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description of "r": Slanted upstroke, then a gentle slide downwards, followed by a steep curve downwards
- slanted: here: to incline toward someone or something.
- upstroke: an upward stroke ( a mark made on a surface as of a pen or brush) or movement
- slide: 6.a. To move downward
The European Central Bank president has offered lenders a fresh round of cash for as long as four years to keep them afloat and make them support an economic recovery by encouraging lending.
- fresh round of cash
- keep them afloat
He’s also inviting bets on when the ECB will scale back its ultra-loose monetary policy -- the more a bank expects borrowing costs
will rise over the term, the more attractive the loan looks.
scale back its ultra-loose monetary policy
After the ECB unveiled an unprecedented plan for boosting the euro area’s floundering revival, economists and investors are still grappling with its intricacy.
- boost: 1. To raise or lift by pushing up from behind or below. See Synonyms at lift.
- clumsy: Lacking physical coordination, skill, or grace; awkward.
- floundering: To make clumsy attempts to move or regain one's balance. To move or act clumsily and in confusion
- grappling: the act of engaging in close hand-to-hand combat
While Draghi is trying to reassure investors that the ECB will keep policy loose for longer than the U.S. Federal Reserve and Bank of England, the link between the size of stimulus now and the prospect of higher rates later is a reminder that cheap money won’t be around forever.
to reassure investors
“Draghi’s latest move has stepped up the complexity of monetary policy, though simpler options exist. “I’d reserve judgment until we see results from the economy, but if I were trying to make a guess, it would be a 50-50 call whether it’s going to work or not.”
- stepped up the complexity
- I’d reserve judgment
- a 50-50 call
So far, the ECB’s package has prompted a plunge in money markets. Overnight interbank borrowing costs in the currency bloc have averaged 0.06 percent this month compared with 0.25 percent in May. That’s probably enough to stave off further action for now. The Governing Council will keep interest rates unchanged when it gathers in Frankfurt on July 3, according to Bloomberg surveys of economists.
- prompt: 2. To give rise to; inspire
- plunge: 6. To become suddenly lower; decrease dramatically
- stave off: here: to prevent in time
The impact on the broader economy may take longer to materialize. Inflation (ECCPEST) in the 18-nation bloc held at 0.5 percent in June, about a quarter of the ECB’s goal, according to figures today from the European Union’s statistics office. Lending to companies and households in the euro area fell for a 25th month in May, ECB data showed earlier.
- the broader economy
- The impact...materialize.
The latest addition to the ECB’s policy alphabet soup -- TLTROs, or targeted longer-term refinancing operations -- as a response to fading price pressures is more than a standard supply of central-bank cash. While banks can borrow funds for two years with no strings attached, and even use them to roll over existing emergency ECB loans, they must prove the money has been lent on to companies and households if they want to keep the funding until the program ends in 2018.
fading: 1. A waning; a decline.
A response to fading price pressures
Draghi pledged to keep official rates low and extended until the end of 2016 a policy of providing as much short-term liquidity as banks request. That creates a quandary - - determining which funding source is cheapest.
quandary: a state of perplexity or uncertainty, esp. as to what to do; dilemma
Banks can borrow in the ECB’s weekly and three-monthly operations at the benchmark rate, currently 0.15 percent. While the TLTROs will be priced at a 0.1 percentage-point premium, and so probably cost 0.25 percent in the first round of offers, the rate will be fixed for the term of the loan. The appeal therefore hinges on banks’ expectations for when and by how much the benchmark rate will increase.
hinge: To be contingent on a single factor; depend
“It’s a bit of a conundrum,” said Nick Matthews, senior economist at Nomura International Plc in London. “The program can be interpreted to suggest the ECB could be open to increasing the refinancing rate sometime in 2017, when the actual message and focus should be on the fact that rates will stay low for an extended period.”
conundrum: A paradoxical, insoluble, or difficult problem; a dilemma
“The ECB has an interest in telling us now that interest rates will remain low for a while, but that doesn’t mean that their hands are tied for the next four years”. “The new loans are built on the premise that interest rates will rise toward the end of 2016. If banks don’t believe that, it’s hardly an attractive offer.”
premise 1. A proposition upon which an argument is based or from which a conclusion is drawn.2. Logic a. One of the propositions in a deductive argument.b. Either the major or the minor proposition of a syllogism, from which the conclusion is drawn.3. premises a. Land, the buildings on it, or both the land and the buildings on it.b. A building or particular portion of a building.c. Law The part of a deed that states the details of the conveyance of the property.v. prem·ised, prem·is·ing, prem·is·es 1. To provide a basis for; base: "The American Revolution had been premised on a tacit bargain that regional conflicts would be subordinated to the need for unity among the states" (Ron Chernow).2. To state or assume as a proposition in an argument.3. To state in advance as an introduction or explanation.
