Let's look at some of the longer term factors that should be influencing markets, in the hope of tracking down some possible reasons for the markets general bullishness.
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( with apologies to Clement Clarke Moore)
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Democracy and capitalism have something in common; they are both imperfect, but seem better than the other alternatives the World has tried through history. The problems lie at the roots of the systems. Adam Smith said a nation's wealth was founded upon self interest.
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I find myself in the unusual position, for me, of sympathising with the Chancellor, Alistair Darling.
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The argument that cutting incremental rates of income tax could actually increase total tax revenue goes back to Adam Smith, in "A Wealth of Nations." But is there any evidence to support this theory?
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Some sort of windfall tax may well be a justifiable part of any government plans to attack our deficit problems, but it should not be given the prominence that it is likely to receive this week.
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Barclays Bank have come up with a different way to lower the percentage payout their investment banking staff receive at bonus time- ramp up their salaries first.
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More offers being shown in the US last night, but the balance still lay with offers being lifted, rather than bids hit. The CDS indices tightened again, although by less than the previous day.
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A lot more bids around than offers in US bond markets. Some business done in the industrial sector, financials well bid, although some FRN paper was still around. Overall the IG CDS index tightened 3.6bp & the high yield index tightened over 20bp to 661.
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US equities closed with small gains following the news that Dubai are only restructuring $26bn of debt, instead of the rumored $60bn. That helped Asian markets rise 2% plus, but Dubai and Abu Dhabi have opened with 6% falls.
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So much to think about in markets today.. Dubai, Iran etc etc..although nothing to report (trading wise) from the UK morning session. While I catch up on things a few general thoughts. Markets are more than usually vulnerable to news and events right now.
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Tiger Woods' return to the PGA Tour has prompted numerous TV programmes and written articles, speculating about his fitness and whether he will come back better than ever, or struggle to regain the dominance he has enjoyed in recent years on the World Golf scene. As the Master …
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