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March 30, 2015

The state of the financial labour market

Filed under: Forex Strategies — Tags: , , , — admin @ 4:43 pm

As many risk takers are likely to be concerned with locking down positions and profits into month and quarter end, Macro Man thought he would address an issue that’s near and dear to his heart, the state of the labour market for market professionals.

He spent a few minutes sifting through efinancialcareers, an online job portal that pretty much does what it says on the tin.  First, he looked at openings for portfolio managers:

As you can see, the query generated 290 results, globally.   OK, what about looking for traders?

Hmmm…507 results, but as you can see, a lot of the results are for quant traders because hey, HFT front-running is perfectly legal and what could ever go wrong?  If you sometimes feel like trading these days is like living in The Matrix, you just might be on to something.   A search for C++ yields a whopping 1434 results.

If you apply for one of these roles and are contacted by an “Agent Smith”, watch out!  On a slightly more serious note, perhaps the best piece of advice that Macro Man can give young readers interested in a financial career can be summed up in 3 words.  Learn.  To.  Code.

Even more than coding, however, there is one area of finance that is in a roaring, runaway bull market with no end in sight.  Some may call it a bubble, but as you know the authorities always feel uncomfortable identifying bubbles in real time.   Indeed, listen to Yellen’s Congressional testimony and you can see certain members cheering lustily for the trend to continue, nay accelerate.

Step forward Compliance officers, for whom there are a stunning 3093 vacancies!

There you have it folks, financial markets in 2015- where demand for compliance folk outnumbers that for portfolio managers by more than 10-to-1.  The irony, of course, is that in their zeal against too-big-to-fail on the banking side, the authorities have significantly raised the AUM bar for what constitutes a viable business proposition on the fund side.  As a result, in some sectors at least assets have concentrated in huge funds with the built-in compliance infrastructure to satisfy the rampant bull market.

One can only hope that come the next market crisis, they do not prove to be too big to fail.

March 13, 2012

State Bank of Vietnam Cut Refinancing Rate 100bps to 14%

Filed under: Forex News — Tags: , , , , , — admin @ 3:09 am
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The State Bank of Vietnam (SBV) cut the refinancing rate 100 basis points to 14.00% from 15.00% previously; also cutting the inter-bank rate to 15.00% and discount rate to 12.00% by the same margin.  The SBV said: “In response to the guidelines of the Government… on key solutions to realize the socio-economic development plan and state budgeting for 2012; on the basis of the downward trend of inflation and the capital supply-demand of the market, the Governor of the State Bank of Vietnam has issued Decision… to reduce key interest rates and maximum VND deposit interest rates for entities and individuals at credit institutions and foreign bank branches”

Last year the State Bank of Vietnam implemented a number of measures to counter inflation including rate hikes, a cap on bank deposit rates, an increase to the required reserve ratios on foreign currency by 100 basis points in June last year and lifted dollar reserve ratios 100 basis points in August.  The bank also increased its reverse repurchase interest rate by 100 basis points to 15.00% in May last year, and subsequently reduced the OMO rate by 100 basis points to 14.00%.  

Vietnam reported annual inflation of 18.1% in December, 22.42% in September, 23.02% in August, 22.16% in July, 20.82% in June, 19.78% in May, and 17.51% in April last year, according to the General Statistics Office.  Vietnam’s annual GDP growth rate averaged about 6 percent through 2011. The Vietnamese Dong (VND) is currently trading around 20,823 against the US dollar.

August 1, 2011

State Bank of Pakistan Cuts Rate 50bps to 13.50%

Filed under: Forex News — Tags: , , , , , , — admin @ 3:17 am

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The State Bank of Pakistan unexpectedly dropped its discount rate 50 basis points to 13.50% from 14.00%.  The Bank said: “The key parameter in this assessment is the outlook of inflation that indicates that average inflation in FY12 is expected to remain in line with the announced target.  No adjustment in the interest rate would have entailed further tightening of monetary policy in real terms, which is not warranted given the decline in private investment.”  The Bank also noted: “Pakistan’s economy is currently facing three broad challenges in the shape of persistence of inflation at a high level, falling private investment and low growth, and rising total debt due to a low tax to GDP ratio.”

