Good Morning
The headlines:
  1. We begin, as usual, with the Greek News: Greece has approved cuts in pensions and healthcare. There has, of course, been rioting. But no one likes their pensions cut. Link: Greek Parliament approves pension cuts. At the same time, the Greek PM, Lucas Papademos, has rejected calls from Luxembourg for the appointment of a EU Special Commissioner to oversee the recovery of the Greek Economy. Which makes sense – it seems extremely unlikely to me that one commissioner is going to make much of a difference. Unless, obviously, that commissioner is Meryl Streep acting as the Iron Lady. Because then, well, obviously: a happy ending for Greece in 10 years time, and an unwelcome resignation for her Ironness. And an Oscar. Link: Papademos rejects call for special EU official.
  2. Ben Bernanke chatted to Congress yesterday, and affirmed that US interest rates are to remain low, whilst saying absolutely nothing about more rounds of quantitative easing. However, he did say that inflation remained subdued, so the Fed would be continuing its accommodative monetary policy (which is a euphemism for “trying to keep the money supply flowing by encouraging borrowing”). This is expected to go on until at least 2014. Link: Bernanke affirms low rate pledge. He also said that the Volker Rule won’t be ready by the July 21 deadline. The Volker rule, which is part of the Dodd-Frank Act, is meant to stop the banks from investing with their own money – rather than their customers’ money – in order to make a profit; whilst still permitting short-term trading when the banks act as market-makers. Link: Bernanke says Volker Rule won’t be ready.
  3. The price of Gold Futures fell dramatically yesterday after the announcement. Speculators were expecting Bernanke to announce further rounds of quantitative easing, so many bought gold futures hoping that the future price of gold would rise as a result of people buying more gold as a store of value. One speculator described Bernanke’s silence as almost deliberate – as it takes the wind right out of the sails of gold speculators. Ben – high fives if that’s the case. Link: Gold falls.
  4. China’s Manufacturing has improved for the third month in a row. People tend to watch manufacturing indices as they’re meant to be good indicators of economic growth and/or decline. So it seems that the Chinese economy is recovering. On the other hand, improved manufacturing could just be a sign of Chinese factories taking advantage of the looser monetary policies of the Chinese Central Bank, and building up inventories. Which would make this a bit of a false hope. We shall see. Link: Chinese Manufacturing Gain.
  5. The Wall Street folk are suffering after having their bonuses cut. PLEASE – everyone do themselves a favour and read this article: Wall Street Bonus Withdrawal means swapping Aspen for coupons. It’s surreal. But I totally get it – everyone spends to their expected income. You rely on that awesome bonus, so you buy giant houses and commit to renovations and send your three kids to private schools that cost more than Harvard. And your dogs cost you $17,000 a year, because they need dog-walkers and good food and regular trips to the dog parlour. That’s your lifestyle: you spend what you earn. Then you earn less. Sadly – you’re still committed to the renovations and the car repayments and the private school fees. F%#k. Let me just say that poverty is hard – but no one sinks into crisis as quickly an over-committed rich man. Life is eminently fair. 
  6. And the Africa Business News in brief. Link: ABN Briefs. The highlights:
    • The Zimbabwean minister responsible for indigenisation has lashed out at Impala Platinum, announcing that he is “sick and tired” of the group’s failure to comply with indigenisation laws. Oh dear. Not boding well for them sorting something by the week after next?
    • Uganda’s growth is forecasted at 6.2% for the year, thanks to oil and hydroelectric production projects. Ugandan inflation has also dropped to 25.4%. Such a far cry from First World inflation. 
That’s all for now.
Have a great Thursday.