As Senator Everett Dirksen famously said, “A billion here, a billion there, and pretty soon you are talking real money.” Today, the Fed provided Brazil, South Korea, Mexico, and Singapore with dollar swap lines of $30 billion each (hat tip readers Robertm, Dwight). From the Fed’s press release: Today, the Federal Reserve, the Banco Central […]
Read more...Bloomberg gives today’s sighting on money market conditions. Rates continue to improve but remain at elevated levels: Money-market rates in London dropped as cash injections by central banks and the prospect of deeper reductions in borrowing costs worldwide showed signs of revitalizing confidence in lending. The London interbank offered rate, or Libor, that banks charge […]
Read more...Hold the caviar darling Times Online Tennis call ‘brain bias’ found BBC World is facing a natural resources crisis worse than financial crunch Guardian ‘Digital Dark Age’ may doom some data University of Illinois News Appeals Courts Pushed to Right by Bush Choices New York Times Volkswagen Overtakes Exxon as Most Valuable Company Bloomberg Repossessions […]
Read more...This informative discussion that sheds further light on the stresses created by credit default swap settlements comes in the current issue of the Institutional Risk Analytics weekly, “In the Fog of Volatility, the Notional Becomes Payable“: Another example of the ongoing discontinuity in the markets comes in the linkage between the unwind of credit default […]
Read more...This Bloomberg article treats as a news item the fact that the Treasury is focusing its equity infusion efforts on strong banks, leaving the rest to find their own exit strategy. But this approach is not surprise; in fact, it is exactly what Treasury said it would do in a conference call to analysts exactly […]
Read more...Over the last few weeks, and accelerating late last week and early this week, it looked as if a full bore run on emerging markets was in progress. Now with the yen taking its biggest dive in two decades and carry trade unwinds a temporary thing of the past, emerging market and currencies are staging […]
Read more...Consumers are in a newly austere mood, and those who have lived beyond or at the edge of their means may be forced to retrench whether they want to or not. The New York Times reports that credit card issuers are cutting back on their lines of credit and special offers. Since debt-fueled consumer spending […]
Read more...US equity markers were already having a very good day, even by the standards of recent high market volatility, where big snapbacks have become normal after sharps declines. But the very good day turned into a stunner after the announcement today of record commercial paper sales yesterday. The Dow rose 890 points, with a near […]
Read more...I’ve kept seeing mention of a possible 75 basis point cut by the Fed. As much as some traders seem to be lobbying for it, your humble blogger would regard Fed setting its policy rate at that level as entering the famed ZIRP (zero interest rate policy) land that has played a big part in […]
Read more...In a bit of synchronicity, it seems that some mainstream commentators are starting to to take interest in a topic we’ve commented on in recent weeks, namely, how the difficulty in getting letters of credit is playing a significant role in the contraction in international trade (see our related post earlier today). John Dizard in […]
Read more...While none of the changes in interest rates were dramatic, and both interbank rates and stress levels remain elevated, improvement continues and all the metrics moved in the right direction. From Bloomberg: Money-market rates in London declined as cash injections by European central banks showed signs of easing the paralysis among lenders. The London interbank […]
Read more...Arctic ice thickness ‘plummets’ BBC Seven of the greatest scientific hoaxes New Scientist The New Infidelity New York Times Insight: Volatility returns with a vengeance Gillian Tett, Financial Times Worse this Time Michael Panzner Free at last: female slave who dared to take Niger to court Times Online Some Russia/China sightings from reader Chris: China […]
Read more...I somehow managed to fail to connect the dots on this one. When Morgan Stanley and Goldman, the far and away two biggest prime brokers (as in lenders to hedge funds) became banks, tougher regulatory requirements forced them to curtail hedge fund lending significantly. To give you an idea of the concentration in this business, […]
Read more...Today the Financial Times has a comment penned by Morgan Stanley’s Asia chief Stephen Roach, “Add ‘financial stability’ to the Fed’s mandate.” A regulatory backlash is under way as the US body politic comes to grips with the financial crisis. Wall Street – or what is left of it – is first in the line […]
Read more...One of our pet themes in recent weeks is that the fall in trade traffic, indicated and possibly overstated by a dramatic fall in the Baltic Dry Index, is due at least in part to difficulties in arranging and getting other banks to accept buyers’ letters of credit. For those new to this topic, international […]
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