THE RENTAL MARKET has come to a halt with the lockdown measures in place across the UK, and now a warning has been issued showing a decline in rental stock. But how has the lockdown triggered an increase in deposits and rental prices?

IT WAS the inevitability that we were merely waiting to have confirmed. Latest data released this morning by mortgage lender Halifax indeed confirms that house prices cooled in April, as one would expect given the economic impacts of the current health crisis.

My colleague Tanya Beckett has conducted a rare and fascinating interview with Viktor Vekselberg, one of the billionaire oligarchs who co-own TNK-BP with BP - and who have fallen out with BP over BP's desire to form a business relationship with Rosneft, Russia's largest energy group, which would involve BP and Rosneft taking stakes in each other.

Because of the tensions that have arisen with AAR, the group that represents the oligarchs, BP in collaboration with Rosneft would dearly love to buy AAR's half share in TNK-BP. But their offer of $27bn for 50% of TNK-BP, which values the whole of TNK-BP at $54bn, was rejected earlier this month.

All may not be lost for BP, however. Mr Vekselberg suggests that a sale is possible. He tells Tanya Beckett:

"Of course it can be happen, for sure. If it will be [an] interesting proposal for us according to our understanding of (the) valuation of this company, of course we can accept. So far we have not received this."

So what would be an "interesting" valuation of TNK-BP? Well those close to the oligarchs say that they value TNK-BP at more than $70bn.

It's not clear BP and Rosneft are prepared to pay as much that. The difficulty for BP is that if it fails to reach an accommodation with Mr Vekselberg and his colleagues on price, then it will be stuck in a difficult place - because BP will have been publicly humiliated by the failure to consummate the Rosneft deal and will somehow have to rebuild relations with AAR in order to continue to extract billions of dollars in dividends from TNK-BP.

BP's partnership with AAR is in tatters, as Mr Vekselberg makes clear, in emotive terms, because of AAR's conviction, upheld in arbitration proceedings, that BP's proposed deal with Rosneft breached its contract with AAR:

"The picture is really simple. TNK-BP was created eight years ago, 2003. It was created like [a] joint venture between Russian shareholders and BP, huge global player... The company grew very active; it's now one of the best companies - not just Russian but internationally, because we have investment outside Russia...
 
And really I personally was surprised, I was surprised why BP decided to do something which [was] not according to our shareholders agreement. I am not surprised why BP would like to do this but I am surprised why they did it without any consulting or even just like, just inform us about that (sic). I was very upset, I am still upset even now".

Mr Vekselberg says he is "not so interested in money". The billionaire
adds: "I have enough money, for my life, for my family, for all that".
But "we are businessmen, we are not ideological or something", so of course a sale to BP and Rosneft "can happen".

So what would occur if BP and Rosneft were to make him several billion dollars richer? "I am already very upset" he says "but I will [be] double upset if I have to decide to sell. It's because I dedicated for this company almost like 15 years".

These remarks by Mr Vekselberg are a sign that the impasse over the purchase by BP and Rosneft of AAR's stake in TNK-BP can be overcome.
It offers hope to BP, perhaps for the first time, that it may be able to buy AAR out of the joint venture by the time of the May 16 extended deadline set by Rosneft.

But here's the question? Is the price that Mr Vekselberg and his fellow billionaires will accept one that BP's owners will see as acceptable?

Some of them are already dubious about the terms of the new partnership it wants to form with Rosneft. At a time when BP remains financially stretched by the costs of the disaster in the Gulf of Mexico, BP's shareholders won't want it to further enrich Mr Vekselberg more than is strictly necessary.

For more on the Vekselberg interview, see Russia Business Report.

One of Europe's most influential bankers said to me the other day that he thought it would be a disaster if any of the eurozone's debt-stretched nations imposed a reduction in the value of their respective sovereign borrowings, or - to use the jargon - took a haircut on their debts.

For him, the eurozone approach of muddling through - providing IMF and eurozone loans to those countries that cannot borrow on markets - is the right approach, even if it hasn't actually solved anything for the eurozone in a permanent sense.

It is curious he should take that view, given that the rescues of Greece and Ireland that took place last year are already having to be renegotiated. And the bailout of those countries didn't stop the rot: Portugal is well into the process of obtaining emergency finance from eurozone and IMF.

