Talking 'bout my generation

 July 8-12, 2013

AMERICAS

Markets: The Dow and S&P 500 hit record highs Thursday, after Bernanke announced the US needs "highly accommodative monetary policy" (aka low interest rates) for the "foreseeable future". Markets rose Friday as well, and the S&P managed almost a 3% gain week on week. 

Companies: Boeing shares fell when a fire started on board, forcing a slow down at London Heathrow airport. Another airline also announced technical difficulties on the dreamliner, forcing the plane to turn back. Neither incident seems related to the battery issue from earlier this year, resolved in April. 

American banks did well last week, with JP Morgan Chase and Wells Fargo beating analyst expectations for Q2. US banks will soon be facing more strenuous capital requirements, an attempt by US regulators to make the system more robust.  Institutions will be required to increase their leverage ratios to 5% of their total assets, which is above the 3% agreed to by international regulators in the Basel 3 accord.

Apple was found guilty of conspiring with five other book publishers to push the price of e-books higher, breaking Amazon's market control.  

Otherwise: The administration of LIBOR has been given to the NYSE Euronext, after the rate manipulation scandal last year. The company paid $1.50 for the honour.  

Also, the global asset-management industry grew to a record $62.4 trillion last year, according to the Boston Consulting Group, passing the previous high set in 2007, before the financial crisis. 

One for good luck: 

People try to put us d-down / Just because we get around
Things they do look awful c-c-cold / I hope I die before I get old

Earlier this month Credit Suisse published an analysis on world population trends. The US and Canada have young populations. In the US, the elderly proportion in 2050 will only be slightly higher than Japan's proportion now. This is of course a problem when it comes to pensions. If Equity markets are not giving the returns calculated by the pension fund, then those seeking to retire in 2050 will potentially be unable to retire. The alternative, is that funds are taking on riskier assets to make the expected level or returns.

EMEA

GSK, a British pharmaceutical company, has been accused by China's ministry of public security for bribing three doctors to prescribe their medicines.  Uh oh.

The British government laid out plans to privatise Royal Mail. It is valued at c. $4.5 bn, and will be the largest privatisation of the last two decades.

*Talking 'bout my generation by The Who chosen to emphasise the world population trends report (and general interest in the future).