The FTSE 100 index of the most valuable companies on the London Stock Exchange has soared to a record high as investors shrugged off concerns over Donald Trump’s trade wars.
The FTSE 100 had the 9,000-point mark in its sights on Thursday, as it climbed to 8,979 points, above its previous all-time high of 8,908 points.
Stock market indices are not inflation adjusted. It’s still 750 points below Sept 2019…..when inflation adjusted.
Thames Water’s bonds have crashed to a record low after the Environment Secretary said it was stepping up contingency plans for the struggling utility giant.
The price of Thames Water’s debt fell to as low as 67p on Friday, down from 70p at the start of the month, as investors took flight amid fears the Government could nationalise the business.
3% is a crash.
In something as illiquid as corporate bonds.
A special administration regime (SAR) would wipe out the bulk of Thames Water’s borrowings, although it would also leave the Government forced to foot the bill for its running costs.
You know what? It wouldn’t. The cram down would be of that debt which cannot be repaid. Not of all debt, but of that which it impossible to repay. Because a cram down of more than that would be straight out theft.
Further, the Tele here – and I suspect the conversation more generally – is missing the vital distinction between Thames Water debt – the regulated utility – and Kemble Water debt, the unregulated holding company. Kemble might well be toast. But that doesn’t wipe out the debts of the opco…..
As Stephen Miran, the head of Trump’s council of economic advisers, has suggested, this might be achieved by imposing a withholding tax on income generated by US assets, or by converting foreign holdings of US Treasuries into 100-year bonds.
Either or both are – effectively, even if not in law – default.
Jeebus.
The downgrade sent the benchmark S&P 500 as much as 1pc lower in early trading, while the tech-heavy Nasdaq Composite sank more than 1.4pc.
This led to the likes of Tesla and Apple falling by 4.8pc and 3.3pc, respectively, although they later trimmed the scale of their losses.
Might it be that it was falls in Apple and Tesla which reduced the indices?
When interest rates were at record lows of 0.1pc during the pandemic, the Bank earned far more on the returns from government bonds than it had to dish out in interest.
By the end of 2021, the Old Lady was in profit to the tune of £123.9bn.
But that was quickly eroded when interest rates started rising, with a “consistently higher Bank Rate” resulting in “large interest losses” of £18.5bn in the last financial year alone, according to the Office for Budget Responsibility (OBR).
But that’s not all. The Bank is also actively selling its stockpile of gilts back to the market in a move called quantitative tightening (QT), crystallising billions of pounds of losses for the taxpayer.
Many economists, politicians and central bankers believe this is a mistake, as it means that some of the bonds Threadneedle Street bought during the crisis are being sold at knockdown prices.
In some of the most extreme cases, bonds bought for the equivalent of £1 have been sold for 28p.
These so-called “valuation losses” will dwarf the money being paid out in interest if the Bank continues to actively reduce its stockpile of gilts by around £48bn a year.
No. By definition the valuation losses equal the interest losses over the term of the bonds. Because that’s what is driving the current low capital values of the bonds – that their coupon is lower than the general interest rate.
That’s what the crystallising is – losses which are going to happen anyway are being crystallised into a current capital loss, today, rather than being an interest loss over the years.
The total cost to the taxpayer over the scheme’s lifetime is currently estimated at around £150bn by both the Bank of England and OBR. That’s the equivalent of a £5,000 tax on each household.
All of which is an interesting lesson for the MMT enthusiasts, no? We did just print money and go spend it. And look how cheap that is!
Homeowners aged 60 and over are sitting on a record £2.95 trillion worth of property, with 98 per cent of this mortgage-free, according to an analysis that lays bare the extent of the UK’s generational housing divide.
The calculations, by the estate agency Savills, showed £2.89 trillion of mortgage-free property being held by over-60s who were residential homeowners and only £60 billion worth of mortgages, 2 per cent of the total value of their homes.
The under-45s had £1.56 trillion in property of which 47 per cent, or £734 billion, was held in mortgages.
The indebtedness increased sharply the younger the homeowner became: the under-35s had £600 billion worth of property, with a total of £300 billion of mortgages outstanding.
Younger folk have mortgages, older folk don’t.
And?
Two little-known Wall Street companies experienced an “unusual” stock price surge before an announcement naming Donald Trump’s sons to the board, raising fears over potential insider trading.
Shares in drone maker Unusual Machines, which listed on the Nasdaq last year, surged by more than 220pc in the four weeks leading up to the recruitment of Donald Trump Jr on Nov 27.
Meanwhile, shares of fintech group Dominari Holdings, which is headquartered in New York’s Trump Tower, were catapulted 580pc higher in the six weeks before bosses announced Donald Trump Jr had joined its advisory board.
Eric Trump, another of the US president’s sons, joined at the same time.
As ever, check short dated out of the money options trading.
Because, yes, there are still insider traders dim enough to do their trading that way…..in the first place everyone would look.
