New Economic Perspective – L. Randall Wray: The Greatest Myth Propagated About The FED: Central Bank Independence It has been commonplace to speak of central bank independence—as if it were both a reality and a necessity. Discussions of the Fed invariably refer to legislated independence and often to the famous 1951 Accord that apparently settled… Continue reading Central Bank Independence
The Financial Times – Treasure hunt in US bond junkyard turns tricky Hunting treasure in the junkyard of capital markets has been easy in recent years. Junk – or high yield – bonds have consistently rallied since the financial crisis. But as benchmark interest rates start to rise, that search is about to become a… Continue reading Junk Bonds In The Taper Era
The Wall Street Journal – Banks Get a Break on Leverage-Ratio Rules World banking regulators said they would soften the terms of a rule meant to ensure banks’ soundness, bowing to pressure from banks that had argued it would stifle their lending to consumers and businesses. The Basel Committee for Banking Supervision, made up of… Continue reading Regulatory Changes To Leverage Ratios
Scott Skyrm – The Year In Repo – 2013 Predictions For 2014 1. Large Bank Repo Matched-Books Eliminated – No more “market making” in Repo, securities finance, and/or stock loan for customers. The matched-book businesses will disappear at large banks, spreads will widen to reflect the additional regulatory costs, and new players will fill the… Continue reading The Repo Market
Comment Below is an interesting chart from Deutsch Bank highlighting the increasing difficulty the Fed is having in getting their point across. Interestingly, the number of words in Fed statements seems to track fairly well with the size of their balance sheet. Well done!
KingWorldNews.com – David Stockman – The United States Is Being Destroyed Today David Stockman spoke with King World News about how the United States is being destroyed. Stockman also warned about the enormous dangers of the Fed’s actions for the entire world. KWN takes Stockman’s warning very seriously because he is the man former President… Continue reading David Stockman Pulls No Punches
None Today
The Wall Street Journal – U.S. Adds 74,000 Jobs as Hiring Slows Sharply Unemployment Falls to 6.7% Because of People Leaving Workforce U.S. job growth slowed sharply in December, closing out the year on a surprisingly weak note and potentially complicating the Federal Reserve’s plan for winding down its bond-buying program. U.S. payrolls rose by… Continue reading Employment In Pictures
The Wall Street Journal – Alcoa Reports Steep Loss on Impairment Charge Aluminum Maker Sees Global Industry Demand Rising This Year at Same Pace as 2013 Alcoa Inc. AA -0.52% swung to a steep fourth-quarter loss as the aluminum maker recorded a $1.72 billion impairment charge tied to two acquisitions made over a decade ago.… Continue reading Earnings Season Stumbles On The Starting Line
The Financial Times – Eurozone risks trying on mood of confidence Until very recently it would have been seen as a smug if not rather overconfident prediction. Standing in the epicentre of Europe’s four-year-old economic crisis, José Manuel Barroso, the European Commission president, declared on Wednesday that 2014 would be the year the eurozone finally… Continue reading Is Europe Fixed?
The Economist – Securitisation: It’s back Once a cause of the financial world’s problems, securitisation is now part of the solution GIVEN their role in the 2008 meltdown, and their subsequent branding as toxic sludge, it is not surprising that “securitised” financial products have had a quiet few years. Yet the transformation of mortgages, credit-card… Continue reading The Return Of Securitization
The Economist – The economy: Is this the year growth takes off? As Janet Yellen prepares to take over at the Fed, the omens are good It may have begun sooner. Booming exports and investment in business equipment suggest that economic growth may have topped 3% (annualised) in the fourth quarter. If so, then GDP… Continue reading Is The Economy About To Take Off?