Wouldn't it be better to cut what Greece - or Portugal or Ireland - owes down to a manageable size, in tandem with the imposed shrinkage of its public sector, to put its public finances back on a basis that is sustainable for the long term?

The markets are saying that's the only way forward. Over the course of a year, the market price of Greek government debt has fallen by more than half, for example. The yield on 10-year Greek government bonds is well over 15%. Which is an unambiguous statement from investors that there is not the faintest chance that they will lend to Greece again, unless and until its debt burden is reduced to a manageable size.

Or to put it another way, markets are presenting a simple choice to eurozone government heads and the IMF: they can continue to lend to Greece for an indefinite period, in the hope that Greece's economic growth will eventually pick up and generate incremental tax revenues, which would allow the Greek government to perhaps start paying down its debts; or they can bite the bullet and put Greece into the equivalent of what the Americans call Chapter 11 bankruptcy protection, to restructure and reduce what Greece owes so that it is consistent with the market price of all that debt.

Now as of this instant, option one looks a bit naive, in that what's happened subsequent to the first bailout of Greece a year ago is that its ratio of debt to GDP has been growing in leaps and bounds to more than 150% of GDP (and for more on the heroic challenges faced by Greece, see reports in the next day or two from Stephanie Flanders, who is in Athens).

So you would have expected my influential banker - who knows a thing or two about the markets - to be in favour of what the markets are saying is inevitable. Surely he should be calling for that most humiliating event for any creditor, a formal admission by Greece that it can't pay what it owes, which goes by the moniker of a haircut, or restructuring, or default?

But Mr Big Banker doesn't think that's the right way forward. His reasoning is that he fears a debt restructuring would weaken many of Europe's banks, such that they would be forced to raise new capital - perhaps from their respective governments. And, for reasons that slightly elude me, he sees that as a worse outcome than leaving Greece trapped in an unbreakably vicious cycle of economic decline.

The odd thing, however, is that the official statistics really don't seem to indicate that a haircut on Greek debt would be Armageddon for Europe's banks.

It would be a disaster for Greece's banks, that's certainly true, given that (according to Bank of England figures) a 50% writedown of Greek sovereign debt would wipe out more than 70% of their equity capital. Or to put it another way, they would be bust and would have to be recapitalised.

But, sooner or later, Greece's banks are going to need strengthening in any case. Fixing Greece's public finances won't fix Greece unless its banks are mended too. So any estimate of the costs of rehabilitating that country will include the price of providing new capital to the banks.

The more relevant question, perhaps, is what a Greek haircut would mean for banks outside Greece.

The latest figures from the Bank for International Settlements, published a few days ago, show that at the end of last year banks outside Greece had lent $146bn to Greek banks, companies and the public sector - down from $171bn three months earlier. And, of this, loans to the public sector (largely holdings of Greek government bonds) were $54bn.

To be clear, this doesn't take account of exposure through derivatives, credit commitments or guarantees. So the world's banks probably have a further $100bn exposure to Greece.

The sums at risk therefore look serious though not - on their own - potentially disastrous for the health of the financial system.

Now as luck would have it, the banks most at risk happen to be those of the eurozone's two largest and strongest economies, Germany and France. The exposure of German banks to Greece is $34bn, including perhaps $20bn of loans to the Greek government, while the exposure of French banks is $57bn, of which again around $20bn is probably sovereign lending

Now because of what some would say is the madness of how the global Basel rules - that measure the strength of banks - are applied, there would be a double whammy for eurozone banks if there were a write-off of Greek sovereign debt.

The banks with Greek sovereign exposure would have to reduce their respective stocks of capital by the amount of the loan loss. And they would have to inflate the size of their balance sheets, because the residual exposure to the Greek government would lose its official (and some would say insane) zero risk weighting. So the fall in the capital ratios of banks with exposure to Greece would be magnified in a painful way.

Of the larger listed banks, only one, the Franco-Belgian group Dexia, looks as though it would be seriously hurt by a Greek debt writedown. According to Morgan Stanley, Dexia has 4.9bn euros of exposure to Greek sovereign debt, equivalent to more than half the value of its equity capital. Dexia would be significantly weakened by a 50% Greek haircut.

Next at risk, according to Morgan Stanley, would be Commerzbank of Germany, with €3bn of Greek sovereign debt, equivalent to 15% of its capital. Meanwhile BNP Paribas and Credit Agricole of France, Erste of Austria, KBC of Belgium and Deutsche Bank of Germany all have meaningful though not devastating exposures.

