It’s not been a stellar year for quite a number of bits of the traditional British establishment. Chaos and disappointment definitely make their mark; farce – well, it kind of depends on your sense of humour and the extent to which you can insulate yourself. Top billing must undoubtedly go to the government, or more precisely, the governing party. The UK Conservative party is one of the oldest political parties in the democratic world, and it has an enviable reputation for lo

This article was written by Richard Horswill. All views and opinions expressed are strictly his own. One might be excused for not necessarily understanding the title of this article: however to a particular vintage of reader, the Vapors were a band from the late 70s/ early 80s famous for the catchy tune “Turning Japanese.” This title could be more relevant than one imagines in today’s financial circumstances of the UK and others. But first, what does turning Japanese look lik

Corporate reactions to the period leading up to the funeral of Queen Elizabeth II, and to the day of the funeral itself, are necessarily mixed. Some we can understand, while at others – like the supermarket chain Morrisons who have decided their mark of respect should be to silence the ping noise of the automatic checkout machines, or the Met Office, who have decided that respect is shown by reducing the weather forecast you broadcast – we can rightfully snigger. Some things,

This isn’t going to be a long read, mainly because I still feel I’m on holiday, but just a couple of thoughts about where the LME is, and where it may be going. As someone recently pointed out to me, amongst the 300-odd employees of the Exchange, a vanishingly small number have any real experience of metal trading. Well, you could of course adopt the view that that is a complete irrelevance, since they are running an exchange, not trading metal on it. It sounds reasonable, bu

This article was written by Richard Horswill. All views and opinions expressed are strictly his own. The Great Financial Crisis (GFC) of 2008 was driven by an interbank Repo market failure. What does that mean? Firstly we need to understand what a Repo is. Repo – A practice in which a bank or other financial institution buys securities (collateral) with the proviso that the seller must repurchase the same securities for an agreed-upon price on a certain day. Investors and fin

I’m sorry to come back again to the same topic as last week, but the increasingly hysterical reaction to energy prices forces me to. Latest to throw in his plan is Keir Starmer, the leader of the main UK opposition party. He’s come back from his holidays to give us his masterful solution to a global issue: he’ll impose a windfall tax on energy companies – basically, that is, oil and gas producers – because their profit levels are “more than they expected.” Well, I can see how

One morning this week, I heard a “consumer affairs champion” (not my choice of nomenclature) ranting hysterically – and I do mean hysterically – on Radio 4 about energy prices. The essence of what he was screeching was that we’ll probably all be dead of cold or hunger by the turn of the year, and the government needs to start paying people’s energy bills (OK, that’s a bit simplified, but I think you know what I mean). Now, there is a problem with energy, and to ascribe it all

So far, this year has not been a stellar one for the metals business and the LME. Prices have declined, and the LME has has shown its readiness to embark on a new, innovative policy of cancelling trades, seemingly for no reason other than that somebody either didn’t like the price or couldn’t  (wouldn’t?) pay their margin calls. The business is not in a happy place, right now. But think back, just a few short months. As 2021 and the worst of the Covid pandemic faded, the dawn

This article was written by Martin Hayes. All views and opinions expressed are strictly his own. From July 18th, the LME will introduce weekly OTC position reporting across the spectrum of its physically-deliverable metals markets – a requirement on its members and, indirectly, their clients that had been pushed back little more than a year ago. Ironically, it was the March meltdown (or should that be melt-up?) in the LME nickel market, the subsequent recriminations and flurr

There are probably as many interpretations of the story in the Book of Revelation of the four horsemen of the apocalypse as there are religious sects; in fact, even further than religious, in some ways: there was a nineteenth century biblical scholar called C.F. Wimpel (nope, me neither) who postulated that the first – White – of the horses was ridden by none other than Napoleon Bonaparte. I guess he had some particular axe to grind, although by the time he made his startling

So, as widely predicted, the nickel lawsuits are beginning to drop through the LME’s letterbox. Fun times ahead for the lawyers, I suspect, as it’s going to be an interesting argument. One thing I have to say here in the interests of clarity is that in my previous comments on this problem, I have suggested that the LME were aware of the size of the position built by the major short. That seems to have been incorrect, as at least a part of the whole was run as an OTC rather th

This article was written by Richard Horswill; all views and opinions expressed are strictly his own. As of 1st June 2022 the Federal Reserve initiated quantitative tightening (QT). This is principally a reversal in policy from the previous quantitative easing (QE) that has been used in order to place a somewhat psychological ceiling in the treasury market whereby the Central bank was a consistent buyer of bonds helping to suppress yields and attempt to spur economic growth us

Well, here we go: BP announces a hefty profit and the siren call is raised – “let there be a windfall tax on energy company profits!” Maybe there is some logic in that, but we’ll get to that in a moment. First, just let’s consider that two of the loudest voices screeching are those of former energy ministers, Ed Milliband and Ed Davey. Former energy ministers? Surely they’d know what they are talking about? Sadly, as I have pointed out before – many times – the UK has not had

Trading Exchanges don’t always get things right. We’ve written on here for the past four or five weeks a succession of articles which have nor been particularly complimentary about the LME’s recent handling of the nickel market. I’m going to give that one a break for this week and look at the apparent re-emergence – in the US courts, where else – of a previous story of an Exchange. Cast your mind back, if you will, to April 2020. Lockdown, Covid-drenched atmosphere, eerily em

This article was written by Martin Hates. All views and opinions expressed are strictly his own. After the events of early-March, when the LME nickel market came close to being untradeable and price-unrepresentative, recent days have seen some sort of normality return to both business and prices, although the exchange is not out of the woods yet – cue a trio of wide-ranging external reviews. The imposition of emergency price limit measures, which were progressively widened al

This article was written by Steven Spencer. All views and opinions expressed are strictly his own. The LME today (4th April) issued a notice on Nickel trading which included a point that will raise eyebrows in all corners of the metal industry. Point 8 states: “One aspect that the LME has already identified as having contributed to the situation was sizable positions in the OTC market and the LME’s lack of direct visibility of such activity”. Of course, since the creation of

The tribulations of the LME nickel market continue to make the general press, so I thought it apposite to make a couple more observations about where this fiasco has left the LME, and perhaps think a little about why it finds itself effectively on the naughty step. As I said in my opening sentence last week, it used to be so simple; the LME was a member-owned marketplace, where those who wanted – and had paid up their membership fees and conformed to the basic requirements of

It used to be so simple, so obvious. The London Metal Exchange was a chalk circle, drawn on the floor, around which a bunch of independent traders stood to shout their buy and sell requirements. They codified it, set standards for quality and delivery and so on, and founded the basis of a remarkable market that has lasted and grown since the mid/late nineteenth century. There have been bumps in the road along the way – world wars, market squeezes, market corners, the tin cris

This article was written by Martin Hayes. All views and opinions are strictly his own. Those of us with long memories will recall when the LME last suspended one of its key metal contracts – the October 1985 halt in tin trading, which rocked the exchange to the extent that its very existence was thrown into doubt, but which subsequently ushered in deep structural changes. This time around it is nickel where the LME stopped business after an almost unbelievable 250% jump in pr

Back in August 2015, I wrote an article on here about the sentencing of Tom Hayes, an interest rate trader, in connection with the influencing of LIBOR rates. You may recall he was given fourteen years, reduced on appeal to eleven, and he has subsequently been released after serving half his sentence, which was the parole guidance given by the court. Now, I’m not going to rehash the whole thing here, but I will repeat my personal view that Tom Hayes was treated by the courts