Comment First the uber-dove Bill Dudley spoke: Real Time Economics – Fed’s Dudley: No One Can Say When the First Rate Increase Will Be Federal Reserve Bank of New York President William Dudley said Tuesday it’s impossible to say when the central bank will start raising interest rates. “No one knows when the timing of… Continue reading Fed Presidents Speak
CNBC – Fed minutes could spark (more) market volatility Fed watchers have been expecting a ho-hum set of minutes from the Fed’s last meeting Wednesday, but they could be spiced up with some new information on the Fed’s post-bond buying strategy. Two Fed officials spoke during Tuesday’s volatile trading, and some traders pinned the action… Continue reading The FOMC Minutes Are Released Today
<Click on chart for larger image> Contra Corner – More On The Surge In Belgian Treasury Holdings: Another $ Collateral Scramble Brewing? The global dollar situation continues to get muddied by divergent and apparently unrelated factors of significant scale. The Chinese are still not buying UST with nearly the same vigor that was very evident… Continue reading Belgium’s Holdings Of U.S. Treasuries
The Financial Times – Mutual funds not guilty of systemic risk charge Leverage is main culprit in financial system failure On both sides of the Atlantic, regulators say mutual funds may be “systemically important financial institutions” and therefore subject to bank-like regulation. This would be incorrect and harmful. What makes a financial institution systemically important?… Continue reading Mutual Funds
The Wall Street Journal – Debt Rises in Leveraged Buyouts Despite Warnings Wall Street banks are financing more private-equity takeovers with high levels of debt, despite warnings by regulators to reduce the amount of risky loans they make. The Federal Reserve and the Office of the Comptroller of the Currency last year issued guidance urging… Continue reading Leveraged Buyouts And Debt
The Financial Times – European Central Bank ‘unlikely to fire the big bazooka’ “The European Central Bank enters uncharted territory.” “The next big experiment for central banks.” “Banks fined for parking funds overnight.” Mario Draghi, ECB president, is on course for further striking headlines after the central bank’s next governing council on June 5. A… Continue reading The ECB Is Entering Uncharted Territory
Bloomberg.com – Bundesbank Warns Market Calm Hides Risks in Yield Search New risks to financial stability could emerge from the combination of generous central bank policies and investors’ search for yield in a low-interest rate environment, Bundesbank board member Andreas Dombret said. “We do see risks, despite the fact that the markets are calm,” Dombret… Continue reading Germany
Bloomberg.com – Fuld Was Top CEO When Fed Last Raised as New Neutral Era Beckons It may be hard to remember, but there was once a time when central banks raised interest rates. The last time the Federal Reserve did so, in June 2006, Barack Obama was still a U.S. senator and Richard Fuld appeared… Continue reading Back To 2006, The Last Time Interest Rates Were Raised
Zero Hedge – ‘Unpatriotic’ Citi Turns Bullish Russian Stocks While The White House’s Jay Carney issued his “sell” recommendation week ago now, it appears Citi’s FX techicals group have decided to do the unpatriotic thing and look for a positive “rusk”-on environment as Russia’s MICEX stock market index begins to test pivotal resistance…A break through… Continue reading Don’t Take Your Investment Advice From The Government
<Click on chart for larger image> Business Week – Is China’s Housing Bubble Beginning to Burst? Earlier this month, financial analysts from Japan-based Nomura Group (NMR) issued a grim report on China’s housing market: “To us, it is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be,” the… Continue reading More On China’s Problems
Bloomberg.com – Mom and Pop Bet Against Hedge Funds on Junk-Rated Loans Mom-and-Pop investors have had it with junk-rated loans. Professional money managers, meanwhile, are still piling in and using borrowed money to buy them up. History will decide who’s the smart money here. For now, the Wall Street crowd is winning: Hedge funds and… Continue reading Reaching For Yield