Less visible is the Greek exposure of Germany's state backed landesbanks - which regulators tell me is considerable. But if they were to incur large losses on it, Germany could afford to recapitalise them.

So what is going on? Why are eurozone governments so wary of a restructuring or haircut of Greek sovereign debt, given that banks in the round won't be killed by the consequential hit?

There seem to be three reasons.

First, in Germany, it is apparently politically more acceptable to provide rescue finance to Greece directly than to rescue German banks that foolishly and greedily bought Greek debt for its relatively high yield.

Second, a Greek debt restructuring would be a severe blow to eurozone pride in the strength of the currency union.

Third, a Greek haircut might be the thin end of a large wedge. If it created a precedent for haircuts in Portugal and Ireland, the losses for the eurozone's banks would begin to look serious. But again, if there were just a trio of national debt haircuts, if the rot were to stop with Ireland and Portugal, eurozone governments could afford to shore up and recapitalise their banks.

That said, what the eurozone could not afford - or so regulators fear - would be haircut contagion to the likes of Spain and Italy.

But Spain and Italy are looking in better shape. Spain, for example, is taking steps to strengthen its second tier banks and its banks in general have become less dependent on funding from the European central bank (which is a proxy for their perceived weakness).

So here, I think, will be what will determine whether Greece gets its haircut in the next two or three months: if eurozone governments come to believe that Spain is well past the moment of maximum risk of financial crisis, there will be a bold restructuring of Greek debt.

But, to use that awful footballing expression, if they do go for a Greek debt haircut or writedown, it will be squeaky bum time in government buildings all over Europe.

Annapolis, Maryland

"I don't care where he was born. I just wish he would do something abut gas [petrol] prices," a man in Chick and Ruth's diner on the main street of Annapolis in the US state of Maryland told me.

That is the sort of reaction President Barack Obama hopes for. His message is that the fuss about where he was born is bemusing, puzzling, silly and a "sideshow" distracting from the huge economic issues facing America.

But Mr Obama had to kick over the sideshow if the customers at the diner were anything to go by. Most people I spoke had a hazy perception that there was something slightly untrustworthy about the document released by the Obama campaign two and a half years ago. Most thought this had dragged on far too long and deserved to be cleared up.

The argument that Mr Obama isn't eligible to be US president because he wasn't born in the US was once thought to be the preserve of the political fringes, those whose "birther" nickname equates them with the "truthers" who believe 9/11 was carried out by the US government.

But it was plonked centre stage by potential Republican candidate, billionaire property developer and TV star Donald Trump, who has said several times that he doubts Mr Obama was born in Hawaii and that he has put private detectives on the case.

Mr Trump was in New Hampshire today doing multiple stops in this key state. Mr Obama's press conference both stymies his big day and gives him even more publicity. Mr Obama's aim must be to make him look deeply unserious.

Many Obama supporters feel racism motivates the birthers - disbelief that a black man can be an American president. Some birthers are opponents who hate his values so much they think he must be un-American literally as well as metaphorically.

But there's no doubt his team has handled this appallingly.

They have today released the full birth certificate. In 2008 they released a "certification of live birth". The White House communications director writes:

When any citizen born in Hawaii requests their birth certificate, they receive exactly what the president received. In fact, the document posted on the campaign website is what Hawaiians use to get a driver's license from the state and the document recognised by the federal government and the courts for all legal purposes. That's because it is the birth certificate.

That appears to be true, and the Hawaiian authorities were apparently reluctant to publish the full thing. But what could be more delicious to conspiracy theorists than the existence of an unseen document that apparently the authorities were keen to keep from the full public gaze?

In Chick and Ruth's I found a full variety of views about the issue. A waitress said it was crazy that anyone ever doubted when Mr Obama was born, an older man still thought that his president may have been born in Kenyan and wanted to study the document. A younger man had no real doubts but thought this was overdue.

It may not go away. I have already had one e-mail from someone who said he had no interest in were Mr Obama was born but claimed the new document had been doctored.

But one thing is very clear. I was in Annapolis filming a story on the economy, and nearly every customer I spoke to ended up talking, unprompted, about the price of petrol. That was the real issue for them. Like the president, they regarded anything else as a sideshow, albeit an entertaining one.