Russia’s rouble has become the world’s best-performing global currency as Donald Trump’s tariff war upends financial markets.
The rouble has strengthened 38pc against the dollar since the start of the year, according to data compiled by Bloomberg, following a dramatic fall in confidence in the US currency.
I’d not put all that much weight behind the performance of something that’s not wholly and freely convertible.
Meanwhile, the rouble has been buoyed by record-high interest rates of 21pc as the Bank of Russia battles to temper inflation and support Vladimir Putin’s struggling war economy.
Also, over time, FX will follow relative inflation rates. So don’t expect it to last all that long….
Nasdaq call volumes spiked in the hour before Trump unveiled his turnaround, as traders bought the right to purchase shares at a certain price.
Unusual Whales, a research firm that tracks market data, said that some of the trades were what is known as “zero DTEs”, meaning zero days to expiration.
An analyst at the firm said: “These options, as the name implies, expire the same day as purchase, making them much riskier than farther-dated options. The sharp increase in equities [last night] created exponential gains for those correctly positioned.”
If you are going to insider trade then don’t do it in out of the money short dated options. Because you will be found out if you do that.
Not that anyone did insider trade, obviously:
It comes after Trump wrote “THIS IS A GREAT TIME TO BUY” on his Truth Social website just hours before his tariff climbdown led to the S&P 500 posting its biggest jump since 2008.
That’s public information. Anyone trading upon that could be a risk lover, a gambler, a loon, but not an insider.
After 15 years of post financial crisis status quo, the pandemic forced them out of their slumber and into action. The Bank of England was widely praised for its decisiveness in slashing borrowing costs as Covid crushed household spending.
But Threadneedle Street was just as deservedly lambasted for its pedestrian response to the inflationary shock that followed the end of lockdown and Russia’s invasion of Ukraine.
The meltdown on global markets is a chance for the Bank and its overseas counterparts to redeem themselves by stepping in to constrain investor panic.
An extraordinary $9.5 trillion (£7.4 trillion) has now been wiped off stocks in the three days of trading since Donald Trump declared economic war on the rest of the world.
FTSE on the morning of publication of this stirring call to arms:
No one does believe that an Associate Editor of the Daily Telegraph moves markets in that way.
One of the grand financial blunders:
It marks the latest twist in the career of Mr George, who is best known for cashing in on “golden ticket” life insurance contracts sold by Aviva France.
Under the terms of these ill-conceived contracts, which he first received from his father aged seven, customers could trade funds based on last week’s prices.
Not only did this allow contract-holders to back-pedal on significant price swings to avoid losses, but it also meant they could switch to rising assets based on historical prices.
Either way, profits were guaranteed as long as they acted within a week.
Can’t recall quite why they were set up this way. Think it was pre-internet age, published prices, writing letters to shift funds. That sort of thing.
But th effect was that you had a life insurance contract which was really a savings vehicle. OK. You could shift funds around between investments within the contract OK. So, there had to be some method of publishing the prices at which you could trade by letter (I think that last is right). So, Aviva allowed you to trade this week based upon last week’s published prices. Coah and horses was driven through this idea.
A French entrepreneur who built his fortune from lucrative life insurance contracts has launched a new fund to invest billions of pounds in Britain.
Max-Hervé George, 35, is preparing to buy swathes of data centres across the UK, buoyed by the Government’s push to rip up planning rules and turbo-charge artificial intelligence.
And, well, yes. He might be a remarkable entrepreneur. But so far – at least as far as I know – the evidence of his ability is that he can trade this week on last week’sprices. Which isn’t a wholly informative track record…..
An analyst has been accused of using working-from-home rules to make nearly £1 million from insider trading.
Redinel Korfuzi, 37, a former Janus Henderson research analyst, denies money laundering and conspiracy to commit insider dealing.
OK, naughty boy etc etc.
They are said to have netted £963,000 in relation to 11 companies’ shares including Daimler, Jet2 and THG and Russian tech firm Mail.ru, now known as VK. Mr Korfuzi is accused of misusing confidential information on these companies.
Jamie Ross, who worked with Mr Korfuzi at Janus Henderson on European equities, …………The fund manager was then taken through a list of the potential transactions through which Korfuzi is said to have profited through confidential information.
Asked about a transaction involving Mail.ru, a personal email service, between September 22 and October 2, 2020, Mr Ross said he had “initial interest” in the transaction but “would have quickly lost that interest when I found out the aim of the company”.
Mr Forster asked: “In terms of Mr Korfuzi’s interest, would you have expected him to show much interest in this, in your view of it?”
Mr Ross replied: “It would have been very clear to him this was not something I would have sanctioned, and was an investment I would not have been interested in.”
The prosecutor then asked Mr Ross about a transaction involving Jet2, between February 4 and February 12, 2021. Mr Ross replied that Janus Henderson did not have a position on the package holiday company, adding that the proposed transaction would not have interested him at all.
