Brian Bollen's Blog

PIMCO: Fed Reaction

By Tiffany Wilding, North American Economist at PIMCO

• As widely expected the Federal Reserve raised their target interest rate by 75 basis points taking the midpoint of their target rate range to 2.35% - just below their estimate for a neutral policy stance in the longer run.
• At the press conference Chair Powell also guided that “modestly restrictive” monetary policy is warranted by the current economic fundamentals, including elevated inflation, and mentioned that another outsized move in the Fed Funds rate may be necessary in September in order to ensure monetary policy is restrictive.

The US economy is teetering on the brink of recession

The US economy is teetering on the brink of recession, World Economics has stated this morning.

Business activity indicators all remain close to the 50 "no growth" line. Business confidence is actually sitting right on the 50 no-growth fence. Both sales and market growth indices fell in July, the former just below and the latter just above 50. The staffing index rose sharply year-on-year, but remained at a lowly reading of 48.1. The overall sales managers index remained marginally under the 50 no growth line. Prices continue to rise, but at a rapidly diminishing rate, perhaps the most encouraging sign this month.

PIMCO: Corporate Credit - Capitalising on Potential Disruption

A Q&A with Christian Stracke, global head of credit research & Adam Gubner, head of US corporate special situations at PIMCO

Record corporate leverage and challenging macroeconomic factors are combining to create a compelling investment environment for managers with flexible capital. Christian Stracke and Adam Gubner explain why.

Why is the credit market compelling right now?

Stracke: There are three key reasons. First, there is a limited supply of flexible capital. Second, there are global macro headwinds. And third, we are seeing a significant increase in corporate leverage. The market is increasingly fragile against a backdrop of rising rates, higher inflation, and slowing growth – this supports an increasing demand for that flexible capital.

Can you explain the need for flexible capital?

Gubner: Demand for private credit is growing from a variety of factors. Assets under management in the private debt space reached a 20-year high of $1.2trn in 2021 from $50bn in 2001. The sheer growth of the market means borrowers often have a greater certainty of execution, while the private market is often more flexible for the customised financing terms required to meet certain unique borrower needs.

One question I hope I would ask

There is one question I hope I would ask re events in Downing Street over the past 48 hours or so if I were an aspiring journalist trying to make a name.

Is there any suggestion that one happy event might have been induced in order to distract attention from other not so happy events?

If someone doesn't ask it, there is something even more rotten than I thought in the state of British journalism.

Boris Johnson must go

Boris Johnson must go. After the fiasco involving Christmas parties that his own shambles of a government decided the rest of us must not have, he must resign, not least because before long he will run out of others who can resign to protect him.

Talk about one law for them, and one for us? I seem to remember that the last incumbent of senior office who tried to run Britain in such a cavalier dictatorial fashion sparked off a civil war, and eventually lost his head.

Boris Johnson MUST resign. Or be defenestrated by his party.

Doctor Why?

I've said it before, but last night's episode of Doctor Who on BBC1 was the worst ever, and I have been watching the programme since the first episode was broadcast on November 23 1963.

Words fail me, they really do. Apart from anything else, the incomprehensible storyline, the endless shouting and the grotesque overuse of the sonic screwdriver (oh, sorry, it's been renamed 'the sonic') and the apparently slavish box-ticking approach to scripting and casting, no one on it could act their way INTO a paper bag, let alone out of one.

If Doctor Who were a domestic pet, it would be making one last visit to the family vet...do us a favour, BBC, put it down.

Airdrie and the International Monetary Fund

Well, I never thought I would see Airdrie (my home town in central Scotland) and the International Monetary Fund in the same sentence, but it's there for all to see on the IMF website:

https://blogs.imf.org/2021/10/31/not-yet-on-track-for-net-zero-climate-threats-demands-more-ambitious-global-action/

 

Hats Off To Wilfried Zaha

Hats off to Wilfried Zaha for refusing to participate in the ludicrous virtue-signalling 'taking a knee' before a sports event: https://www.bbc.co.uk/sport/av/football/56389709

 

Cressida Dick MUST resign: Part Two

Read the BBC report on the women's demonstration yesterday evening, and ask yourself if, should this be a wholly accurate version of events, the police action is remotely appropriate and proportionate: https://www.bbc.co.uk/news/uk-56389824

In order to prevent a risk of spreading Covid-19, they had to handcuff and arrest people, who were protesting about the abduction and murder of a woman by a practising member of that force.

Policing by consent? Don't make me laugh. This completes the UK's journey over the past 12 months into being a dystopian totalitarian police state. Qualitatively speaking, is there any difference between what the Met are doing and what the police in Burma are doing?

I think not.

Cressida Dick MUST resign, followed swiftly by the home secretary.

 

 

Cressida Dick MUST resign

Cressida Dick MUST resign.

I am no fan of public demonstrations, and am usually agnostic about aggressive containment thereof.

But even I thought that the London police might show SOME sensitivity in policing the demonstration by, mostly, it seems, women, prompted by the abduction and murder of a woman in respect of which a member of that force has been accused.

I watched in astonishment at some of the scenes on our tv screen last night depicting policemen physically attacking demonstrators and arresting some with what looked like a degree of force bordering on brutality.

Cressida Dick has been in her post as head of the Met for long enough for blame for this culture of macho aggression (displayed by female police as well as male) to be laid firmly at her door.