Francesco Papadia, a former director general of market operations at the ECB and now chairman of Prime Collateralised Securities in Frankfurt, estimates that the take-up will be less than 300 billion euros. He says the funds will effectively be used to roll over some of the emergency loans issued by the ECB in late 2011 and early 2012 that mature early next year.
take-up: the claiming or acceptance of something, esp a state benefit, that is due or available
In addition, the ECB will make a quarterly offer from March 2015 to June 2016 of 3 euros for every 1 euro of new bank lending. The central bank has yet to spell out the details for that part of the plan.
spell out: to make clear, distinct, or explicit; clarify in detail
The crunch has been particularly harsh in debt-strapped countries in the region’s south. Banks there will probably benefit most from the latest stimulus.
- crunch: A period of financial difficulty characterized by tight money and unavailability of credit.
- harsh: Unpleasant or uncomfortable
- strapped: In financial need
TLTRO costs for Spanish and Italian banks could be as much as 114 basis points below equivalent wholesale funding for four years, or as much as 73 basis points for two years. That compares with savings for German lenders of as much as 84 basis points and French ones of 38 basis points.
Wholesale funding (wikipedia): is a method that banks use in addition to core demand deposits to finance operations and manage risk. Wholesale funding sources include, but are not limited to, Federal funds, public funds (such as state and local municipalities), U.S. Federal Home Loan Bank advances, the U.S. Federal Reserve's primary credit program, foreign deposits, brokered deposits, and deposits obtained through the Internet or CD listing services.
“It’s a very sweet offer for banks, who on top of taking the money can claim to support the recovery,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “But I can’t see banks shifting their feet quickly on lending to smaller companies.”
shifting their feet quickly
“Net lending is likely to recover in the next couple of years irrespective of the TLTRO,” he said. That’s “the great irony, and the Governing Council’s potential ‘get out of jail free’ card” when it comes to assessing the success of the initiative, he said.
‘get out of jail free’ card: (idiomatic) something that will relieve an undesired situation
Russia, the world’s largest producer, can no longer rely on the same oil revenues to rescue an economy suffering from European and U.S. sanctions. Iran, also reeling from similar sanctions, will need to reduce subsidies that have partly insulated its growing population. Nigeria, fighting an Islamic insurgency, and Venezuela, crippled by failing political and economic policies, also rank among the biggest losers from the decision by the Organization of Petroleum Exporting Countries last week to let the force of the market determine what some experts say will be the first free-fall in decades.
- reel: 1. To be thrown off balance or fall back: reeled from the sharp blow. 2. To stagger, lurch, or sway, as from drunkenness: reeled down the alley.
- cripple: 1. To cause to lose the use of a
- limb or limbs. 2. To disable, damage, or impair the functioning of: a strike
- that crippled the factory.
A world already unsettled by Russian-inspired insurrection in Ukraine to the onslaught of Islamic State in the Middle East is about be roiled further as crude prices plunge. Global energy markets have been upended by an unprecedented North American oil boom brought on by hydraulic fracturing, the process of blasting shale rocks to release oil and gas.
- unsettle: 1. To change from a settled condition; disrupt: Strikes unsettled the economy. 2. To make uneasy; disturb: We were unsettled by the gruesome news.
- onslaught: 1. A violent attack.
- roil: 1. To make (a liquid) turbulent or muddy or cloudy by stirring up sediment: The storm roiled the waters of the harbor. 2. To cause to be in a state of agitation or disorder: wars that roiled the continent for decades.
- upend: 3. to defeat in competition.
- bring on: to induce or cause: these pills will bring on labour.
- blast: 1. To knock down or shatter by explosion; smash.
Draghi said any “undue tightening” in the monetary stance could be met with measures including an extension of the policy of granting banks unlimited cash or offering new long-term loans.
undue: Exceeding what is appropriate or normal; excessive
The inflation rate held steady in June at less than half the ECB’s target, underscoring the challenge faced by Mario Draghi as he tries to stoke prices and ignite growth.
- underscore: A line drawn under writing to indicate emphasis
- stoke: To stir up and feed (a fire or furnace).
- ignite: to catch fire or set fire to; burn or cause to burn
As long as the inflation rate is considerably below our definition of price stability, there is a risk that expectations for future inflation become unanchored
unanchor: To loose from the anchor, as a ship.
