It's hard to say something's draconian when there's very little other options available. As I suggested recently Cyprus has pre-emptively imposed capital restricts ahead of re-opening its' banks:
- Depositors will be able to withdraw no more than €300 in cash each day
- Transfers over €5,000 would require permission of the central bank
- Overseas credit card transactions would be limited to €5,000 per month (but would be unrestricted in Cyprus
- There is to be a ban on people taking more than €3,000 of bank notes out of the country per trip
- Cyprus will not allow any cheques to be cashed
- Cypriot importers will be allowed to pay for goods only after showing supporting documents
- Cypriot students studying abroad will be able to receive only up to €10,000 a term, and only if the money is transferred by their immediate family
In doing the above Cyprus has become the first eurozone country ever to apply capital controls. The banks open on Thursday local time. Good luck Cyprus.
The stats office in the UK confirmed that current account deficit rose to £57.7bn in 2012 (3.7% of GDP).That is the biggest percentage of GDP sine 1989. There were some upward revisions to the GDP, but of concern is the fall in the household savings ratio to 6.7% in the fourth quarter of last year from 7.9% over the previous three months. I guess at least if the BoE ever introduces a depositors bail-in they'd have less cash to grab.
In Australia we are in an awful period in or election cycle with a government with very few options but to go further into debt promising anything in order to remain in power.
|From the Daily Telegraph (Sydney)|
At least someone is trying to lead the way down here, even if it's a very minor thing for the general population. The LIBOR manipulation scandals that we saw in London, Tokyo, etc have had a positive result in my homeland. Australia will use prices displayed electronically by brokers and trading venues to set the price of the country’s benchmark interbank borrowing rate. That means they'll be no panel system that allows for manipulation. That's a good thing.
Readers of this blog know that I believe that M&A is starting to become one of the crucial "planks" of current equity markets. Stats though are starting to show that I may have got this wrong and I'm happy to admit to it. There have been four megadeals in the first two months of the year but according to Dealogic that plus some IPO activity has failed to get things going sufficiently to agree with my earlier thoughts.
It seems that the continued eurozone problems helped suppress the value of global M&A in the quarter to $374.1bn. That's down 10% from the 2000 number, so we're in no M&A bull market. I would say though that there's enough activity even if it moderates slightly for the investment banks to scale down further headcount reductions. The value of global M&A reached $492.7bn by the end of February, up 24 per cent on the first two months of 2012. The same thing happened in 2011, but things slowed . . . we shall see.
Coffe is not a subject this blog tends to deal with regularly. I went for an early-ish ride this morning and was left pondering a few things as I waited for a cappuccino along my favoured cafe strip in Sydney. Firstly why did one place have a line 10 people long, while my favoured place only had two people waiting? I've had coffee from both and they're OK, but are people choosy or is it about the store front. Sydney siders think they know good coffee but the only difference between the shops was one has an Italian theme (run by Asian people), while the other has a Thai theme (naturally run by Thai ladies). Could it be that people just associate good coffee with Italy without really tasting what they're getting?
Like most people I have an Italian espresso machine at home. It's a proper machine, i.e. it doesn't use the Nespresso capsules which everyone seemed to have in Switzerland. Geneva was a terrible city for coffee. It's better in Zurich, but compared to the first espresso of the day in Courmayeur as you prepared yourself to do the backside ski run through the trees it pretty much sucked. I want you to know that I have never been able to make an Italian cafe style coffee from my home machine and probably should dump it, but something keeps challenging me to try again. Recently I realised that I had been breaking a few rules in coffee making:
- Don't scorch the grounds. If your machine gets too hot the coffee will be bitter
- Use full fat milk and don't kid youself that skim or soy produce a decent drink
- Don't overheat the milk as it will flatten the creme and be unsatisfactory
- 4. Clean and descale your machine regularly
Why did I get on to this? Well lateral thinking award for the day goes to Cannondale Pro Cycling. Wega Coffee Machines has announced announced a new partnership deal with Team. Here's a picture from the Italian Cycling Journal of wonder boy Peter Sagan at work with a Wega machine on the team bus:
“The collaboration we've started with Cannondale is a strategic opportunity in terms of brand recognition," comments Paolo Nadalet, CEO for Wega Coffee Machines. “The agreement will allow Wega to increase their exposure in strategic markets, thanks to the international dimension of the team which, like us, operates on all five continents. This opportunity is doubly interesting in light of the company's hospitality activities during the Giro d’Italia which will allow company guests to experience a unique perspective at this important world class event.”
I love this press statement. What it should say is: We think Peter Sagan is cool and want to hang out with the guys at the Giro so we gave them a machine each and now we all have lime green lycra to cycle in. I may just have to take the bait and get rid of my old machine . . . of course I'll need a lime green "team edition" version because . . . well, just because.