2013: The Year In Review


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The 2013 is almost gone, and it will hopefully stay in our memories as bright and eventful, as it has been, sometimes contradictory and unpredictable, and always educating. Let us take our time, and one of these last December days look back at this elapsing year the way it was seen by the financial markets professionals around the world. Following the tradition, we have made our new annual album - the 2013 in cartoons. In fact, the cartoons were sourced from our daily market commentary publications, where they aim at adding some irony to the pretty serious stuff

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2013: The Year In Review

  1. 1. 2013: The Year In Review by Schildershoven Finance
  2. 2. 2013: The Year In Review JANUARY   1-10 21 FESTIVE ACTIVITIES BAD HABITS Republicans propose a short-term, 3 months increase of the U.S. debt ceiling. By 14 22 PLATINUM DREAM The U.S. Treasury Department and the Federal Reserve oppose the idea of minting platinum coins as a way to avoid the U.S. debt crunch. THE JAPANESE RECIPE The Bank of Japan sets a 2% inflation target and announced its asset purchase program, which will start in 2014. 15 23 Schildershoven Finance THE NEW MARK Barack Obama has urged Congress to raise the debt ceiling without any debates. WELCOME TO FINANCIAL MARKETS! The Europeans propose FFT, a tax on transactions with stocks, bonds and derivatives. The initiative is backed by Germany, France, Italy and 8 other countries.
  3. 3. 2013: The Year In Review FEBRUARY   By JUST GIVE ME A REASON The market has found the reason for correction 9 NO MERCY. NO REGRET. Japan's new prime minister continues to maintain his economic recovery policy. PROS AND CONS OF THE STRONG EURO ECB is likely to keep current monetary policy unchanged 21 NEXT PATIENT! Eurozone Finance Ministers will start their concilium today. It is expected that Cyprus will be in the center of discussions. 11 TIME FOR MEDITATION Japan's GDP fell in Q4 2012 by 0.1% compared to Q3 or 0.4% in annual terms. 14 WINDING UP? According to the Fed January minutes, a number of the Committee members called to slow down the pace of the asset purchases 21 Schildershoven Finance TRUCE IN THE CURRENCY WARS Following the G-20 meeting in Moscow, the participating countries declared their intention to refrain from competitive currencies devaluation 18 THE HEAVENS TREMBLE Moody’s downgrades the UK rating to Aa1 THE “ANTI-CRISIS” PARLIAMENT Parliamentary elections in Italy start on the weekend 22 25
  4. 4. 2013: The Year In Review MARCH   “ALMOST THERE” The US Senate has rejected both the Democrats and the Republicans proposals to replace the spending reduction 1 SECOND TIER The president of Cyprus asks Athens to share EUR 2 bln part of the Greek bank recapitalization package. 12 PLAN “B” The Cypriots, after the failure of the negotiations with Russia, present their "Plan B" 21 By “READY FOR AUDIT” The Cyprus government has approved an independent audit of its banking system 5 CYPRUS “ANTI-CRISIS” PLAN Eurozone agreed on USD 10 bln help for Cyprus after the introduction of a one-off levy on the bank deposits 18 END OF THE CHAVEZ ERA Venezuela's President Hugo Chavez dies at the age of 58, after 14 years in power 6 A DIFFICULT DECISION The parliament of Cyprus voted against the levy on deposits 20 THE ISLAND OF LOCKED MONEY Cyprus authorities impose capital restrictions WHO’S NEXT? Dijsselbloem said that Cyprus bail out must become a template for other Eurozone banking sector bailouts. 26 Schildershoven Finance 28
  5. 5. 2013: The Year In Review APRIL   By 2 3 UNCLEAR THREAT North Korea is probably preparing for new a nuclear test. 8 16 5 SLOVENIA MAY BE NEEDING THE ASSISTANCE OECD called the Slovenian authorities to take some steps to solve the country's banking system problems 10 ON SALE Brent oil prices fell below USD 100 per barrel level “SINK OR SWIM” ECB and BoE left interest rates and stimulus programs unchanged WHO IS TO BLAME? Those responsible for the crisis in Cyprus are “wanted” in the country. VICTIM OF THE CIRCUMSTANCES Italian President Napolitano may resign to give his successor more freedom in government formation negotiations RUMORS Rumors on the possible Germany downgrade are circulating on the market. 18 Schildershoven Finance THE MINOR REVISION IMF will revise its US GDP growth forecast in 2013 to 1.7% from 2%. 12 TASTY! BoJ Governor Kuroda affirms his plan to stimulate Japanese economy and gains support by the G-20 finance ministers. 22
