,424
European markets
Eurofirst 300 up +1.94 (+0.17%) at 1,176
FTSE100 up +3.63 (+0.06%) at 6,308
CAC 40 up +7.18 (+0.19%) at 3,805
Dax up +32.57 (+0.40%) at 8,128
Currencies
€/$ 1.33 (1.33)
$/¥ 94.65 (94.07)
£/$ 1.57 (1.57)
Commodities ($)
Brent Crude (ICE) down -0.21 at 105.72
Light Crude (Nymex) down -0.22 at 97.63
100 Oz Gold (Comex) up +2.70 at 1,390
Copper (Comex) up +0.03 at 3.23
10-year government bond yields (%)
US 2.14%
UK 2.06%
Germany 1.52%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.45bps at 90.45bp
Markit iTraxx Europe -3.32bps at 109.4bp
Markit iTraxx Xover -19.31bps at 452.67bp
Markit CDX IG +1.14bps at 83.36bp
Sources: FT, Bloomberg, Markit
