Good morning!

I'd like to thank you all for staying with us through the recent changes.

Let's see what's going on in the RNS:

  • Angling Direct (LON:ANG) - trading update. New store opened in Nottingham on Friday, Like-for-like sales growth very strong.
  • Franchise Brands (LON:FRAN) - AGM statement. "Overall, the group is trading well."
  • Keywords Studios (LON:KWS) - acquisition in Japan for JPY 120 million (£800k).
  • Totally (LON:TLY) - healthcare contract worth £13.5 million in Newcastle (not sure what the margins are).
  • Fastjet (LON:FJET) - small underlying loss in Q1. Might make a small underlying profit in FY 2019. Severe currency issues in Zimbabwe.
  • Hipgnosis Songs Fund (LON:SONG) - buys a major music catalogue including "Havana" (1.5 billion hits on YouTube). Price not given.


ZIRP Absurdity

I was thinking about putting an update out on the general state of the markets, and have been prodded into doing so by a comment in the thread below.

These two words sum up my thoughts: ZIRP Absurdity.

For those who aren't economics nerds, ZIRP stands for the "Zero Interest Rate Policy" favoured by so many central banks since the global financial crisis.

If the interest rate is close enough to zero that it makes it makes little difference, we can still refer to it as ZIRP. The Bank of England, for example, has inched up the Bank Rate only to 0.75%, and I would say that is close enough to zero that it makes little difference.

From the 1950s until the financial crisis, Bank Rate was in a range of 4% to 16%.

The USA recently escaped from ZIRP: the US interest rate is now within a 2.25% - 2.5% range.

With US government debt ballooning to $22 trillion, however (more than 100% of GDP), the prospect of much higher rates appears unlikely. Indeed, the Federal Reserve stopped increasing rates at the end of last year, and might even start cutting rates again over the next 12 months.

The Eurozone remains mired in ZIRP and only a few months ago finally halted its QE programme.

What it means

All of this easy monetary…

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