- Home /
- Economics
Tsipras makes Merkel an offer she can’t refuse
How should we interpret this week’s volte-face by Tsipras and the Syriza government in approving austerity concessions to the Troika that had been specifically rejected by Greek voters in a referendum less than a week before? Short term, this would seem to provide an opportunity for celebration for creditors and financial markets in that the […]
Continue readingGreek referendum – all part of the Varoufakis game
Greece votes a resounding 61% “No†to the Troika debt proposals, yet financial markets remain largely unfazed, with European equity markets declining initially by less than 2% and 10 year bond yields for Italy, Spain and Portugal harden by less than 10bps. With traders having been weaned on a succession of last minute resolutions to […]
Continue readingMarket complacency may be its undoing
Welcome to the Q1 reporting season. If you hadn’t noticed yet, Easter came early this year (good for retailers, airlines etc) and there is a minefield of shifting currencies and commodity prices to adjust for as well as some decidedly mixed macro data coming out from the major trading economies. If you’re selling out of […]
Continue readingNovember non-farm payrolls – Bah Humbug!
I can hardly contain myself with excitement. US non-farm payroll data for November is out and the headlines are that the +321k MoM additions (+314k for the more relevant Private sector jobs) “smashes forecasts†(Guardian) and that “The dollar has gone through the roof†(City AM). With another month of unemployment at only 5.8% (try […]
Continue readingAirlines and oil prices
With fuel costs representing 45-50% of an airline’s operating costs and 35% of its revenues, it would seem self-evident that a significant movement in oil, and therefore fuel prices, would have an equally dramatic effect on margins; in particular when the industry’s margins are often the wrong side of 5%. The oil price however is […]
Continue readingP&G swaps Duracell at 7x EBITDA for shares in itself at 13x. Buffet wins again!
When a company such as P&G can sell 10 year debt at little more than a 3% coupon, then we should not be surprised at some of the pricing decisions being taken. With regards its subsidiary Duracell, it has a business in slow structural decline, which provides a drag to its own organic growth figures, […]
Continue readingMarkets find it tough to break the BTFD conditioning
Was the Friday rebound in equity markets another BTFD opportunity, or a possible suckers rally? Certainly, the wall of central bank liquidity over the past five years have reduced the market’s pricing mechanism to little more than a pavlovian response to the next turn of the central tap and where bad news can be good […]
Continue readingCorrelation <> causation, but sometimes maybe!
When I was but a nipper, a wise old Chairman of a large and successful financial information business gave me a valuable piece of advice:Â That mediators extract better margins in poor information environments and when price discovery is obscured. As his business, amongst others, picked off and commoditised market after market with real-time pricing, […]
Continue reading