Yes, of course this is all going to be more complicated etc. But so far the coworker/manager seems to be saying that whatever he did with those two companies wasn’t insider – or at lesat, not abuse of the Janus position because they didn’t have an interest.
So, you all do take my investment advice, yes?
A 110% rise on a 20 day old stock tip. Woot!
Be even better if I’d got the reason right of course. This isa takeover bid, not as I suggested a rise in the price of steel scrap in the US due to tariffs…..
He doesn’t really think anybody gets it except him. “Nobody on the whole fucking left understands what’s happening on the financial markets except me,” he says. “I’m on all these left-wing WhatsApp groups, I’ve had spads messaging me, saying: ‘What can we say?’ Because I’m the only guy that knows. And I’ve been screaming, for months: ‘Watch the bond yields, watch the bond yields, watch the bond yields.’”
Gazza did something I never did, which is get onto a trading desk. His time there wasn’t quite the victory and global conquering he says it was but then, you know, traders.
But on this macroeconomics stuff he’s not so hot. He keeps – keeps – telling us about the damage being done by rising inequality. Yet inequality isn’t rising. The Wealth Gini is pretty much unchanged over 15 years, the income Gini actually loower than in 2008. So, you know.
But that claim that this is the best the left can do? Well, erm…..
“Traders individually are smart people, but the market itself is a little bit of a wild beast. But the thing is, the traders are probably right. If you look at the UK government, it’s not on a sustainable financial path. There’s been no sustained growth in this country for a long time. The government’s stripped to its bones. The middle class is dying. Where’s the growth going to come from? What is the actual plan here?”
On the other hand that is indeed true. Well, govt’s not stripped to its bones and the middle class isn’t dying but where is the growth to come from, yes?
He was already embroiled in a battle with his employers, who didn’t want to pay his astronomical bonuses unless he stayed. This is apparently very common in the City, and maybe doesn’t come up in conversation much because people making huge bonuses never want to leave.
Snigger. It’s the fucking law. You know all that shouting about huge bonuses? About how they must be controlled? All that? One of the controls is that they pay out over time – and you only get them if you stay. In order that you don;t do short term trades which boost your bonus, cash out and then the bank crashes. This isn’t capitalists screwing the workers, this is the law put in place by lefties.
Sigh.
An economically strong Britain, outside the great blocs of the US, the EU and China/Russia, might have had a chance of straddling the differences. In reality, as last week dramatised, it is one of the weakest links. No EU member’s euro-denominated government debt faced the same aggressive sell-off as Britain’s; nowhere were yields driven so high. Brexiters have damned our country.
Nominal yields in a different currency simply are not comparable.
French media giant’s shares slump after London float in embarrassment for Reeves
Canal+ falls £4bn short of its expected £6.7bn valuation as 2024’s biggest listing starts trading
I wouldn’t suggest that I’m wholly a fan of Rachel from Accounts. But blaming the Chancellor for a disappointing float in the stock market really is stretching blame a little too far.
Together, SMART and the TGR Group operate in about 30 countries across the globe. The Russian state uses the networks to fund espionage operations, while they also help sanctioned individuals get cash into other countries.
….
The networks operated by collecting funds in one jurisdiction and realising their value without using the global banking system. This often involves swapping cryptocurrency for cash.
Akin to hawala then. When are they going after that system?
How to start trading forex as a beginner
Telegraph Money explains the lucrative investment technique akin to gambling
For the individual this is not an investment technique. It is gambling and at bad, bad odds. Not becuase the odds are fixed but because the gambling is being done against the rest of the FX market. Which is staffed by some of the finest gambling brains in the universe.
It’s playing poker against all past winners of the world poker championship at the same time. Not a game the individual investor is likely to win.
Will get a number of clicks to the webpage, obviously. High search ranking and all that. But…..
Coinbase Global’s chief legal officer has called for Donald Trump to sack the head of the US Securities and Exchange Commission as Republicans start drawing up a new policy agenda for cryptocurrencies.
Paul Grewal, the legal chief at Coinbase, the largest cryptocurrency exchange in the United States, said: “The current chair of the SEC, Gary Gensler, has led a regulation-by-enforcement campaign against the industry that has been destructive of investor protections and destructive of innovation in ways that we think need to be addressed immediately.”
His specific actions about crypto I’ve no beef with. But firing Gary Gensler is always a good idea. His basic worldview is simply wrong. It’s one where the bureaucratic state simply just must have ever more control. Always. Fire him for that – and never hire him, obviously.
A High Court judge has ruled for the first time that London Capital & Finance, the collapsed mini-bond investment firm that raised £237 million from 11,600 members of the public, was a fraud and a Ponzi scheme.
OK.
And thanks to a commission rate Careless himself declared “huge” and his accountant “insane”, Surge was getting 25 per cent of all the money the public invested.
A 25% commission rate on a financial product cannot, not really, be anything other than a Ponzi.
Not that this is what the efficient markets hypothesis means but financial markets aren’t inefficient enough for there to be that sort of legitimate profit margin in just raising money.