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
<Click on chart for larger image> The Wall Street Journal – For Food, It’s the Bad and the Ugly Rising food prices, the inevitable consequence of the drought that has stricken much of the U.S., shouldn’t pose much of a threat to the economy. But they could give plenty of companies, and the Federal Reserve,… Continue reading Food Prices
Business Insider – Maria Bartiromo And Barney Frank Were Just At Each Other’s Throats For A Solid Ten Minutes We’ve been looking forward to this all day. Congressman Barney Frank (D-MA) was just a guest on CNBC’s Closing Bell with Maria Bartiromo, and quite frankly, the interview went from zero to ugly in less than… Continue reading Barney Frank vs CNBC
The Financial Times – Investors seek action beyond ECB hints Mario Draghi didn’t quite say that he was ready to restart the European Central Bank’s government bond-buying programme. But as far as markets were concerned, he might as well have. After a turbulent week that saw Spanish bond yields hit record highs of more than… Continue reading Investors Look For More
CNBC – Low Interest Rates Are Not Enough: El-Erian Welcome to what could be called “GGIRC,” the great global interest rate convergence – whereby interest rates steadily converge to zero in many countries around the world, both advanced (other than the crisis European economies) and emerging (other than the persistent financial basket cases). In theory… Continue reading El-Erian Discusses Interest Rates
The Financial Times – US bank bonds defy rating downgrades US bank debt is enjoying a wave of investor popularity despite the rating agency downgrades and lacklustre earnings reports afflicting the sector. Average yields for US bank paper are near record lows while the sector has outperformed the broader market this year. Boosting the banks… Continue reading U.S. Bank Debt
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The Financial Times – Effectiveness of short-selling bans in doubt Suffering “exceptional market conditions” and “extreme volatility”? Then, slap a ban on short-selling stocks. That has been the response of market regulators in Spain and Italy this week, re-introducing the ban lifted less than six months ago after several days of equities turmoil. Spain’s Comisión… Continue reading Short Selling Bans Don’t Work
<Click on chart for larger image> The Telegraph – The euro is “irreversible” and not in danger, says Draghi The euro is “irreversible” and the beleaguered currency union is not in danger of collapsing, according to European Central Bank President Mario Draghi, who also argued that eurozone nations will eventually be bound even closer together.… Continue reading The Amazing Irreversible Euro
<Click on chart for larger image> MarketBeat (WSJ Blog) – The U.S. Debt Load: Big and Cheap The U.S. debt overhang gets a lot of attention. And well it should, at roughly $15.88 trillion, the total public debt is bigger than the entire 2011 output of the economy. GDP was $15.094 trillion in 2011. (Although… Continue reading Government Debt To GDP
The Wall Street Journal – Loan, Deposit Data Underline Euro-Zone Split Bank deposit and loan data released Thursday underlined a deepening gulf between the euro-zone’s flagging periphery and its robust core in June as the region’s debt crisis worsened. Lending to households and companies fell 0.6% on the month in Greece, 0.5% in Ireland and… Continue reading Deposits Continue To Flee EU Periphery
Real Time Economics (WSJ Blog) – IMF Paper Warns Against Letting Inflation Target Rise One big debate facing the Federal Reserve is whether the central bank should allow inflation to rise to help bring down unemployment and spur economic growth. A working paper released by the International Monetary Fund on Wednesday weighed in: it’s probably… Continue reading The Problem With Raising The FOMC’s Inflation Target