CNBC – Italy, Spain See Borrowing Costs Rise at Auctions Spanish and Italian sovereign debt yields climbed Monday, as the countries carried out bond auctions, though Italy fared better between the two nations. Italy’s borrowing costs edged up at a bond sale on Monday, the first by a weaker euro zone state since elections in… Continue reading Italian And Spanish Yields Soar
The Wall Street Journal – Vote Sparks Doubts About Merkel Party’s Drubbing in Germany’s Biggest State Suggests Chancellor Is More Vulnerable Than Thought Chancellor Angela Merkel’s conservatives were battered in a closely watched election in Germany’s largest state on Sunday, igniting doubts that her government can stay in power after next year’s general election despite… Continue reading Merkel Loses Badly, Is Her Time Winding Down?
The Financial Times – Lex: Value at risk: time for more rigour That whooshing noise in the background is the sound of received wisdom crashing to the ground. One of the consequences of last week’s admission by JPMorgan that it had lost $2bn on credit derivatives trading is that it may spell the end of… Continue reading Does VaR work?
The Associated Press – California facing higher $16 billion shortfall California’s budget deficit has swelled to a projected $16 billion — much larger than had been predicted just months ago — and will force severe cuts to schools and public safety if voters fail to approve tax increases in November, Gov. Jerry Brown said Saturday.… Continue reading California’s Deficit Larger Than Thought
CNN/Money – Shelia Bair: Why it’s time for higher interest rates Progressives, led by Paul Krugman, believe that we can fix our economic woes with more consumer debt and higher inflation. The reality is that near zero interest rates encourage speculation, discourage savings, weaken pension funds, and put millions of baby boomers at risk. ome… Continue reading Shelia Bair Speaks Her Mind
The Financial Times – Global bank bond issuance falls Global bank bond issuance has fallen to its lowest level in seven years, underscoring the impact the eurozone crisis and tougher regulatory environment is having on the way banks operate. Banks have raised just $523bn in the bond markets so far this year, the lowest year-to-date… Continue reading Bank Bond Issuance Falls
Dow Jones – Central-Bank Actions Prevent Panic From Setting In “Every bank is safer than it was prior to 2008 because they have a government printing press at their disposal,” said Howard Simons, a strategist at Bianco Research in Chicago. Since the credit crunch of 2008, the Federal Reserve has cut rates to zero, flooded… Continue reading Is The Rationality Put Failing?
The Telegraph (UK) – World edges closer to deflationary slump as money contracts in China All key indicators of China’s money supply are flashing warning signs. The broader measures have slumped to stagnation levels not seen since the late 1990s Narrow M1 data for April is the weakest since modern records began. Real M1 deposits… Continue reading China’s Money Contracts
The Economist – Systemic risk: Counterparty controversy A battle is raging over the sort of financial ties that can crash the world IT HAS taken almost two years, but the debate over the restructuring of American finance has at last reached the issue at the heart of the industry’s reregulation: systemic risk. The idea is… Continue reading Systemic Risk
The Wall Street Journal – J.P. Morgan’s $2 Billion Blunder Bank Admits Losses on Massive Trading Bet Gone Wrong; Dimon’s Mea Culpa A massive trading bet boomeranged on J.P. Morgan Chase & Co., leaving the bank with at least $2 billion in trading losses and its chief executive, James Dimon, with a rare black eye… Continue reading Understanding J.P. Morgan’s Loss, And Why More Might Be Coming
Factset – Earnings Insight: May 4, 2012 Of the 103 companies that reported earnings during the week, only 60 (or 58%) reported actual EPS above the mean EPS estimate. On the other hand, 42 companies (or 41%) reported actual EPS below the mean EPS estimate (one company reported in-line results). Of the 42 companies that… Continue reading After A Great Start, Earnings Fizzle