Pakistan’s central bank last held its discount rate unchanged at 14.00% during its May meeting.  Pakistan reported annual inflation of 13.92% in June this year, up from 13.23% in May, and 13.04% in April, the Bank had previously commented that “the average CPI inflation for FY11 is likely to remain between 14 and 14.5 percent, which is lower than the central bank’s earlier projections,”.  The Pakistani government announced an inflation target of 12 percent for FY 2012, with a desired path for inflation of 9.5% and 8% in the subsequent 2 years.

March 1, 2011

Medicaid funding busts state budgets

Filed under: Business — Tags: , , , , — admin @ 12:22 am

NEW YORK (CNNMoney) — The Obama administration is giving states more flexibility in implementing the health care reform law, but that won’t help governors plug one of their biggest immediate budget problems: Runaway Medicaid costs.

Several dozen governors are pleading with the president to let them drop enrollees in their costly Medicaid programs. They say this flexibility is critical in closing an estimated $125 billion budget gap for fiscal 2012, which starts July 1 in most states.

Medicaid rolls have ballooned because of the distressed economy. Enrollment has surged to nearly 62 million people, or one in five Americans, according to the government. And it’s projected to expand another 6.1% during the current fiscal year.

Governors have been prevented since 2009 from tightening the rules for who gets Medicaid.

First, the federal stimulus program required that they maintain their eligibility guidelines if they wanted to receive increased federal matching funds for the program. That additional aid is running out this year.

Now, the health care reform law requires that they continue their Medicaid program essentially as is through 2014 for adults and 2019 for children in order to receive any federal funding for it.

“Medicaid’s growth is out of control,” New Jersey Gov. Chris Christie said in his budget address last week. “States desperately need relief from that unfunded federal mandate.”

How to fix a budget crisis? Cut taxes!

States spend more on Medicaid than on any other program other than education. The health care program eats up about 16% of their budgets, according to the Kaiser Family Foundation.

States shelled out a total of $130 billion on Medicaid in fiscal 2009 and received $249 billion from the federal government to cover the remaining costs, according to the Center on Budget and Policy Priorities. On average, the federal government pays 57% of the states’ Medicaid expenses.

And the costs are only expected to escalate as health care expenses continue to rise.

In response, governors are doing what little they can to rein in costs.

In Maine, for instance, recipients would have to contribute more for their care under Gov. Paul LaPage’s budget plan. Illinois providers would see their reimbursement rates fall by 6% if Gov. Pat Quinn’s budget is enacted, saving the state $552 million.

In New Jersey, Christie wants to move aged, blind and disabled enrollees into managed care, and move their pharmacy benefits to managed care, as well. This would save the state $41 million, but overall Medicaid spending is expected to grow by $1 billion over last year.

So far, Arizona is the only state to receive some assistance from the Obama administration. Health Secretary Kathleen Sebelius granted the state’s request to drop roughly 280,000 non-disabled adults from Medicaid coverage at the end of September.

While continuing to press for waivers from the health care reform’s eligibility rules, Republican governors are also floating a proposal to turn Medicaid into a block grant program. This would allow them to receive a lump sum from the federal government and use the money as they see fit.

This move, however, would ultimately reduce federal funding for Medicaid, according to experts from the left-leaning Center on Budget and Policy Priorities.

Obama reaches out to states

The Obama administration, however, isn’t keen on letting states reduce their eligibility or converting Medicaid into a block grant program, senior officials said Monday.

The president’s announcement Monday that states can apply for waivers from certain health care reform requirements starting in 2014, three years earlier than originally scheduled, won’t help states get out of their current hole.

To provide more immediate assistance, the federal health department has been working with states individually to discuss ways to reduce their Medicaid costs.

For instance, states can limit or charge more for optional benefits, such as prescription drugs, dental services and speech therapy. They can try to reduce their drug expenses, which totaled $7 billion in 2009, by using acquisition costs as a benchmark for reimbursement and by relying more on generic medicine and mail order.

And they can drop non-pregnant, non-disabled adults who earn more than 133% of the state’s poverty guidelines if the state is in a fiscal crunch.