She simply MUST resign. If not, she MUST be sacked.

Bradley Walsh: Why?

Would someone please explain to me why Bradley Walsh is everywhere on telly? From sub-standard game shows to sub-standard travel shows to sub-standard Doctor Who.

Now, I learn, he is to be Pop Larkin in what I fully expect to be a sub-standard iteration of a rehashing of The Darling Buds of May.

Why?

Non-fungible token technology

Just when I thought I had seen every variety of snake-oil imaginable, along comes another.

I had never heard of non-fungible token technology until this week and have just looked it up, discovering that it is in effect cryptocurrency without the underlying solidity.

 

Löw to quit as Germany football national coach

After 15 years as the national coach of the German national soccer team, Joachim Löw will leave his post after the postponed 2020 Euro Championships take place.

https://www.faz.net/aktuell/sport/fussball-em/joachim-loew-tritt-nach-der-fussball-em-als-bundestrainer-zurueck-17235022.html

What a waste of time The Dig is

Watched The Dig last night. What a waste of time.

 

There was a vaguely interesting plot that might have made a 60-minute film but they dragged it out and parachuted in a triangular relationship sub-plot that was meaningless, but some might have thought edgy and provocative. It totally distracted attention from the plot itself to no good effect, that I could make out.

 

You hardly see any archaelogy and virtually none of the Sutton Hoo treasure, or even replicas thereof.

 

And the accent that Ralph Fiennes sports is probably very authentic but combine the authentic ooh arrs with his authentic muttering and his speech was virtually unintelligible.

 

If you haven't seen it, don't bother, go and boil your head instead...

I thought vaccine was going to be a 'get out of jail free' card

Almost since the start of the Covid-19 hysteria, we have been told that vaccine is THE ANSWER.

But I have been reading articles this weekend that suggest that even if 80% to 85% of people are vaccinated, we must still carry on with the ridiculous 'anti-social distancing' measure that forces people to converse while standing the best part of eight feet (in old money, you younger readers) away from one another.

This is not natural but a new wave of hype is starting about the new spike in deaths (1,000 to 1,500 a day in the UK according to some calculations) that will follow if we don't carry on with the practice till at least the end of 2021.

If vaccines are not going to enable something vaguely resembling normality to return, what is the bloody point of the expense and effort involved, I ask myself. Cue trolls.

But there is the rub. I have said from the start that governments around the world who have accidentally acquired total dominion over the everyday life of every citizen under their iron fist without firing a shot are not going to sacrifice said dominion.

We live in a new permanent. I, for one, feel I am going slightly bonkers, but that matters not a jot as we must accept endless privation of liberty so our various health services will not be overwhelmed.

And remember, as the late great Frank Herbert told us: An immobile population is easier to control.

 

Boris Johnson clearly hasn't been paying attention

If Boris Johnson, the current prime minister of the UK and Northern Ireland, thinks that a visit to Scotland by him will calm down tension being created by the Edinburgh parish council (copyright former prime minister Blair), then he clearly has not been paying attention.

All other issues aside, you and I are under house arrest, because to go outside our home will cause people to die and overwhelm the NHS, but Johnson can undertake travel that is clearly not necessary with legal and medical impunity?

Following the science? I don't think so.

Investor confidence decreased in January: State Street

State Street Global Markets has today released the results of the State Street Investor Confidence Index (ICI) for January 2021.

The Global Investor Confidence Index decreased to 100.7, down 3.8 points from December’s revised reading of 104.5. The fall in Investor Confidence was driven by a 7.3 point decline in North American ICI to 96.0.

A quick explanation of bitcoin

What is bitcoin? I often ask myself that question.

I am not an economist, but I have spent my entire adult life in and around the international financial industry and I will unhesitatingly label bitcoin and other so-called cryptocurrencies a crock of shit.

If you are ever tempted to 'buy' bitcoin, because everyone else seems to be doing so, then go and lie down in a dark room till the urge wears off.

Have you ever stood and watched a bunch of street hustlers separate a larger bunch of mugs from their money by persuading them to buy a bag that they are clearly told has nothing in it?

I have, and fell for it, once. I don't think I have ever felt so stupid in my life, and believe me, I have felt stupid more times than I care to remember.

That, in essence, is bitcoin, without the honesty.

A brown paper bag with nothing in it.

I would not touch it with someone else's bargepole.

Doesn't Nicola Sturgeon look exhausted?

Watching Scotland's 'first minister' Nicola Sturgeon on the news yesterday evening, one thought sprang immediately to mind: does she not look exhausted? Absolutely exhausted?

 

Plague Fiction

Mrs B and I watched another very interesting cobbled-together documentary on BBC Four comparing Covid-19 with the bubonic plague the other evening. If you haven't seen it, it makes great viewing, even reassuring viewing, not least because it puts Covid-19 in some much-needed long-term perspective.

The Plague in the mid-14th century killed 50% to 60% of the population of Europe, compared to the statistically meaningless tiny percentage dying with Covid-19 today (note: I always make a distinction between dying of, and dying with).

Deutsche Börse acquires majority position in Quantitative Brokers

Deutsche Börse is acquiring a majority interest in Quantitative Brokers, an independent provider of advanced execution algorithms and data-driven analytics for global futures, options and interest rate markets. The fintech company has operations in New York, London, Sydney and Chennai.