First Impressions

Hugh Vyvyan, Saracens Rugby Team – Transitions: Lessons on a career change

“You have to work incredibly hard to survive. That’s a fact of being a rugby player, and that’s a fact of life.”

Hugh Vyvyan, former player of the Saracens Rugby Team, discusses the importance of working as a team and what individuals need to do to better both themselves while contributing to their group, whether it be a sports team or financial firm. Vyvyan uses his own personal experiences with the Saracens team to illustrate how successful organizations focus more on its people rather than being driven by achieving results. Vyvyan noted how the Saracens organization did a complete overhaul on its philosophies by taking better care of its players and getting them to buy into a system where everyone contributes, whether or not their contributions were noticed during every game. However, all this begins with the individual. Hard work, making oneself well-rounded and becoming focused on the team first is what drives organizations to be great for years to come.

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Quote of the Day

“The BOJ seemed to take a leaf out of Sun Tzu’s ‘The Art of War’ with the swift timing and formidable scope of its new monetary expansion. Kuroda reasserted his strong and clear commitment to do ‘whatever it takes’ to achieve the 2 percent inflation target.”

Sachin Gupta, executive vice president and Tomoya Masanao, head of portfolio management for Japan at Pimco in the story, “Pimco Sees BOJ ‘Art-of-War’ Shock as Powerful as Original Move”.

Lead Stories

JPMorgan to cut 3,000 more retail banking jobs
JPMorgan Chase & Co (JPM.N), the largest U.S. bank by assets, said it would cut 3,000 more jobs than previously expected in its retail banking division.
The bank said it would reduce 4,000 jobs in its card, merchant services and auto unit, up from the 2,000 previously announced. The bank is also cutting 7,000 jobs in its mortgage banking unit, up from 6,000.

Pimco cuts fees
Dan McCrum – Financial Times
A good catch from FundFire, on an offer of reduced fees for 12 months to a client thinking about leaving Pimco. The fee structure was revealed in an memo to the San Luis Obispo County Pension Trust (SLOCPT) by its consultant Wurts & Associates, which has recommended that clients terminate their relationship with Pimco following the departure of chief investment officer Bill Gross for Janus.

Pimco Sees BOJ ‘Art-of-War’ Shock as Powerful as Original Move
Mariko Ishikawa – Bloomberg
The Bank of Japan’s expansion of monetary easing a week ago was as significant in its scale and impact as the original stimulus announcement 19 months earlier, according to Pacific Investment Management Co.

Glory To The New Bond King
Matt Schifrin – Forbes
Bill Gross’ spectacular fall from the top of the bond market has put tens of billions in play at a time when minuscule yields demand a fixed-income superstar. A brilliant, battle-scarred billionaire, Jeffrey Gundlach, stands ready to be coronated.

BlackRock’s bond funds have biggest monthly inflows since 1998
Jessica Toonkel – Reuters
BlackRock Inc’s bond funds posted record monthly inflows of $5.2 billion in October, the most investors have poured into the firm’s bond funds since May 1998, according to data provided to Reuters from Morningstar.

ECB Signals Readiness for Further Stimulus
Brian Blackstone – WSJ
The European Central Bank sent a strong signal Thursday that it is prepared to act more aggressively to combat ultralow inflation by buying large amounts of private-sector debt and perhaps even government bonds.

Vietnam makes rare push into bond markets
Elaine Moore and Robin Wigglesworth – Financial Times
Vietnam is selling a rare new government bond as a rally in Vietnamese debt pushes the country’s borrowing costs to record lows.

Kazakhstan: Sovereign sells first Eurobond for 14 years
Lucy Fitzgeorge-Parker – Euromoney Magazine
Falling oil prices and fears of an imminent currency devaluation failed to dampen demand for Kazakhstan’s first international sovereign bond for more than 14 years in October.

Central Banks

Mr. Draghi Steadies the Ship, Set Course For Payrolls
David Cottle – MoneyBeat – WSJ
Optimism about the U.S. economy’s prospects and a punchy performance from European Central Bank chief Mario Draghi saw Wall Street notch up yet more record peaks for both S&P and Dow Thursday, setting European markets fair as they head into the week’s final session.

Draghi Stokes Speculation ECB Set to Intensify Stimulus
Simon Kennedy, Stefan Riecher and Mark Deen – Bloomberg
Mario Draghi is stoking investor speculation that he’ll intensify stimulus for the euro area after indicating he has the backing of policy makers to do so.
With the European Central Bank president downplaying dissent in his Governing Council, preparations for more expansive action and a 1 trillion euro ($1.2 trillion) target for boosting the balance sheet suggest momentum is shifting toward a proposal for broader bond-buying, perhaps in December.

