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- Data: China February M2 money supply +15.2% (vs. +14.9% expected)
- Data: China February New Yuan Loans 620bn (vs. 700bn expected)
- Not on bank bonus day they won’t: An Insider’s Tale from Louise Cooper
- Interesting article on the enormous changes sweeping rural China
- Landslide win to Western Australian Liberals in weekend election
- China’s commerce minister calls for clearer guidelines from the US re foreign investment
- Schaeuble on banker bonus limitations: “The regulations will not be weakened under any circumstances.”
- German Economy Minister Roesler: Will fight attempts to weaken the euro
- German workers set to buy more stuff
- Insert statement of the obvious here: “Italian politicians squabble over … “
- German Finance Minister Schaeuble: Italy has steadily improved … It would be wrong to change the path now
- China to allow Hong Kong, Taiwan Residents to Trade A Shares
- International Women’s Day – our ForexLive tribute
- Monetary printing presses generate rising equity markets
- UK News: PM Cameron under fire from his own fiscal watchdog
- UK News: Business Secretary Cable warns again on spending cuts
- Data – Saturday release: China February Retail Sales 12.3% y/y (vs. +15.0% y/y expected)
- Data – Saturday release: China February Fixed Assets Investment 21.2% y/y (vs. +20.7% y/y expected)
- Data – Saturday release: China February Industrial Production 9.9% y/y (vs. +10.6% y/y expected)
| Data: China February M2 money supply +15.2% (vs. +14.9% expected) Posted: 10 Mar 2013 01:54 AM PST
Reuters: China February lending misses expectations on central bank liquidity move |
| Data: China February New Yuan Loans 620bn (vs. 700bn expected) Posted: 10 Mar 2013 01:54 AM PST
More at Reuters: China February lending misses expectations on central bank liquidity move and at Bloomberg: China Feb. New Loans Were Less-Than-Estimated 620 Billion Yuan
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| Not on bank bonus day they won’t: An Insider’s Tale from Louise Cooper Posted: 09 Mar 2013 10:57 PM PST  Matthew 5:5 "Blessed are the meek: for they shall inherit the earth" This week, the European Union decided to cap bank bonuses. Being an alumni of the biggest payer of all – Goldman Sachs – I thought I would describe what it's like at a City firm on the most important day of the year (for the staff at least). Lloyd Blankfein, CEO of Goldman Sachs in 2009 may have described himself as just a banker "doing God's work" but Christian values wouldn't take you far in the City on bonus day (or any other to be honest). The Meek Inheriting the Earth? In my experience, the meek get zilch. The biggest payoffs are for the most belligerent and self-promoting. In many areas of the city, it is a team of people that are responsible for generating business and commission and how the pie is split favours the aggressive and bellicose, definitely not the meek (no matter what Blankfein says).
The goal for management is to pay each employee in their "Zone Of Indifference". Not so much that the employee is happy because then clearly they have been overpaid (it is management's goal to keep salespeople and traders insecure as then they work harder). But not so little that they are so p***ed off that they call a head hunter. The ZOI therefore has little to do with actual performance and more to do with perceived attitude. Different city firms also have different ways of calculating bonuses. So when I was at Goldman, it was a mix of the profitability of the firm, the division, the particular desk and supposedly individual performance. I think this is the best model as it does encourage team work. But this is not usual in the City's periphery. At interdealer brokers and hedge funds for example the rule is to "Eat What You Kill". So brokers get anywhere between 30 and 50% of their client commissions after costs – literally these firms charge their brokers for chairs and electricity. And depending on where they work, proprietary traders get a percentage of the profits they generate (but sadly for investors not always the losses). The most toxic scenario is when a new member of a team has been hired on a fixed compensation fixed year deal, no matter what business he or she brings in. If the revenue is not sufficiently buoyant then the new employee takes a disproportionate share of the desk's pot, leaving the older more loyal employees on significantly less. You can imagine how toxic this is for a team working 12 hours a day together. So what is it actually like on the Big Day? Well not surprisingly little work gets done and gossip spreads round the trading floor as fast as a takeover rumour through the market. The first most important piece of data is the average bonus amount – up or down and by what percentage. Then each individual tries to work out whether their bonus will be more or less than that. Exchange rates are also important if you work for a foreign bank, so there are forex calculations to do too (and if you play in the Big League and have hedged the currency risk on your bonus, there may be some hedging to close out). The average has normally got round the floor by about 7.30am. Next its play the "who how has done well and who's been screwed" game. This involves more body language analysis than Joe Navarrro. The time of the day that you are called in for the interview is also important – being left to the end as the markets close is a very poor sign. And clearly as most dealing lines are taped, there are plenty of whispered mobile phone conversations taking place at the edge of the dealing floor throughout the day. Wives who are desperate to know if they can buy that Gucci dress or book the Christmas get away to Dubai (sexist but sadly true in many cases). Lunches are hastily arranged to commiserate or celebrate with favoured clients (who if they're on the buy side dream to be paid as much). And if you get a Big Fat Zero then don't come back from lunch – spend the afternoon calling headhunters (or just getting wasted). And then of course there is a level of secrecy that the Freemasons would be proud of. Trying to discover a colleague's compensation is as difficult as an active fund manager outperforming the index on a statistical and sustained basis (after costs). I am told things have changed and there are now 360 degree reviews and more analysis and detailed staff appraisals. But in my days, the year's performance was summarised in one incomprehensible number in a three minute interview. Take the number and leave is mostly the rule (this is not a negotiation unless you hold a current competing job offer). The tales I know of bonus day: being given a stock bonus but without the paperwork thereby missing the chance to cash in; the first £1mn plus bonus for a trader who had no one to celebrate with (he worked so hard he had no time for a social life); or the analyst who was made redundant on bonus day and got so drunk and disruptive, he had to be escorted from the building. At the time, I was as wrapped up in the drama as everyone else but years later I can view it as the farce it really is. The Bonus game was not one I played well, but although the Lord did not buy me a Mercedes Benz, Goldman bonuses bought me a house (for which I am eternally grateful). |
| Interesting article on the enormous changes sweeping rural China Posted: 09 Mar 2013 03:59 PM PST Stepping away from the politics and markets for a little while, this article gives a fascinating picture of the changes in rural China, gleaned from social media as 800 million Chinese travelled to their home towns over the new year break.