  6. 6. 2013: The Year In Review MAY   RALLY GOES ON The DJIA has hits through 15 000 mark first time ever 8 By TIME TO HEAL OLD PAINS US politicians have to re-start negotiations on US debt ceiling. 13 16 WHAT'S NEXT, BEN? Fed Chairman Mr. Bernanke will deliver his economic outlook to the U.S. Congress. 22 17 WHAT DID YOU MEAN, BEN? Decision to scale back the USD85 billion bonds buying program could come at one of the "next few meetings" 23 B2B (BACK TO THE ‘Bs’) Fitch upgrades Greeceby two notches from CCC to B15 BLACK HAWK UP Fed President John Williams said Fed could begin to reduce QE this summer NONSTOP RALLY S&P 500 hits the new highs as the markets expect ongoing monetary stimulus Schildershoven Finance “FINAL” WARNING Moody’s Investors Service warned the U.S. rating may be cut in 2013 if the federal budget deal isn’t made. 21 NICE TO FIND THAT MISSED COIN US 1Q 2013 GDP was revised from preliminary assessment of 2.5% to 2.4% 31
  7. 7. JUNE   2013: The Year In Review A  DANGEROUS  GAME  Schildershoven Finance   By SO MANY MEN, SO MANY MINDS! Fed members continue to announce their positions on the current and the future Fed policy 4 6 THERAPY MAKES ITS EFFECT Standard & Poor’s has changed its outlook on US sovereign rating to stable from negative. 11 10 «WAR GAMES» Russia disagrees with the other G-8 members on the ways to stabilize the situation in Syria. TV OFF The 24-hour strike began in Greece after the government shuts down Hellenic Broadcasting Corporation 13 THE GLOBAL SELL OFF NOTHING’S WRONG! Stock indexes slumped worldwide following the Fed announcement Fed members announced their view on the market reaction to the to start tapering the QE program this year. previously made Fed statement 21 EMPLOYEES REQUIRED! US Nonfarm payrolls increased in May to 175 000 THE DANGEROUS GAME 24 18 THE TENSION EASES Fed members keep trying to calm down the markets. 28
  8. 8. 2013: The Year In Review JULY   By FITCH BLESS AMERICA Fitch Agency affirmed the U.S. credit rating at 'AAA,' 1 9 HIT THE BRAKES Richmond Fed Manufacturing index unexpectedly fall to minus 11 in July ENOUGH! BACK TO WORK! Egyptian army commanders propose to US Employment Situation data published on suspend the constitution and elect a Friday was better than expected. new president if the president refuses to accept the army ultimatum 3 2 LONG LIVE GREECE Eurogroup affirmed EUR 3bln aid package to Greece in return for further reforms. 24 THE “DELAYED-ACTION” SPY Former CIA officer Edward Snowden filed a request for political asylum in Russia. BEN THE ‘SAVIOR’ THE CBR FIRST LADY’S FIRST NIGHT This is the first time the CB of Russia Board Bernanke in his testimony to the meeting will be chaired by Elvira Nabiullina. Congress said the QE exit strategy was not preset and would depend on economic data. 15 18 LENDING SLEEPS According to ECB report, lending to businesses and households in the euro area fell 1.6% 26 Schildershoven Finance 8 MARKET PROTESTS Russian stock indexes plunged after the Moscow mayor candidate Navalny was sentenced to 5 years in prison 19 SHALL WE? The two-days Fed meeting is starting today 30
  9. 9. 2013: The Year In Review AUGUST   By SHALL WE?. PART II Today ECB and Mario Draghi will be the main newsmakers. 1 NEW DAY, NEW COURSE This week Fed representatives will give comments on monetary policy. THE NEW FAVORITE 2 6 LET’S DO IT! BACK FROM THE RECESSION FRB of Atlanta president Lockhart assumes, France’s Finance Minister says that the country’s that the decision to start reduction of QE program economy went out of recession in 2Q2013. may be taken at any of the next few meetings. 13 THE BOOK OF RIDDLES Investors are awaiting the publication of last Fed meeting minutes 20 GUILTY! The U.S. President Barack Obama may launch his military operation in Syria 26 8 THE SUPERHERO German GDP increased by 0.7% in 2Q2013 15 14 Schildershoven Finance FLIGHT TO QUALITY Escalation of the Syrian conflict forces the markets to race to defensive investments 28 TRADE BOOSTS China’s exports expanded by 5.1%, imports gained 10.9% in July. “ABENOMICS ” IN ACTION Japan’s export increased in July 12.2% YoY. 19 OH NO, NOT AGAIN! US and UK senators wonder of the findings of the UN Commission before the military action in Syria will begin.