ECB Needs More Voices, Greater Transparency to Save Euro
Michael J. Casey – MoneyBeat – WSJ
The European Central Bank should air its dirty laundry in public. Although markets are celebrating ECB President Mario Draghi’s apparent success in quashing dissent over monetary stimulus proposals, we don’t really know how unified or divided the central bank is.

Celebrity central bankers
Kenneth Rogoff – Business Standard
Why do the comments of major economies’ central bankers command outsize attention nowadays? It is not as if they change interest rates all of the time. Nor have they developed new, more robust models for analysing the economy. On the contrary, major central banks’ growth and inflation forecasts in the years since the financial crisis have consistently overestimated both growth and inflation – and by wide margins.

RBI deputy says ‘long way’ to go before inflation eases
India’s inflation has a “long way” to go before it eases because of high input costs, while the reasons for elevated food price inflation remain “structural,” Reserve Bank of India Deputy Governor H R Khan said on Friday.

Fed’s Mester sees 2015 rate rise, confident on inflation
The U.S. Federal Reserve will likely raise interest rates next year since inflation, while a bit low now, remains stable and should rise to target by the end of 2016, a top Fed official said on Thursday.


Ruble Jumps on Bets Russia to Act to Stem Rout as Ukraine Flares
Vladimir Kuznetsov, Lyubov Pronina and Ksenia Galouchko – Bloomberg
The ruble ended a four-day rout as speculation mounts that Russia’s central bank will take new steps to stem the worst weekly rout in five years as tension worsens in Ukraine’s east.
The currency climbed 1.2 percent to 46.30 per dollar at 4:09 p.m. in Moscow, after falling as much as 3.7 percent earlier. The ruble retreated 7.1 percent this week, the most since at February 2009 on a closing basis. Ten-year government bonds fell for a third week, while wagers for interest-rate increases rose for the first time in eight days.

Fending off the great Russian BearWhale
Izabella Kaminska – Financial Times
Back in March, when one US dollar still bought you 36 Russian roubles, we noted how the Kremlin’s attempt to publicly trash-talk the dollar by threatening to drop it as a reserve currency if and when the US was to impose sanctions was largely a propaganda tactic deployed to confuse the economically ignorant about the reality of who was really dependent on whom.

Yen depreciation back on track after safe-haven strengthening
Solomon Teague – Euromoney Magazine
A momentary strengthening of the yen amid market panic coincided with reports the government might be having second thoughts about key planks of the reform agenda – the consumption tax and a weak yen. But analysts insist there has been no change of policy, but pension and energy reforms hold the key.

Nigeria’s Currency Falls to Record Low
Josie Cox in London and Patrick McGroarty in Johannesburg – WSJ
Nigeria’s currency plunged to record lows Friday after emergency measures by the central bank failed to reassure investors concerned that falling oil prices could derail Africa’s top economy and crude producer.

Indexes & Index Products

SEC Lets Eaton Vance Offer New Kind of ETF
Kirsten Grind – WSJ
The Securities and Exchange Commission delivered a win to the $2 trillion exchange-traded-fund industry Thursday night, approving a new type of fund structure that doesn’t have to disclose its holdings.

UK ETF trading activity hits record high in October
Anna Fedorova – Investment Week
The London Stock Exchange (LSE) has seen record ETF trading in October as investors turned to passive vehicles for tactical exposure.


3 Ways to Trade Gold Now
Steven M. Sears – Barrons
Goldbugs, like ideologues and passionate lovers, possess extraordinary convictions. They need them now more than they have in decades. The yellow metal is undergoing a powerful decline that will challenge their beliefs in ways many goldbugs have never experienced.

China Gold Buying Means Price Floor to Standard Chartered
Debarati Roy and Nicholas Larkin – Bloomberg
The cheapest gold in four years is proving irresistible for shoppers in China and India, where rebounding demand may signal an end to the longest price slump in more than a decade.

Gold firms plan drastic cuts as bullion sinks
Reuters (via CNBC)
Struggling gold producers plan increasingly drastic measures such as scrapping dividends, cutting jobs, halting projects and shutting mines to survive the latest price plunge, but not all of them will make it.
Gold tumbled to a more than four-year low of $1,137.40 an ounce this week, rekindling memories of last year’s 28 percent drop to $1,196. That fall put an abrupt end to years of over-spending on expansion projects and forced producers to cut costs.

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