Indications that the euro-area’s recovery is flagging have been mounting with consumer confidence unexpectedly falling in June and the jobless rate, at 11.7 percent in April, just off the record. We think that we are likely close to the trough in inflation
- flagging: Declining; weakening
- mount: To climb or ascend
- trough: A low point in a business cycle or on a statistical graph.
Obama announces US crackdown on inversion tax 'loophole'
- crackdown: forceful prevention; putting down by power or authority;
- loophole: an ambiguity, omission, etc, as in a law, by which one can avoid a penalty or responsibility
According to sources, the company has been talking to a cadre of major reinsurers in the market about a deal that could see them sign up to write around 20 percent of all its outwards programmes on a multi-year basis.
- Cadre: a basic unit or structure, esp of specialists or experts; nucleus; core
- sign up: To agree to be a participant or recipient by signing one's name; enlist
Ace is working on an internal hedge fund-style reinsurance vehicle ... that could see significant amounts of ceded premium siphoned off from the traditional market.
siphon off: convey, draw off, or empty by or as if by a siphon. take liquid out of a container
Both the follow-form reinsurance initiative and hedge fund-style vehicle are being spearheaded internally by chief reinsurance officer Bill O'Farrell
spearhead: to lead or initiate
While bemoaning the additional squeeze Ace's proposed strategy change will put on reinsurers, senior underwriting sources have conceded the move is both unsurprising and likely to prove successful, given the quality of the insurer's underlying book of business.
bemoan: To express disapproval of or regret for; deplore
The Insurance Insider revealed early last month that a clutch of (re)insurers had submitted indicative bids to buy the business in a Goldman Sachs-run sale process
clutch: 3. a group, bunch, or cluster
The reduction was announced in a pre-emption and de-emption schedule for the 2015 year of account released by Lloyd's
Emption: The act of buying
Ark sails swiftly with 13-strong Hardy marine & energy raid
- sail: To travel by water in a vessel.
- raid: A surprise attack by a small armed force
CNA acquired the London-listed Hardy Underwriting in 2012 for £143mn and has already overhauled its executive team.
overhaul: To examine or go over carefully for needed repairs.
In addition, The Insurance Insider revealed last week that Hardy's erstwhile head of cargo/specie Edward Barker left the insurer for Beazley
erstwhile: In the past; at a former time; formerly.
Information on the top-secret project is scant at this stage, but the broking sources said that the former Lancashire CEO will not look to create an identikit hedge fund reinsurance vehicle with the standard $750mn-$1bn of capital.
- scant: scarcely sufficient; limited
- identikit: artificially created by copying different elements in an attempt to form a whole
To ensure the relevance of the business in an increasingly tiered market where even $2bn-equity companies are seen as under threat, Brindle may have to break with the recent pattern for start-ups and look to raise a higher sum.
tiered market: The situation in which investors favor a group of securities over other, similar groups of securities. This results in the price of the first group being higher than all other groups, sometimes significantly so. This may occur for a number of reasons: for examples investors may expect future earnings on the first group to be higher. Alternatively, the first group may simply employ better marketing tactics. The specific securities in different tiers change as investors expectations change. The term should not be confused with "two-tier market."
The insurance entrepreneur is widely believed to have become disillusioned with the onerousness of running a public company.
onerousness: Law Entailing obligations that exceed advantages
Brindle is understood to have held talks with AM Best and senior brokers to gauge the current state of the market.
gauge: To evaluate or judge
The circumstances around Brindle's departure are not clear, however, his weariness with the responsibilities attached to running a business listed on the London Stock Exchange is believed to have contributed to his exit.
weariness: Expressive of or prompted by fatigue
XL Group is looking for a new head of its reinsurance operations after revealing that the incumbent, James Veghte, is retiring from the company at the end of the year.
Commenting on the departure, XL CEO Mike McGavick said: "In a tumultuous industry, Jamie has been steadfast, building our reinsurance segment into the strong operation it is today - built on intelligent underwriting, solid judgment, and superior client and broker relationships - all of which are traits that come personally from Jamie's leadership."
- incumbent: Currently holding a specified office
- tumultuous: Confusedly or violently agitated
- steadfast: fixed in intensity or direction; steady
The increase in apprehension has naturally led to an increase in volatility. Russia has spent $13 billion from its foreign reserves this month to slow the ruble’s weakening as tumbling oil prices add to the woes of an economy that’s teetering toward recession amid the sanctions by the U.S. and European Union.
- apprehension: fear or anxiety over what may happen
- woes: Misfortune; calamity: economic and political woes.
- teetering: To walk or move unsteadily or unsurely; totter
- amid: Surrounded by; in the middle of.
