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Interviews 14th March 2012

More Anglo-Saxon bankers should go to jail, says OECD’s William White

MADRID | Former colleagues at the Bank of England will read with some sense of shock what William White told the Spanish financial newspaper Expansión during an interview with one of its editors, Miquel Roig. Or perhaps not. After all, as Roig points out in today’s edition, “‘Central bankers are a strong brotherhood of mutual admiration,’ former ECB president Jean Claude Trichet used to say. William White was the one who dared…

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World economy 12th March 2012

Make the banks pay for their sins… with taxpayers’ cash?: US latest episode

NEW YORK | These are not the best days for being a banker. Banks lent irresponsibly, they were bailed out with public money, and then started a robo-signing foreclosures campaign. All while tightening the credit to small businesses. Now they are starting to pay their penance –some are taking even more of it than they were supposed to. Bank of America said that it will provide deeper than anticipated principal…

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Companies 9th March 2012

US huge corporate cash piles: 41% sits in foreign accounts

NEW YORK | It is the latest mantra on Wall Street: US companies are sitting on a lot of cash, $1,2 trillion, and that’s only counting non-financial companies in the Standard & Poor’s 500, says the Association for the Financial Professionals. This is a record: up 70% from 2007 and 200% for the past 10 years. This huge war chest makes a lot of people wonder: what are they waiting for?…

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In Europe 7th March 2012

This is not a Madrid-Brussels fight

By Fernando González Urbaneja, in Madrid | Explaining the Spanish public deficit problem in 2012 in terms of confrontation between the government of Mariano Rajoy and Brussels is wrong and misleading. So far Brussels has not penalised members who do not meet their programmes, but has rather come to help achieve the objective, with more or less enthusiasm and more or less requirements imposed. Brussels may begin proceedings for an excessive…

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World economy 7th March 2012

Wednesday’s graphic: the rat behind US employment numbers

Barclays analysts’ sent a warning about expectations over US employment data, which experts do not quite think are accurate. Ahead of the publication of official figures next Friday, here is a line we mustn’t forget: the white line depicting small and medium companies’ intentions of hiring. “Upcoming employment data could reveal the actual situation of the US economy,” the Barclays team said. “During February, we have noticed that employment numbers…

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Markets 7th March 2012

“Opening the kimono” of the US market-maker activity

NEW YORK | There are more than 20.000 market makers only in the US. Now one of them –a very, very big one, JP Morgan– has broken for the first time a code of silence among investment banks by revealing how much they rakes in as a market-maker. A market-maker quotes bid and offers prices for specific stocks or other securities that it holds. Its aim is to make money by…

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Markets 5th March 2012

The giant beast of Credit Default Swaps is getting nervous

NEW YORK | Officials from the International Swaps and Derivatives Association have stated that Greece has not had a ‘credit event’ and credit default swap payments will not be triggered, at least not yet. The body’s decision has reignited the debate over the usefulness of CDS. CDS are a US$32 trillion market, which is more than twice the US gross domestic product and more than twice the national debt. They…

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Spanish economy 5th March 2012

Spain is right to abandon a suicidal 4.4% deficit target

By Juan Pedro Marín Arrese, in Madrid | Mervyn King sharply pointed out that banks are global in life but turn national in dying. The opposite can be applied to deficit targets. When you enjoy a comfortable budgetary position, you are able to fix them at your own wish. Brussels may get the sulks if you go beyond certain limits and fall into excessive overruns. But it can do very little…

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World economy 2nd March 2012

US GDP in 1Q12, seriously injured

By Tania Suárez, in Madrid | Wall Street has been weighed down by a worse than expected purchasing managers index of manufacturing sectors or manufacturing ISM (Dow Jones: +0,33%; S&P 500: +0,33%; Nasdaq: +0,39%), which has disappointed both in its final reading and in its composition. Furthermore, the weak data of personal earnings and expenses in American families cast doubts regarding 1Q12 consumption. In fact, experts at Barclays point out: “we…

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World economy 2nd March 2012

Bernanke 1, Draghi 0

By Luis Arroyo, in Madrid | The US economy is on its way up to the growth heaven while others, like Europe, live under the knife. Broad money or M3 volumes have increased in the US by 10pc. In terms of what it is strictly required, the Federal Reserve is fulfilling its duties. The broad money supply includes factors of money supply and money and credit demand, which means that there is activity in all money and financial markets. The…