Will the next Fed meeting’s decision really make a difference?

So now we're all on tenterhooks until 18th Sept.

So now we're all on tenterhooks until 18th Sept., when we hear if the Federal Reserve has decided to reduce, (‘taper’), its monthly bond purchases. Traders, Treasurers, pension pot holders, emerging market Finance Ministers-this is what we’ve been waiting for since Bernanke first warned us in May/June it may be coming.
However, this certainly will be no surprise-this is not 1994 with its surprise Fed hike and bond market rout. The Fed has done a fantastic job of delivering an unpopular message-the start of the end of cheap money-in a manner designed to cause the least possible market volatility, and maybe the still buoyant level of the S&P 500 is eloquent testimony to their success. The reasons for the S&P's resilience are important.
Developed market countries' stock markets have retained their poise because US bonds yields have been going up for a good reason-and that is the return of growth and optimism, not just in the US, but also in Europe and China. The rise in 10-yr US Treasury yields from 1.4% to 3.0% is best described as a healthy normalisation, as it has been driven by a reduction in the all-pervading fear which has gripped the market since the Lehman bankruptcy, first, and then the emergence of the Eurozone crisis, once the depth of Greece's fiscal mess became clear.
This basic human response to seek safe-haven has played an equally important part as that of QE in keeping yields subdued.
Only in the last six months have we started to return to the 'normal' modus operandum, in which long term yields are the sum of compounded short rates and the risk premium, the latter being investors' judgement of future liquidity, credit, and fiscal and monetary policy uncertainty over the life of the bond.
Paradoxically, desperate safe-haven flight far outweighed those factors for US Treasuries, and collapsed the risk premium. We have now returned to a normal state of affairs, with the Eurozone crisis also contained, as we all belatedly came to appreciate that political will would easily overcome any economic maladies.
This has lead me to the scary conclusion that while the FOMC's pronouncements on 18th may prompt a temporary rally in US Treasuries, (especially as there is a 50 per cent probability that they will lower the employment threshold for rate rises from 6.5 per cent to 6 per cent), but that will be a great opportunity to sell bonds.
This is a bond bear market-and companies like Verizon are very wise indeed to lock in cheap borrowing. Growth is on the rise worldwide, (even rather anaemically in Europe), and I'm afraid the Fed won't have any room for hesitation driven by concerns over the effect of tapering on emerging markets, as was made abundantly clear by a couple of senior Fed officials at the Jackson Hole conference. No wonder; the Fed-haters in the Senate would have a field day if the FOMC seemed to be managing other countries' economies for them. (Of course, those Senators give no thought for the potential negative feedback effects that an EM crisis could have on the US).
Let's say the Fed doesn’t actually taper QE at all, that will send stock markets soaring and give business confidence another boost-quickly pushing yields higher anyway.

Ben Bernanke Photograph: Getty Images

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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What David Hockney has to tell us about football

Why the sudden glut of blond footballers? A conversation I had with the artist back in 1966 gave me a clue. . .

In 1966, I went to interview David Hockney at a rather run-down flat in Bayswater, central London. He was 28 and had just won a gold medal at the Royal College of Art.

In his lavatory, I noticed a cut-out photograph from a newspaper of Denis Law scoring a goal. I asked if he was a football fan. He said no, he just liked Denis Law’s thighs.

The sub-editors cut that remark out of the story, to save any gossip or legal problems. In 1966 homosexual activity could still be an offence.

Hockney and a friend had recently been in the United States and had been watching an advert on TV that said “Blondes have more fun”. At two o’clock in the morning, slightly drunk, they both went out, bought some hair dye and became blond. Hockney decided to remain blond from then on, though he has naturally dark hair.

Is it true that blonds have more fun? Lionel Messi presumably thinks so, otherwise why has he greeted this brand-new season with that weird blond hair? We look at his face, his figure, his posture and we know it’s him – then we blink, thinking what the heck, does he realise some joker has been pouring stuff on his head?

He has always been such a staid, old-fashioned-looking lad, never messing around with his hair till now. Neymar, beside him, has gone even blonder, but somehow we expect it of him. He had foony hair even before he left Brazil.

Over here, blonds are popping up all over the shop. Most teams now have a born-again blondie. It must take a fortune for Marouane Fellaini of Man United to brighten up his hair, as he has so much. But it’s already fading. Cheapskate.

Mesut Özil of Arsenal held back, not going the full head, just bits of it, which I suspect is a clue to his wavering, hesitant personality. His colleague Aaron Ramsey has almost the full blond monty. Paul Pogba of Man United has a sort of blond streak, more like a marker pen than a makeover. His colleague Phil Jones has appeared blond, but he seems to have disappeared from the team sheet. Samir Nasri of Man City went startlingly blond, but is on loan to Seville, so we’re not able to enjoy his locks. And Didier Ndong of Sunderland is a striking blond, thanks to gallons of bleach.

Remember the Romanians in the 1998 World Cup? They suddenly appeared blond, every one of them. God, that was brilliant. One of my all-time best World Cup moments, and I was at Wembley in 1966.

So, why do they do it? Well, Hockney was right, in a sense. Not to have more fun – meaning more sex – because top footballers are more than well supplied, but because their normal working lives are on the whole devoid of fun.

They can’t stuff their faces with fast food, drink themselves stupid, stay up all night, take a few silly pills – which is what many of our healthy 25-year-old lads consider a reasonably fun evening. Nor can they spend all their millions on fun hols, such as skiing in the winter, a safari in the spring, or hang-gliding at the weekend. Prem players have to be so boringly sensible these days, or their foreign managers will be screaming at them in their funny foreign accents.

While not on the pitch, or training, which takes up only a few hours a day, the boredom is appalling, endlessly on planes or coaches or in some hotel that could be anywhere.

The only bright spot in the long days is to look in the mirror and think: “Hmm, I wonder what highlights would look like? I’ve done the beard and the tattoos. Now let’s go for blond. Wow, gorgeous.”

They influence each other, being simple souls, so when one dyes his hair, depending on where he is in the macho pecking order, others follow. They put in the day by looking at themselves. Harmless fun. Bless ’em.

But I expect all the faux blonds to have gone by Christmas. Along with Mourinho. I said that to myself the moment he arrived in Manchester, smirking away. Pep will see him off. OK then, let’s say Easter at the latest . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times