  10. 10. 2013: The Year In Review SEPTEMBER   “INTELLIGENCE DOSSIER” The French government published the "intelligence dossier” in proof of the Syria government forces chemical attack 3 By THE G-20 RUSSIAN VENUE The G-20 meeting begins today in St. Petersburg with expected topics being the world economy and the situation in Syria. 5 Schildershoven Finance «THE DEATH LOOP» UST'10 yield returned up to the levels of 3.0% p.a. THE COMPROMISE Armed strikes against Syria could be postponed if its government puts its chemical weapons under international control. 6 10 50 MEGABUCKS Verizon places the largest corporate bond ever - USD 49 billion. 12 SURPRISE! Fed members decided to postpone the QE tapering SAY “NO” TO CHEMICAL ARMS Assad signed Syria’s accession in the Chemical Weapon Convention 13 NO TIME TO REST The Christian-Democratic parties’ CDU / CSU unit led by Angela Merkel won the parliamentary elections in Germany THE COFFEE BREAK HITTING THE BRAKES Market activity is sluggish ahead of the Fed's Lawrence Summers withdrew his candidacy to become the Federal Reserve decision on the current monetary policy. Chairman. 16 YOU CAN’T STOP THE BEAT William C. Dudley said in New York that “the economy still needs the support of a very accommodative monetary policy”. 18 RUN FORREST! RUN! U.S. may start the 2014 fiscal year with no budget approved. 19 23 24 30
  11. 11. 2013: The Year In Review OCTOBER   By THE EMBARRASSING FAILURE Members of U.S. Congress haven’t been able to overcome their frictions and agree even on the interim 2014 budget. 1 YOU MUST BE KIDDING! … NO? China expresses concern over the safety of their investments in the U.S. assets 8 LET THE BATTLE BEGIN Mr Obama and the House Republican leaders discuss the proposal for a temporary increase in the debt ceiling 11 THE NEW TEAM LEADER As expected, Mr. Obama puts Mrs Janet Yellen in charge of the Fed. 10 THE SCHOLARS BET Economists are expecting that the U.S. economy added 180,000 workers in September 22 NEW MEETING. NEW EXPECTATIONS A two-day Federal Open Market Committee meeting starts tomorrow. 28 Schildershoven Finance "BIG BROTHER" IS WATCHING YOU The German government digests the news that the Merkel’s private phone may have been monitored by the U.S. intelligence. 24 LET’S WAIT… The Federal Reserve decided to stick to its USD 85 billion monthly bond purchases. 31
  12. 12. 2013: The Year In Review NOVEMBER   By NOW IT’S GONNA BE FASTER ECB lowered its key interest rate by a quarter of a point to 0.25% after the drop in inflation threatened its mission to keep prices stable. A NEW VESSEL The Treasury is set to sell USD 10-15 billion of its first floating-rate notes Jan. 29. The debt will have a 2-year maturity and it will be the Treasury’s pilot issue of this type of securities in 17 years. 8 7 WE SHALL GO THIS WAY Fed representatives are scheduled to speak today: William C. Dudley in New York, Eric Rosengren in Abu Dhabi, Charles Plosser and Narayan Kocherlakota in Philadelphia 18 LEND US THAT HELPFUL HAND The nominee for the next Chairman of the Federal Reserve, Mrs Janet Yellen, said the economy and labor market were performing “far short of their potential” and must improve before the Fed can begin reducing monetary stimulus. 14 THE FALL OF THE ROMAN TITAN Former Italian Prime Minister Silvio Berlusconi was expelled from parliament. THE NOVEMBER LULL   26 Schildershoven Finance 28
  13. 13. 2013: The Year In Review DECEMBER   GETTING BETTER AND BETTER U.S. ISM Manufacturing Index rose to 57.3 in November, the highest since April 2011. By 10 6 MAYBE… ANYTHING ELSE? Fed begins two-day meeting today NEXT CUSTOMER, PLEASE! U.S. Retail Sales rose 0.7% in October, signaling 4th quarter GDP growth might not be as weak as expected. 13 17 THE KEY POINT. Fed will cut bond buying program by USD 10bn to USD 75 bln in January 2014, 19 UP, TO THE SKY! US GDP rose 3.6% in the 3rd quarter PLACE YOUR BETS According to ADP Employment Survey the US private sector in November gained 215,000 jobs 5 NO MORE FEARS Investors believethat any tapering-related pullback will be only a temporary sell off Schildershoven Finance SETTING THE TREND? U.S. GDP rose at its fastest pace in two years by 4.1% annualized for the 3rd quarter 23