What’s the difference between a bond and a bond trader?

(Answer: “The bond eventually matures.”) This old joke came to mind when I read in the FT that Deutsche Bank doesn't want traders to use bad or indiscrete language. Colin Fen, co-head of investment banking wrote to employees that "some of you are falling way short of our established standards [sic]." . . . "Let's be clear; our reputation is everything. Being boastful, indiscrete and vulgar is not o.k. It will have serious consequences for your career. And I have lost patience on this issue."

Is the US more anticompetitive than France?

France economy minister Arnaud Montebourg, prompted by opposition to the acquisition of Alstom’s power business by GE, has issued a decree requiring state approval for most foreign acquisitions. (One can expect that approval will not be given in this case.) In response to criticism that such a restriction is anticompetitive, Montebourg pointed out that his decree is no broader than the rights of the Committee on Foreign Investment in the US. (This inter-agency committee was established in 1988 to prevent Japanese acquisitions of US companies if “there is credible evidence that leads the President to believe that the foreign interest exercising control might take action that threatens to impair the national security.” It frequently blocks transactions.)

Where will the extra crude come from in the second half of the year?

The International Energy Agency (IEA) expects the world will need another 900,000 bpd in the second half, on top of the 400,000 bpd OPEC increase in April, but the IEA doesn't know where it will come from given production problems in Nigeria, Angola, Libya, South Sudan, Columbia and Kazakhstan.  Global crude inventories are below normal. (FT, Friday, p15)

Should we fear the 2nd of June?

President Putin has written a letter to each of the 19 European countries to whom Russia sells gas telling them he will cut off gas to Ukraine on June 2nd unless Ukraine begins prepaying.  Ukraine is currently paying nothing for gas and owes Gazprom $3.5 bn.  In the letter Russia says that it is willing to negotiate terms but has received no proposal from Ukraine.  For Russia to supply Europe while cutting off Ukraine, Ukraine would have to allow transit of the gas.    (FT, Friday, p4)

Should we be raising forecasts for Japan GDP growth in fiscal 2014 (ending March 31, 2015)?

The government’s forecast is 1.4%.   Some private economists have be predicting less than 1%. But the quarter just ended (the last of FY 2013) on March 31 was 5.9% versus a consensus of 4%, as consumer spending anticipated a 3% rise in sales tax.   Reports say post-tax-increase sales have not dropped off as much as expected, however, and capital spending was up 4.9% in the quarter.

Will the US ever get back to the 1.2-1.5 million housing starts a year we used to consider normal?

Housing starts were up 13% in April to 1.07 million, but still below last November’s 1.11 million annual rate.

Were they doing a “great job” or just a “good job?”

At a conference in London on Wednesday, Bank of America’s CFO Bruce Thompson was asked to comment on the accounting error that wrongly inflated the bank's capital ratios but he demurred, saying that the bank would "get back to doing a great job" on the stress test process and share buybacks, which were derailed by the error.   The stock has dropped from $18 to $14 due to the schoolboy error, resulting in the loss of $40 billion in market capitalization.