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MTN on Friday announced a drop in the price of monthly data bundles and customers will now pay R99 for 1GB, 33% lower than previously.

TL;DR: A one-year subscription to Norton Secure VPN is on sale for £2.50 per month, saving you 50% on list price.

It feels like the world of VPNs is expanding, with more and more providers entering the market and increased demand from users. 

This market can be a daunting place, especially as you probably won't be familiar with most of the available providers. This doesn't mean you shouldn't consider these services, but we totally understand if you're reluctant to invest in an unknown provider.

Fortunately for those who would prefer to subscribe to an established provider, there are plenty of options from the leading names in securityNorton is one such brand, with a comprehensive VPN service on sale for just £2.50 per month. Read more...

Prime Minister Justin Trudeau says Canada will not pay the full price for medical masks that do not live up to medical standards.

Most Realtors® Don’t Expect Steep Price Declines in...

Corporate Members Event Webinar

Event participants

Julian Lee, Oil Strategist, Bloomberg LP London
Dr John Sfakianakis, Associate Fellow, Middle East and North Africa Programme, Chatham House; Chief Economist and Head of Research, Gulf Research Center
Professor Paul Stevens, Distinguished Fellow, Energy, Environment and Resources Programme, Chatham House
Emily Stromquist, Director, Castlereagh Associates
Chair: Dr Sanam Vakil, Deputy Director and Senior Research Fellow, Middle East and North Africa Programme, Chatham House

Corporate Members Event Webinar

Event participants

Julian Lee, Oil Strategist, Bloomberg LP London
Dr John Sfakianakis, Associate Fellow, Middle East and North Africa Programme, Chatham House; Chief Economist and Head of Research, Gulf Research Center
Professor Paul Stevens, Distinguished Fellow, Energy, Environment and Resources Programme, Chatham House
Emily Stromquist, Director, Castlereagh Associates
Chair: Dr Sanam Vakil, Deputy Director and Senior Research Fellow, Middle East and North Africa Programme, Chatham House

Host Matt Egan clips us round the ear and tells us to listen up as we chat yet more tech and then some other stuff about tech. Consumer tech editor at PC Advisor Chris Martin lays down his definitive opinion after he went hands on with the Nintendo Switch this week, and why the company really should have had their star plumber ready in time for launch. Tamlin Magee, Online Editor at Computerworld UK then takes us through the odd goings on at Davos, and whether or not the elite can identify with what tech actually means to real working people. To round us up, Acting Macworld UK Editor David Price explains why app prices are going up in the UK for iOS users, and why it might - might - not be UKIP's fault. Sort of.  

See acast.com/privacy for privacy and opt-out information.

Corporate Members Event Webinar

Event participants

Julian Lee, Oil Strategist, Bloomberg LP London
Dr John Sfakianakis, Associate Fellow, Middle East and North Africa Programme, Chatham House; Chief Economist and Head of Research, Gulf Research Center
Professor Paul Stevens, Distinguished Fellow, Energy, Environment and Resources Programme, Chatham House
Emily Stromquist, Director, Castlereagh Associates
Chair: Dr Sanam Vakil, Deputy Director and Senior Research Fellow, Middle East and North Africa Programme, Chatham House

Ravi Gupta, is a resident in internal medicine at Johns Hopkins in Baltimore - and as he said has seen the influence of sudden price hikes on his patients - between 2010 and 2015 more than 300 drugs in the U.S. have seen sudden increases of over %100. Ravi and his co-authors have suggested, and tested the feasibility of, a possible answer to...

One of the best catchers in baseball was available all winter in J.T. Realmuto, and the Reds were very much one of the teams in hot pursuit in trade talks with the Marlins. But on Thursday, it was the Phillies who acquired Realmuto from Miami.

2 July 2014 , Volume 90, Number 4

1 December 2014

A rise in mortality is a price worth paying to restart the US economy, President Trump has said, as many states flout advice from scientists and reopen beaches, cinemas, or hair salons while new...

A federal judge on May 4 granted 3M, the maker of N95 masks, an injunction against a New Jersey-based company accused of using 3M’s trademarks and deliberately inflating the price of the face masks.

Crude oil prices fell Monday amid renewed concerns about potentially declining crude oil demand resulting from weaker economic outlook.

