We have seen reports on various China-focused blogs and even in the US media that China is increasingly chafing over the US dominance in financial affairs, and is particularly unhappy about the role of the dollar. Consider this quote from an August New York Times article: Victor Shih, a specialist in Chinese central banking at […]
Read more...Ah, when you thought the news from equity markets was bad enough, we get a second helping on the interbank front. From Bloomberg: The cost of borrowing in dollars overnight in London rose as the increased likelihood of a global recession spurred banks to hoard cash even after policy makers pumped record amounts of the […]
Read more...I had warned readers against assuming that because we had a bounce in the equity markets, that life would soon return to normalcy (“It Isn’t Over Until the Fat Lady Sings“). But I didn’t expect a rout like this, particularly with no looming news trigger. The yen has gone to 91. The Nikkei was down […]
Read more...Note that the consensus (based on news reports, not a formal sampling) was for OPEC to cut 1 million barrels now, with another 1 million in the offing. OPEC announced a deeper immediate cut and left open the possibility of another reduction in December. From Bloomberg: The Organization of Petroleum Exporting Countries agreed to cut […]
Read more...In case you weren’t keeping tabs (the number and variety of handout-recipients grows with every passing day), AIG was first given a loan (really, akin to a maximum borrowing authorization) of $85 billion with much fanfare and high drama, which was later quietly increased by another $37.8 billion. In the last ten days, AIG has […]
Read more...Cardiac risk estimates differ for Christian and Muslim patients PhysOrg Australia plans electric vehicle network AFP Swap spreads turn negative Financial Times Fed Says Bear Stearns Portfolio Declines $2.7 Billion Bloomberg West Is in Talks on Credit to Aid Poorer Nations Note the IMF is planning to arrange dollar swap lines, a need Brad Setser […]
Read more...Regulators in Taiwan ordered insurers to limit their holdings of Freddie, Fannie, and Ginnie Mae paper. The stated reason was that they could not assess the credit risk and could not rely on published ratings. The explicit repudiation of rating agency ratings seems to be the first move of this type. and may be the […]
Read more...The Nikkei was down as low as 600 below the previous day’s close. It is now down a bit over 400 points. Other reports from the region via Bloomberg: Asian stocks fell for a third day after Sony Corp. slashed its earnings forecast and South Korea’s economic growth weakened, deepening concern a global slowdown is […]
Read more...Not only are customers reducing their food expenditures, but some food retailers believe that they are actually buying less food, not merely cheaper edibles. Observers believe that shoppers are being less wasteful. From the Independent: Food sales in Britain have fallen for the first time in more than 20 years, as customers tighten their belts. […]
Read more...Despite some calls that a commodities bottom is nigh (see Marc Faber, hat tip reader Megan), the Baltic Dry Index, a proxy for international shipping and international manufacturing, continues an alarming fall. While the BDI is known for false positives about trends in economic activity, the dramatic decline in BDi is partly the result of […]
Read more...Russia is dependent on oil exports for its new-found prosperity and does not appear ready to give it up. From CNN Money (hat tip reader Michael): Russia’s top energy official said Wednesday that the nation may set aside an oil reserve to influence global prices – but won’t cut output, news reports said. Deputy Prime […]
Read more...After the Fed, ECB,, Bank of England, and other central banks took unprecedented measures over the last month to restore liquidity and recapitalize banks, Nouriel Roubini sounded slightly less gloomy. He had deemed that the authorities has avoided a systemic financial meltdown, but a nasty, protracted recession was in the offing. It appears that Roubini […]
Read more...Not surprisingly, gloomy news on the housing front continues. Note that RealtyTrac data overstates the actual number of foreclosures, since it counts each court filing in the foreclosure process, and any foreclosure involves multiple filings. However, comparisons of activity over time are useful indicators. Note that changes in various states to draw out the foreclosure […]
Read more...Freak weather strikes Australia BBC Researchers say voters swayed by candidates who share their looks Stanford News Service $150,000 Wardrobe for Palin May Alter Tailor-Made Image New York Times Interview of Nassim Nicholas Taleb and Benoit Madelbrot PBS. Both of them are scared. Small businesses cry out for help as failures mount Times Online Amazon […]
Read more...In theory, moving credit default swaps from over the counter trading to exchange trading should reduce systemic risk. Exchanges fail far less often than individual institutions, and when they do, the damage has less propensity to propagate into a systemic event. As keen as the authorities are to get the big, opaque CDS market on […]
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