Greece Election Failure

Greece's political gamble has failed, as it has has failed to elect a new president.

As such a general election will have to be held, thus creating massive uncertainty over a new bailout and its membership for the Euro. Suffice to say this is the worst possible outcome for the Eurozone.

Rouble Freefall

As I predicted sometime ago, Russia would end up raising rates (as it did yesterday to 17%) in order to try to fend off the reality of the market.

As I also predicted, raising rates would not work (as the UK learned to its cost when it raised rates to try to prevent it being thrown out of the ERM in 1992). The rouble is in freefall and Russia now faces imposing capital controls, further wrecking the economy.

The question that the West needs to ask itself is this, is pushing Russia to the brink of economic collapse really a sensible policy both economically and geopolitically?

The Great Amazon 1p Giveaway

The dangers of relying on software and algorithms was brought home on Friday when a software error on Friday has led to hundreds of items being sold for just 1p on Amazon, and now businesses say they risk going bankrupt if they are forced to follow through with the sales.

The glitch occurred between 7pm and 8pm on Friday, and affected firms that use the tool RepricerExpress.

RepricerExpress software automatically reprices items of stock if a cheaper version becomes available elsewhere online and is designed to keep businesses competitive.

A Facebook group for those traders who last money from this has been set up.

Traders both online sellers and those who deal with billions of dollars of share trades etc should take heed from this!

Greece Knobbles Its Economy

Greece has been granted a two month bailout extension by the EU, and in light of this Greece has decided to knobble its economy by holding presidential elections two months early. Thus ensuring that Greece is at the top of everyone's mind in the coming weeks.

Greece continues to fall now down over 8%, GR/GE 10y bond spread 47bps wider amid political uncertainty and potential snap elections
— RANsquawk (@RANsquawk) December 9, 2014

Premier Foods' Nice Little Earner

In a sure sign that it is in financial difficulties, Premier Foods (owner of brands that include Mr Kipling, Ambrosia, Bisto and Oxo) has been asking its suppliers for payments to continue doing business with the firm. 

The official term for this practice is "pay and stay". However, one supplier quoted by the BBC referred to it as "blackmail".

Premier Foods is of the view that the scheme did not break any rules under competition law. However, the government said it was "concerned by recent reports".

Newsnight has seen a letter sent by chief executive Gavin Darby, dated 18 November.

"We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas.

We will now require you to make an investment payment to support our growth.

I understand that this approach may lead to some questions.

However, it is important that we take the right steps now to support our future growth."

All very well and seemingly "polite". However, the reality is that if a supplier doesn't cough up, they are "de-listed". As per the BBC, when a supplier raised questions in an email about the annual payments, a member of Premier's staff replied:

"We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list."

As to whether Premier can legally get away with this, is a question for legal experts.

However, what its suppliers needs to ask Premier is given Premier's financial problems, what happens to the "pay and stay investments" already handed over by suppliers if Premier goes bust?

Putin Issues SOS

In a sign that the Russian economy is in dire straits, President Putin has offered an amnesty on capital returning to Russia.

Putin calls for an "amnesty" on capital returning to Russia, meaning if people repatriate their money, they won't face tax/legal questions.
— Paul Sonne (@PaulSonne) December 4, 2014

This is all very well. However, if people were to heed the call to return their capital they would never be able to get it out of the country again.

Chancellor's Autumn Statement Live

Tweets about autumn statement

Russian Economy Going Down The Toilet

The Russian economy, as a result of sanctions, is going down the toilet; the rouble is falling and inflation is kicking in.

Thusfar the Russian Central Bank has staved off using capital/currency controls. However, there is growing internal political pressure within Russia to stave off the decline in the rouble.

It is of course only a short term solution to artificially prop up a failing currency, in the end market forces (or in this case, closed market forces) will have their way.

As to whether it is wise to destroy the Russian economy via sanctions, is of course another question. Whilst the West thinks that this will persuade Moscow to pull back from its Ukrainian adventure, the policy in the Kremlin is geared to a long term (ten year) siege. This is a very dangerous situation for both the global economy and global peace.

Let us hope that the policy makers in the West and in the Kremlin know have plans to pull back from the abyss.

Barclays Introduce Bank Cam Technology

Barclays, in an effort to reduce people's dependency on branches (so that it can close them), intends to introduce a “Skype-like” video calling system to enable staff and customers to communicate with each other.

The Telegraph understands that the service will be introduced in the coming weeks.

The system will be available outside usual bank opening times.

The idea has merits, for those customers with the technology capable of video conferencing. However, it does pose security issues (eg there most certainly will be a risk of hacking).