The Wall Street Journal – Next Stop for 10-Year Treasurys: 1.25% Yield? U.S. Treasurys have never carried values as lofty as they do now. Yet more gains could be in the works as investors have learned to never underestimate the power of fear-driven buying. That is why a once-unthinkable 1.25% yield on 10-year Treasurys is… Continue reading A Rare Bullish Word On Treasuries
The New York Times – The Bond Market Discovers a New Leading Man RECESSIONS, crackups, bailouts — these are profitable times for Mohamed A. El-Erian. Mr. El-Erian is the crown prince of the multitrillion-dollar global bond market, the figurative heir of its long-reigning king, William H. Gross of the mighty Pacific Investment Management Company, known… Continue reading El-Erian’s New Normal
The Wall Street Journal – Bank Breakups: Not So Fast Long before Sanford Weill suggested last week that big banks should split up, Bank of America Corp. BAC +1.92%executives and directors considered the idea and then decided against it, said people close to the nation’s second-biggest bank by assets. While the Charlotte, N.C., company’s exploration… Continue reading Banks: Breaking Up Is Hard To Do
The Financial Times – HSBC sets aside $2bn to cover fines HSBC has again apologised for its failure to prevent money laundering, as it took a $700m charge to pre-empt the cost of US regulatory fines over the issue, pushing underlying profits down 3 per cent for the six months to the end of June.… Continue reading Banksters Reserving For Fines
The Wall Street Journal – JOHN H. COCHRANE: Myths and Facts About the Gold Standard No monetary system can absolve a nation of its fiscal sins. While many people believe the United States should adopt a gold standard to guard against inflation or deflation, and stabilize the economy, there are several reasons why this reform… Continue reading The Gold Standard
The Financial Times – ECB ‘ready to do whatever it takes’ The European Central Bank’s mandate allows it to fight excessive borrowing costs for eurozone countries, Mario Draghi, its president, said on Thursday, sparking a market rally amid hopes the bank would intervene to buy sovereign bonds. The euro strengthened and the bond prices of… Continue reading ECB Is Ready To Do ‘What Ever It Takes’
The Euro Crisis – Spanish panic THINGS are rapidly getting worse in Spain. Bond yields have risen to over 7.5% today, on the back of a shaky government debt auction last Thursday, and the failure of one of its regions (Valencia) that now needs help from Madrid. In line with this bad news on the… Continue reading Spain
The Financial Times – My thwarted attempt to tell of Libor shenanigans There have been two distinct motivations for banks to misreport Libor rates. One motivation is discussed above: to directly increase profits. The other motivation arose during the 2008 financial crisis: to mask liquidity problems. Libor misreporting has been going on for decades. Why… Continue reading More On LIBOR
<Click on chart for larger image> Real Time Economics (WSJ Blog) – U.S. Probably Won’t Have to Raise Debt Ceiling This Year A senior Treasury Department official Thursday said Congress probably won’t have to raise the country’s debt limit this year, giving lawmakers some breathing room to hash out a solution after the upcoming election.… Continue reading Why Deal With Problems Today That Can Be Pushed Off Until Tomorrow?
The Wall Street Journal – Bundesbank Maintains Opposition to ECB Bond Buying Germany’s central bank remains opposed to further government bond purchases by the European Central Bank, but isn’t against using the euro-zone’s temporary rescue fund doing so to drive down soaring sovereign borrowing costs, a Bundesbank spokesman said Friday. “The Bundesbank hasn’t changed its… Continue reading Germany Remains Opposed To More Government Bond Purchases By The ECB
The Economist – The new world deserts the old BANK runs don’t always involve small depositors queuing round the block. As we saw in 2008, institutions can withdraw their money with devastating effect.US money market funds are exiting the euro zone in what can only be described as a stampede. According to Fitch, the ratings… Continue reading Money Market Exposure To Europe Drops