The Financial Times – JPMorgan unit has $100bn of risky bonds The unit at the centre of JPMorgan Chase’s $2bn trading loss has built up positions totalling more than $100bn in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008. These holdings are in addition to… Continue reading More On J.P. Morgan’s Losses
The Telegraph (UK) – Ambrose Evans-Pritchard: Global banks see market rally on Greek exit Major global banks are advising clients to prepare for a stock market rally and a resurgence of the euro if Greece is forced out of monetary union, betting that world authorites will flood the international system with liquidity Bank of America… Continue reading Grexit
Comment Currently the highest rated Spanish bank is just A3, the 7th highest rating. CNBC – Spanish Banks Downgraded as Borrowing Costs Soar Spain’s borrowing costs shot up at a bond auction on Thursday and its troubled banks suffered a double blow, with shares in part-nationalized Bankia diving and 16 lenders — including the euro… Continue reading Spanish Banks
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Bloomberg.com – Junk-Debt ETFs Set Markets ’Abuzz’ After Record Trades The biggest trades on record in shares of two exchange-traded funds that invest in junk debt are attracting attention to the four-year-old market that allows anyone from banks to retirees fast and discreet access to speculative-grade bonds and loans. The transactions were completed hours before… Continue reading A Big Junk Bond Trade
The Guardian (UK) – Eurozone banks nearly collapsed, says ECB director Benoît Coeuré says conditions were very dangerous in autumn of 2011 and banks faced severe difficulties to fund themselves A senior executive at the European Central Bank has admitted eurozone banks were on the brink of collapse last autumn. In an interview with the… Continue reading Eurozone Banks In Trouble?
The Financial Times – Charles Plosser: When a monetary solution is a road to perdition History teaches us that unless governments are constrained institutionally or constitutionally, they often resort to the printing press to avoid making tough fiscal decisions. But history also teaches us that this can create high inflation and, in the extreme, hyperinflation.… Continue reading Is Inflation Coming?
CNBC – Forget Greece, China Biggest Risk to Global Economy: Faber Forget Greece, which is an “insignificant” economy, it is China that poses the biggest risk to the global economy, Marc Faber the editor and publisher of the Gloom, Boom and Doom report told CNBC on Friday. “I think the biggest risk is actually China… Continue reading China
None Today
Today at 9 AM CT (10:00 AM ET, 7:00 AM PT, and 15:00 BST) we will host a conference call titled “Europe, J.P. Morgan, and The Economy.” The deteriorating situation in Europe is reminiscent of 2011. J.P. Morgan’s trading losses are reminiscent of 2008. The slowing economy in the U.S. is reminiscent of both periods.… Continue reading Conference Call: Europe, J.P. Morgan, and The Economy
The New York Times – JPMorgan’s Trading Loss Is Said to Rise at Least 50% The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the… Continue reading JP Morgan’s Losses Grow
Bloomberg.com – Bond Market May Not Warn When Debt Crisis Strikes One by one, European nations are letting their voices be heard, tossing out the party in power and voting in those who, in some cases, have a more radical agenda or, in others, are just willing to say “no” to the status quo. A… Continue reading Growth vs. Austerity