“We’ve been working one on one with states across the board so to try to figure out where we can begin to tackle their challenges,” a senior administration official said. To top of page

January 12, 2011

California swipes state employee cell phones

Filed under: Business — Tags: , , , , , — admin @ 12:39 am

NEW YORK (CNNMoney) — Don’t get too attached to those work cell phones, California employees. Half of you are going to lose them in coming months.

In his first executive order, Gov. Jerry Brown is requiring the return of 48,000 government-paid cell phones by June 1. He said he found it difficult to believe that 40% of state employees needed a work phone.

The move will save the cash-strapped state $20 million a year. It comes a day after Brown announced a draconian budget plan that will cut $12 billion in spending and maintain $12 billion in tax hikes.

“In the face of a multi-billion dollar budget deficit, a cell phone may not seem like a big expense,” Brown said. “But spending $20 million, and perhaps far more than that, on cell phones can’t be justified. We’re facing a budget crisis in California and I want to achieve all possible, reasonable savings.”  To top of page

September 9, 2010

Trichet: Policy-makers must permanently be in a state of “credible alertness”–FT

Filed under: Central Banks — Tags: , , , , , , — admin @ 5:29 pm

Trichet has a way with words, don’t he? He also says that there must be “quasi-automaticity” in sanctions in the euro area. Non-standard measures will continue to be progressively phased out, Trichet tells the FT.

The market seems to like the talk of phasing out of non-standard measures, helping push EUR/USD back up to 1.2700.

June 16, 2010

State Sponsored Muggings

Filed under: Forex Strategies — Tags: , , — admin @ 4:44 pm

Team Macro Man are going to be scattered to the four winds for the next few days so the posts may be sketchy. But there are a few things that are troubling us. Apologies to the readers who like graphs and quant analysis because here are some ponderances.

As expressed in “the view from the top” the basic game of pass the parcel of debt has seen the music stop with the sovereigns holding it and sweating like they had a packet of anthrax in their laps. Quite right too. Since then liquidity has been solved as far as we can see, but solvency hasn’t. Of course it was too simple to assume that the West would knuckle straight down and earn enough back from the rest of the world, either by producing more efficiently or devaluing their currency and inflating their way out of their obligations. Before we even get to that stage we have to go through the Robin Hood phase.

The private sector got bailed out out the expense of the State and the State are now looking for a way of getting their money back. The difference between the private sector and the State is that the State can change the rules whenever they want leaving the private sector with little choice other than to comply or run away. The State is never quite as direct as to say, “Give us our money back or you’ll feel the chill of my steel” but the messages coming from many sources are now pretty much as good as.

If you are going to go and mug a rich corporate the first thing to do is to make sure that the voters are on your side. So first the PR machine kicks in –

Banks are evil, right? So they are first on the list. Even if the too obviously named “Robin Hood tax” doesn’t directly fire up, the PR machine appears to be cranking up again for another attack. If you saw the UK’s Channel 4 “Dispatches” program on Tuesday night you couldn’t have lined up a more anti-banking lot to “expose the evils that still lie within”. Alistair (Scapegoater) Darling, Paul(Got to sell equities at the bottom) Myners, a Priest (can’t not trust a priest. hmmmm) and some ex-head hunters kick it all off to the point I was surprised their wasn’t a new set of City riots yesterday. A right old shoeing of the banks is on the cards and they will comply with the demands. The wallets are already about to be handed over. Mugging done, next please.

Large corporates. Well Well Well. BP. Oh dear Christ what a completely sad affair all round. But for Mr State it was like finding a man comatose in a dark alley with a trunk of gold. Obama didn’t even look twice at the likes of Halliburton, or the less well off bystanders. He had the advantage that the guy on the floor was an out-of-towner too (well he was wearing a coat made in a foreign land), with few local friends. The cost of the clean up is going to be huge and diverse but in the really big picture every one of the billions of dollars spent and compensated by BP is money into the whole US economy. Whether it be just paying the guy’s who are doing the cleaning up, or compensating the fishermen whose seafood isn’t being caught and sold, or the tourist operator, via the money that the would-be buyer of that seafood /holiday has spent on substitution elsewhere. It’s money from a large corporate’s savings into the system. BP is a special case but it does hint how the large corporate is under the same cosh and ultimate fate as the banks, given half a chance.