The downgrade is driven by “Russia’s increasingly subdued medium-term growth prospect,”. “The gradual and ongoing erosion of the country’s international reserve buffer” contributed to a weakening of Russia’s creditworthiness, she said.
- subdued: reduced in fullness of tone, as a color or sound; muted.
- buffer: Something that lessens or absorbs the shock of an impact.
Ukrainian President Petro Poroshenko, German Chancellor Angela Merkel and Russian leader Vladimir Putin sought during Milan talks last week to shore up a six-week truce amid continuing skirmishes between government troops and pro-Russian separatists.
- sought: Past tense and past participle of seek.
- shore up: support by placing against something solid or rigid
- truce: A temporary cessation or suspension of hostilities by agreement of the opposing sides; an armistice.
- skirmishes: A minor battle in war, as one between small forces or between large forces avoiding direct conflict.
Brent extended its decline from a four-year low as OPEC braced for a price war with U.S. shale producers after taking no action to relieve a glut. West Texas Intermediate headed for the biggest weekly drop since 2011.
- brace: 3. To prepare or position so as to be ready for impact or danger: Union members braced themselves for a confrontation with management.
- glut: An oversupply
The 12-member group, which pumps 40 percent of the world’s oil, will convene again June 5 in the Austrian capital.
OPEC has relinquished the role of balancing the market. If they had cut production and prices had increased then they would, by definition, be losing market share. They would be encouraging and supporting further shale production. For them, short-term pain for long-term gain.
- convene: To come
- together usually for an official or public purpose; assemble formally.
- relinquish: To retire from; give up or
Few expected the extent or speed of the U.S. oil resurgence. As wildcatters unlocked new energy supplies, some oil exporters abroad failed to invest in diversifying their economies. Coddled by years of $100 crude, governments instead spent that windfall subsidizing everything from 5 cents-per-gallon gasoline to cheap housing that kept a growing population of underemployed citizens content.
- wildcatters: One who is engaged in speculative mining or well drilling in areas not known to be productive
- Coddled: 1. to treat with indulgence 2. (Cookery) to cook (something, esp eggs) in water just below the boiling point
- windfall: 1. (Banking & Finance) a piece of unexpected good fortune, esp financial gain. 2. (Botany) something blown down by the wind, esp a piece of fruit. 3. (Forestry) US and Canadian a plot of land covered with trees blown down by the wind
“If the governments aren’t able to spend to keep the kids off the streets they will go back to the streets, and we could start to see political disruption and upheaval,” said Paul Stevens, distinguished fellow for energy, environment and resources at Chatham House in London, a U.K. policy group.
- disruption: 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. To interrupt or impede the progress of: Our efforts in the garden were disrupted by an early frost. The noise disrupted my nap. 3. To break apart or alter so as to prevent normal or expected functioning: radiation that disrupts DNA and kills bacteria.
- upheaval: 1. a strong, sudden, or violent disturbance, as in politics, social conditions, etc. 2. (Geological Science) geology another word for uplift
"Qatar can live with relatively lower oil prices for a while, but this isn’t the case for Iran” said Marie-Claire Aoun, director of the energy center at the French Institute for International Relations in Paris. “Strong demographic pressure is feeding their energy and budgetary requirements. The price of crude is paramount for their economies because they have failed to diversify.”
paramount: 1. Of chief concern or importance: "My paramount object in this struggle is to save the Union" (Abraham Lincoln). 2. Highest in rank, power, or authority: the paramount leader of the nation.
Brent crude is poised for the biggest annual decline since 2008 after OPEC last week rejected calls for production cuts that would address a global glut.
poised for something: ready for something; in the right position and waiting for something. The cat stared at the mouse, poised for action. The army was poised for battle.
Like this year’s decline, oil’s crash in the 1980s was brought on by a Saudi-led decision to defend its market share, sending crude to about $12 a barrel.
bring on: To cause something to arise: Eating ice cream too fast can bring on a headache.
VTB Group, Russia’s second-largest bank, is already seeking government aid to replenish capital after sanctions cut them off from international financial markets. Now with sputtering economic growth, they also face a rise in bad loans.
- replenish: to rebuild the supply of something with more of it. I will replenish the checking account with more money at the end of the month. Can I replenish your glasswith more iced tea?
- cut off: to block or isolate someone or something from some place or something.
- sputtering: 1. To spit out or spray particles of saliva or food from the mouth in noisy bursts. 2. To spit out words or sounds in an excited or confused manner. 3. To make sporadic spitting or popping sounds: The fire sputtered and died.