Radical changes are now occurring in Chinese rural areas |
| Landslide win to Western Australian Liberals in weekend election Posted: 09 Mar 2013 03:58 PM PST Australia has a federal election scheduled for September 14. Polls at this stage are indicating a big win for the opposition Liberal party over the incumbent Labour government. A state election this weekend has reinforced those poll indications, with an incumbent Liberal state government being returned to power with a swing towards it.
Western Australia Liberals Re-Elected in Blow to Gillard's Labor |
| China’s commerce minister calls for clearer guidelines from the US re foreign investment Posted: 09 Mar 2013 03:54 PM PST
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| Posted: 09 Mar 2013 03:03 PM PST German Finance Minister Wolfgang Schaeuble said in an interview with an Austrian newspaper on Saturday that while he thinks a British exit from the EU would be ‘catastrophic’, the proposed bonus-limiting regulations will not be weakened. Britain tried to have them watered-down last week, to no avail. British exit from EU would be catastrophic, says German finance minister Wolfgang Schaeuble |
| German Economy Minister Roesler: Will fight attempts to weaken the euro Posted: 09 Mar 2013 03:03 PM PST
Weaker euro to stoke inflation and hurt Europe |
| German workers set to buy more stuff Posted: 09 Mar 2013 03:03 PM PST Germany’s regional public service workers will receive a wage hike of 5.6%, spread over two years. Germany’s European partners would like to see continued increases in consumer demand in Europe’s strongest economy, hopefully spent on imports from said partners |
| Insert statement of the obvious here: “Italian politicians squabble over … “ Posted: 09 Mar 2013 03:02 PM PST Fitch downgraded Italy on Friday (Mike brought you the news here) . This left Italian politicians squabbling over the impact. Yep, Italy needs more politicians squabbling. Italy rating summary
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| Posted: 09 Mar 2013 03:02 PM PST German Finance Minister Schaeuble gave an interview with Austrian daily Der Standard, published on Saturday, expressing optimistic views on Italy. |
| China to allow Hong Kong, Taiwan Residents to Trade A Shares Posted: 09 Mar 2013 02:54 PM PST From April 1, residents of Hong Kong, Taiwan and Macau to open accounts for yuan-denominated stocks (A shares) Continues the opening up the Chinese stockmarket A shares have previously been off-limits to foreign individual investors, who were only allowed to trade B shares China Allows Some Hong Kong, Taiwan Residents to Trade A Shares |
| International Women’s Day – our ForexLive tribute Posted: 09 Mar 2013 08:39 AM PST For those of you missed Adam’s post yesterday in respect of International Women’s Day click here to follow the thread and check out some great tunes from some brilliant female performers. And having posted one of my favourite UK singers yesterday, here I trawl further afield in honour of a much lamented rock goddess. Ok, so the day has actually been and gone but respect for women is a 365 day a year belief here, and what’s not to like when it gives us an excuse to post such great songs. |
| Monetary printing presses generate rising equity markets Posted: 09 Mar 2013 08:07 AM PST As the FTSE 100 hits 5 year highs and equities generally are enjoying a buoyant time this piece, published a couple of days in The Telegraph, is timely and well worth a read. The monetary printing presses of the world and the rise in equities are inextricably linked. |
| UK News: PM Cameron under fire from his own fiscal watchdog Posted: 09 Mar 2013 07:55 AM PST And while we’re on the subject of growing divides and concerns over plans to tackle the UK’s budget deficit here’s a piece from today’s Independent highighting the strong reaction from the Office for Budget Responsibility who PM Cameron claimed, incorrectly, were backing the government’s policies. |
| UK News: Business Secretary Cable warns again on spending cuts Posted: 09 Mar 2013 07:45 AM PST Vince Cable, the UK’s Business Secretary and member of the Coalition’s Liberal Democrat party, has today repeated his concerns over the planned spending cuts to reduce the budget deficit. Speaking at the party’s spring conference he has again made a scathing attack on the Chancellor’s plans for 85% of future deficit reduction to come from spending cuts and only 15% from tax rises. He also repeated his call for further capital investment, despite being put down like a naughty school boy already this week by PM Cameron and Deputy PM Clegg, his own party leader. This one is going to run and run and shows further evidence of the divide on tackling the deficit whilst stimulating growth, with more plans being revealed in the Budget speech on March 20th Read more here |
| Data – Saturday release: China February Retail Sales 12.3% y/y (vs. +15.0% y/y expected) Posted: 09 Mar 2013 05:23 AM PST |
| Data – Saturday release: China February Fixed Assets Investment 21.2% y/y (vs. +20.7% y/y expected) Posted: 09 Mar 2013 05:23 AM PST China Fixed Assets Investment excluding rural YTD y/y
Preview (with past results graph) posted here |
| Data – Saturday release: China February Industrial Production 9.9% y/y (vs. +10.6% y/y expected) Posted: 09 Mar 2013 05:23 AM PST |
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