Direct taxation muggings are on the increase too. Wealthy individuals are legging it out of high tax regimes where it is easy to do so, and more importantly the marginals are being deterred from entering them or are returning to their native roots. Without tax normalisation you’d have to be a very devoted Singaporean to want to spend the rest of your days in London. Macro Man’s own departing gift to the survey lady in LHR departures was along the lines of “You’ve driven me away”.

As for regulation – Just have a look at what the Germans are trying to do. If you can’t beat ’em, tie ’em up in so much red tape they won’t be able to breath. Reminds me of the French when told they HAD to allow imports of videotape recorders from Japan in the early 80’s, despite their interests in Thomson. So they bottlenecked the imports by making them all go via one office of only 9 people in Poitiers. Class!

So with the State squeezing the individual, the corporates, the banks, anyone else they can defame and mug and strapping the rest up in red tape, what are the alternatives?

Well the only real alternatives are to:

a) Pay up

b) Attack the mugger and send him packing – Now this is going to be an interesting development in Europe if the populace of, say, Greece decide that they won’t pay and boot out the government. You can bring in as many academics and IMF superheroes as you like but if Georgiou Public doesn’t understand it he may not agree and decide to bring in a government that sticks 2 fingers up at the creditors.

c) Run Away – But where to? Now this is where I unleash the shackles of reality and think big-

You want an unregulated, cheap , empty and undeveloped country you can effectively buy and start again in. Somewhere to build the new Singapore of the European time zone, unsaddled by monstrous debt and irrevocable old laws (Dubai), yours for the moulding. I have had in the back of my mind for many years that a large consortium of the mega-rich, private and corporate, should buy Eritrea from its owners and build a low tax, regulation free Utopia. The Country motto being Caveat Emptor and the only rule being, in Mad Max style, “Bust a deal , face the wheel”. Oh, and “No Spitting” because I’ve always liked that one. It would immediately place responsibility solely on the purchaser to do their due diligence with no crying to rating agencies, government or personal claim lawyers if they cock-up. A secondary insurance market would naturally evolve ( Like CDS’s) to cater for those that didn’t want to bother with their own due diligence and this would be a measure of “implied” risk rather than the “theoretical” risk that rating agencies uselessly peddle. But at least that would pay out, unlike a ratings agency which just shrugs. As for security against the hoards of upset western nations suddenly pissed off at somewhere else attracting all the money? Well, next-door in Somalia are a bunch of easy to rent guys who for the last 20 years have been running rings around all-comers. Job Done..

Madness over. However, there is one country that is quietly shaping up to be a pretty good contender for the role of off-shore Europe….. The new Carthage. Have you seen what Libya are up to these days?

April 15, 2010

More pain coming: State budget gap is $89 billion

Filed under: Business — Tags: , , , , , — admin @ 12:25 am

NEW YORK ( — States will have to find a way to close an $89 billion budget gap before their 2011 fiscal year begins in July, according to a report from the National Conference of State Legislatures released Wednesday.

But there might be one sign of improvement on the horizon: In what the conference calls a “noteworthy turn,” 42 states estimate that revenues will actually grow above current-year levels.

Texas is expected to post the largest increase, at 7%, followed by Hawaii (6%), Minnesota (5.6%) and Vermont (5.4%).

But since the growth will only be modest in most states, budget woes will linger.

And while revenues may be growing, spending demands are continue to rise. “Although the bulk of state fiscal problems can be traced to revenue declines, spending pressures are mounting,” according to the report. “Far and away, Medicaid was the most common program exceeding budgeted levels, with 22 states reporting Medicaid overruns.”

California faces the largest budget gap at $13.8 billion, the report said, with Illinois at $12.5 billion and New Jersey at $11.0 billion following close behind. The remaining states have balanced budgets for the year, and Alaska reported a $355 million surplus.

States are especially agonizing the wind down of federal stimulus funds, which will disappear by fiscal year 2012. State officials from 31 states and Puerto Rico forecast a $73.5 billion budget gap for that year, and 21 states project a $64.7 billion deficit for fiscal year 2013.

By the end of fiscal year 2013, the conference estimates states will have closed a combined $531 billion budget hole since the start of the recession. To top of page

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