Russia has already lost almost $90 billion of its currency reserves this year, equal to 4.5 percent of its economy, as it tried to prevent the ruble from tumbling after Western countries imposed sanctions to punish Russian meddling in Ukraine.
meddling: 1. To intrude into other people's affairs or business; interfere. 2. To handle something carelessly or ignorantly; tamper: Don't meddle with my cell phone!
Even before the price tumble, Iran’s oil exports were already crumbling because of sanctions imposed over its nuclear program. Production is at a 20-year low, exports have fallen by half since early 2012 to 1 million barrels a day, and the rial has plummeted 80 percent on the black market, says the IMF.
crumble: To break into small fragments or pieces: I crumbled the cheese into the salad. 1. To fall into small fragments or pieces; disintegrate: The ancient castle had crumbled to ruins. 2. To give way; collapse: an ego that crumbles under pressure. Noun: A baked dessert of fruit topped with a crumbly pastry mixture: cherry crumble.
“The oil price decline is not a game changer for Iran,” said Suzanne Maloney, senior fellow at the Brookings Institution, a Washington-based research organization, who specializes on Iran. “The Iranians were already losing so many billions of dollars because of the sanctions that the oil price decline is just icing on the cake.”
icing: 1. A sweet glaze made of sugar, butter, water, and egg whites or milk, often flavored and cooked and used to cover or decorate baked goods, such as cakes or cookies.
While oil’s decline wrenches oil-rich nations that squandered the profits from recent high prices, the world economy overall may benefit.
- wrenches: 1. to give (something) a sudden or violent twist or pull esp so as to remove (something) from that to which it is attached: to wrench a door off its hinges.
- squander: 1. To spend wastefully or extravagantly; dissipate. See Synonyms at waste. 2. To fail to take advantage of: squandered an opportunity to go to college.
Even before oil’s rout, Venezuela was teetering. The country was paralyzed by deadly riots earlier this year after police repressed protests about spiraling inflation, shortages of consumer goods and worsening crime.
- rout: a. A disorderly retreat or flight following defeat. b. An overwhelming defeat.
- teetering: 1. To move or sway unsteadily or unsurely; totter.
- riot: A wild or turbulent disturbance created by a large number of people
The dire state of the economy is likely to trigger renewed social unrest, while it seems that the government is running out of hard currency. Though all these entail difficult choices, default is not an appealing alternative.
- dire: 1. Warning of or having dreadful or terrible consequences; calamitous: a dire economic forecast; dire threats. 2. Urgent; desperate: in dire need; dire poverty.
- entail: 1. To have, impose, or require as a necessary accompaniment or consequence: The investment entailed a high risk. The proposition X is a rose entails the proposition X is a flower because all roses are flowers. 2. To limit the inheritance of (property) to a specified succession of heirs. 3. To bestow or impose on a person or a specified succession of heirs.
The government is going down this path reluctantly, with its back against the fiscal wall, and it remains wedded to the idea of a ‘‘developmental state’’ in which state-owned enterprises are used to further a host of social and economic development objectives.
- reluctant: 1. Unwilling; disinclined: reluctant to help. 2. Exhibiting or marked by unwillingness: reluctant cooperation.
- wedded: 1. Joined in marriage. 2. Of or relating to marriage: wedded bliss. 3. Closely attached or devoted: a person completely wedded to a profession.
- to further: To help the progress of; promote.
- host: here: 1. a multitude or great number of persons or things: a host of details.
Winds from the Sahara that bring dry weather and dust that damage crops will blanket Ghana, the world’s second largest cocoa producer, through the end of January, according to the nation’s meteorological agency.
A blanket is a type of bedding, generally speaking, a large piece of cloth, intended to keep the user warm, especially while sleeping. Blankets are distinguished from sheets by their thickness and purpose; the thickest sheet is still thinner than the lightest blanket.
Eight days after President Nicolas Maduro vowed to unleash a “counter offensive” to revive Venezuela’s economy, he’s yet to unveil any new measures. For bondholders, it’s just one more example of how his tough talk is seldom followed by actions. Making announcements that just say that there will be announcements is quixotic at a time like this
- vowed: 1. To promise solemnly; pledge. See Synonyms at promise. 2. To make a pledge or threat to undertake: vowing revenge on their persecutors.
- unleash: 1. To release or loose from a leash: unleashed the guard dogs. 2. To set free from restraints: unleashed his anger.
- tough: 1. Able to withstand great strain without tearing or breaking; strong and resilient: a tough all-weather fabric. 2. Hard to cut or chew: tough meat.
- quixotic: 1. Caught up in the romance of noble deeds and the pursuit of unreachable goals; idealistic without regard to practicality. 2. Capricious; impulsive: "At worst his scruples must have been quixotic, not malicious"