Fuel prices in the United States on average were just a penny higher at $2.25 per gallon, ending consecutive price declines that had occurred since October.

Oil prices rose early Tuesday, after Monday declines, possibly helped by some positive news from China -- but doubts remain as to whether that direction will hold.

Oil prices fell early Wednesday, likely a result of lower-than-expected draws in an API with traders awaiting official EIA inventory data later in the day.

U.S. retail fuel prices will drop this year and in 2020 from 2018, but in both cases higher than January levels due to mandated lower sulfur in marine fuel.

Oil prices fell early Thursday despite an OPEC report confirming a sizable cut due to bearishness related to rising United States production and inventories.

Oil prices fell Monday as the number of rigs in the United States saw a weekly rise, analysts said

Average fuel prices in the United States started the week at $2.26 per gallon, showing little change from the last month or last week, and may remain flat.

Oil prices were higher early Tuesday amid renewed concern about Venezuelan supplies but market worries about China-U.S. trade issues prevented higher gains.

Oil prices rose Wednesday amid expectations that Venezuelan oil shipments would see some disruption following U.S. sanctions.

Oil prices rose early Friday amid supply concerns following reports of smaller-than-expected stocks, and amid reduced expectation of interest rate hikes.

Last week, a gallon of gas at an Exxon station in the tony suburb of Bethesda cost $2.99.

In Eliot Spitzer's sex scandal and tragicomic downfall, the question that bugged many people did not have to do with ethics or politics, but whether Spitzer got a raw deal.

Clothing trade -- Moral and ethical aspects.

London : Bemrose, 1899.

Old habits die hard, and for Hall of Fame goalie Gerry Cheevers, the Bruins-Canadiens rivalry manifested when Cheesy took a shot a Montreal's Carey Price during a Zoom town hall with B's season-ticket holders on Thursday.

Ying Chen, J. S. Marron, Jiejie Zhang.

Source: The Annals of Applied Statistics, Volume 13, Number 3, 1590--1616.

Abstract:
Electricity prices are high dimensional, serially dependent and have seasonal variations. We propose a Warping Functional AutoRegressive (WFAR) model that simultaneously accounts for the cross time-dependence and seasonal variations of the large dimensional data. In particular, electricity price curves are obtained by smoothing over the $24$ discrete hourly prices on each day. In the functional domain, seasonal phase variations are separated from level amplitude changes in a warping process with the Fisher–Rao distance metric, and the aligned (season-adjusted) electricity price curves are modeled in the functional autoregression framework. In a real application, the WFAR model provides superior out-of-sample forecast accuracy in both a normal functioning market, Nord Pool, and an extreme situation, the California market. The forecast performance as well as the relative accuracy improvement are stable for different markets and different time periods.

Peter Bank, Yan Dolinsky.

Source: Bernoulli, Volume 26, Number 3, 2176--2201.

Abstract:
We prove a scaling limit theorem for the super-replication cost of options in a Cox–Ross–Rubinstein binomial model with transient price impact. The correct scaling turns out to keep the market depth parameter constant while resilience over fixed periods of time grows in inverse proportion with the duration between trading times. For vanilla options, the scaling limit is found to coincide with the one obtained by PDE-methods in ( Math. Finance 22 (2012) 250–276) for models with purely temporary price impact. These models are a special case of our framework and so our probabilistic scaling limit argument allows one to expand the scope of the scaling limit result to path-dependent options.

Exiting low inflation traps by "consensus": nominal wages and price stability - Speech by Luiz A Pereira da Silva and Benoît Mojon, based on the keynote speech at the Eighth High-level Policy Dialogue between the Eurosystem and Latin American Central Banks, Cartagena de Indias, Colombia, 28-29 November 2019.

No global real estate market despite higher price synchronisation and growing role of international investors, central banks find (Press release, 18 February 2020)

Prices on P.E.I. for gas, heating oil and diesel all took a big jump upwards Friday.

Global real residential property prices rose 1.4% year/year in aggregate in Q3 2019, reflecting subdued developments both in advanced (+ 1.5%) and emerging market economies (+ 1.3%).

Inflation pressure could be weak even after consumer demand for non-discretionary goods and services begins to grow as the economy gets back on its feet.

Gold and silver prices often move in tandem, but the gap between them widened by 31% January through April in line with a trend that began nine years ago.