First Impressions

Anybody out there?
Jon Matte
“Hey Jon, what with the Friday after Thanksgiving being a super busy and important financial day, you can take the editor’s seat. We need somebody like you. Thanks, buddy.”

No, it’s ok, I offered. Here in Norway, the day after Thanksgiving is known as “Friday” (ok, “fredag”, to be precise), and Thanksgiving Day itself is slyly referred to as “Thursday” (“torsdag”), because nobody’s ever heard of it. So it’s just a work day for me. Even so, I find myself at a loss for a heavy financial topic to write about, so I think I’ll just move on to the stories. Hope you’re not at work today if you’re in the States, but if you are, have a great day.

…and to everybody else around the world, hope you HAD a great day.

Quote of the Day

There is no consensus on how, or even if, these policies work. In a real sense, they are making it up as they go along.

Mark Cliffe, chief economist at ING bank, in FT’s “Central bankers’ diverging paths could create damaging disharmony”

Lead Stories

Central bankers’ diverging paths could create damaging disharmony
Claire Jones and Ralph Atkins –
For the past six years, the world’s main central banks have sung largely from the same hymn sheet – shoring up financial systems and printing money to support economies. Now, they are doing their own thing.

***JM: Bluntly, harmony didn’t exactly bring us a world without risk or turmoil; so it’s not clear to me if disharmony will make it any worse. Anyway, I’m still stuck at the part where I’m supposed to believe that there really is a cause-and-effect relationship between what a central bank does and what follows in the global economy. It looks more to me like dancing on the beach in order to change the way the waves are coming in.

Venezuela central bank denies transactions with Wall Street
Venezuela’s central bank president denied on Thursday that the institution is carrying out any transactions with Wall Street banks, a day after a senior government source said it was evaluating a swap agreement involving its gold reserves.

***JM: We should make a denial song.

Draghi Said to Share Exchange-Rate Views With Central Bankers
European Central Bank President Mario Draghi has told fellow central bankers that a euro exchange rate above $1.30 harms the competitiveness of southern European exports, said the head of Hungary’s central bank. On Thursday, an ECB spokesman denied that Mr. Draghi made the comments on exchange rates.

***JM: Tis the season to deny stuff, fa la la la la…

Yuan Bonds Gain Nicknames Overseas
Fiona Law – MoneyBeat – WSJ
Asian cities keen to grab a slice of the booming offshore yuan market are coming up with imaginative names to label new types of debt in the Chinese currency. It can be confusing for investors, especially those from outside Asia, but they are all yuan-denominated bonds issued outside mainland China.

***JM: Formosa folks, yuan a nickname that creates interest.

Thai stock exchange head warns over tapering
Michael Peel in Bangkok –
The expected end of the US international bond-buying programme poses more of a threat to Thai financial markets than this week’s mass anti-government protests in Bangkok, according to the stock exchange chief.

***JM: A reminder that lots of things around the world are connected…

What Do China’s Trusts Want to Be When They Grow Up?
Dinny McMahon – MoneyBeat – WSJ
China’s trust companies are facing an existential crisis. In only five years they have gone from a mere rounding error in China’s lending data to the major plank of the country’s shadow banking system, with more than 10 trillion yuan ($1.64 trillion) in assets under management.

Central Banks

BoE’s Carney: liquidity support for CCPs is a ‘last-resort option’
Central counterparties (CCPs) will receive liquidity support from the UK central bank only as a last resort, Mark Carney, governor of the Bank of England (BoE) has warned – under all other conditions, a CCP must be able to get by on its traditional waterfall of financial resources.

BOE Leans Against Housing Bubble. Ends Funding for Lending Scheme
Alen Mattich – MoneyBeat – WSJ
The Bank of England has finally taken note of Britain’s accelerating house prices.

BOJ Stuck with Massive JGB Holdings
With price increases still far away from its stated mission of achieving 2% inflation, there is little focus on when the Bank of Japan will wind down its massive asset purchasing program.


UBS Restructuring Forex Unit
UBS AG is shaking up its investment bank, and has removed a top foreign-exchange executive, amid a burgeoning investigation into potential manipulation of currency markets.

Investors Raise Bets Against the Yen
Investors are piling into bets against the yen, taking another run at a trade that proved lucrative for some of the industry’s biggest money managers earlier this year.

FX Bridge Preps Options Volatility Commentary
Foreign exchange spot and options trading platform provider FX Bridge Technologies is rolling out two new subscription-based FX volatility measures designed to help traders and investors identify trading opportunities in FX options and less common currency pairs.

Bitcoin Index Seeks Clearer Value Picture
One bitcoin is now worth more than $1,000. Or is it? The answer depends on where you look.

Bitcoin, Litecoin, We’re Well Into South Sea Bubble Territory Here
Tim Worstall – Forbes
We have all the makings of a classic bubble here. Yes, Bitcoin has gone through $1,000 but that’s not the real signifier of us being in a bubble. Rather, all of the other digital currencies are rising strongly in value as a result of Bitcoin’s rise. And that does start to remind those who have read their economic history of the times of the South Sea Bubble.

***JM: That, and simply the proliferation at all of the me-too alternatives. Even so, digital, non-national currency appears to be genuine disruptive technology, so the mania that’s developing is happening over the top of some interesting fundamental questions about whether currencies will be shifting their structure over the next couple of decades. And there’s nothing in human history we can compare to today’s instant, global economy; for me, at least, there aren’t any automatic answers to those questions.

A Prediction: Bitcoin Is Doomed to Fail
The developers of bitcoin are trying to show that money can be successfully privatized. They will fail, because money that is not issued by governments is always doomed to failure. Money is inevitably a tool of the state.


Gold Bears Persist as Prices Near Year’s Low on Fed: Commodities
Nicholas Larkin – Bloomberg
Gold analysts are bearish for a second week as prices head for the biggest monthly drop since June and approach this year’s low on speculation the Federal Reserve will curb stimulus as the economy strengthens.

Nervous gold market may rule weak
Business Line
Gold prices in the domestic spot and futures market are likely to trade with a negative bias as the global market shows signs of nervousness, particularly over the US Federal Reserve plans to cut its stimulus programme.

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