James Alexander via Historinhas | Market Monetarists must hope that Mark Carney doesn’t seek to defend the pound, but let currency weakness do it’s magic, monetarily offsetting any expected economic weakness. A drop in the pound is not like a drop in the price of a company after a profit warning that reflects a weaker future.
Miguel Navascués | There are people who still believe the markets are efficient. When I say people, I mean a lot of people. Some of them unwittingly, of course. But the “progressive” academics, those who theorise about the matter, they believe in it consciously and defend it militantly. Its greatest defender is Eugene Fama, who won a Nobel Prize for Economy for this just a few years ago. The only thing to say is that Eugene believes that the 2008 financial crisis demonstrated the efficiency of the markets.
Francisco Vidal (Intermoney) | In the future it will be more difficult to generate inflation. We will see structurally lower rates, which should not be confused with its performance in the short-term.
Larry Summers has written a perceptive analysis about the Fed’s confusion (and that of all the central banks, by the way) over what they are doing. Last Wednesday he made a brief reference to the FOMC’s decision not to raise rates, with the Fed once again being forced to withdraw from its previous plan of action. The total failure of ‘forward guidance,’ which has only served to make the Fed’s prose even more tedious to hide their misgivings.
UBS | Economic data points to stabilization, but manufacturing and private investment weakened further. FAI growth’s disappointing slide to 7.5%y/y was mostly dragged down by a high base, weaker property investment, and sharper weakening of manufacturing.
Liu Caiping and Han Wei via Caixin | Domestically listed Chinese stocks failed to make the grade for inclusion in a key emerging markets stock tracker after their third attempt in three years, as index complier Morgan Stanley Capital International (MSCI) said more time was needed to see if recent reforms to China’s market will be effective.
Tao Jingzhou via Caixin | It’s been 15 years since China joined the World Trade Organization and yet China is still waiting for the WTO to grant market economy status. During this period, some Chinese businesses have expanded overseas while others have been accused of flouting international anti-dumping rules.
James Alexander via Historinhas | The Federal Reserve and other central banks like to see themselves as “data-dependent”. They sit in objective judgement of the facts of the economy as revealed by “data” and then portentously decide whether to attempt to alter the future facts with monetary tightening or loosening.
Spain receives less investment from China due to its lack of knowledge of the market. The UK clocks up almost 20 billion dollars in investments from China, while Spain is behind countries like Hungary or Romania. Qian Jiannong is deputy chairman of the Fosun group, amongst other things. This is a Chinese conglomerate which made 1.1 billion euros in 2015.
Citi | FinTech Remain Hot: According to the latest data published on 25th May by CB Insights and KPMG, there was a revival in FinTech investments in 1Q16 from a soft 4Q15. A total of 218 investments were made by VC-backed FinTech companies in 1Q16 raising $4.9bn in funding globally, almost doubling yoy and up 160% qoq. The trend for FinTech is noticeably more resilient than total VC funding for all sectors (-8% yoy). Total FinTech investments (including PE, hedge funds and corporate investments) were at $5.7bn, up 97% yoy and 84% qoq.