Monday, September 24, 2018

Bank of Japan’s New Unease With Negative Rates

Gov. Kuroda’s rhetoric takes an important turn as he recognize’s negative rates’ baleful effect on banks. The Bank of Japan's negative interest rate policy is adding a new ingredient: a dash of remorse. Two weeks before a much-anticipated monetary-policy meeting, BOJ Governor Haruhiko Kuroda acknowledged that subzero policy rates have had...

The Fed may be preparing for the unthinkable – negative interest rates in America

Negative interest rates are spreading like a virus. Central banks in the Eurozone, Switzerland, Sweden, and Japan all have below-zero policy rates. “NIRP,” as economists call a negative interest rate policy, is a desperation move—but the only move those central banks have. The Federal Reserve hasn’t followed—yet. When the next...

South Korea’s Hard Line on Hanjin Shipping Signals New Attitude

South Korea's decision to withdraw support for its largest shipping company has sent shock waves through an ailing global industry. It also shows Seoul’s toughening stance when it comes to troubled firms. Hanjin Shipping Co.’s potential bankruptcy would be the largest container-shipping failure in history, dwarfing all previous carrier bankruptcies,...

Tens of millions of Indian workers strike in fight for higher wages

State banks and power stations shut and public transport halted in some states as public sector workers take industrial action. A nationwide strike by tens of millions of Indian public sector workers has been hailed by union officials as “the world’s largest ever” industrial action, and cost the economy up...

Shipping giant’s bankruptcy could have terrifying ripple effects on the economy

LOS ANGELES (AP) — The bankruptcy of the Hanjin shipping line has thrown ports and retailers around the world into confusion, with giant container ships marooned and merchants worrying whether tons of goods will reach their shelves. The South Korean giant filed for bankruptcy protection on Wednesday and stopped accepting...

Retailers Seek U.S. Help With Shipping Crisis

Rates soar as Hanjin Shipping’s bankruptcy filing strands goods, causes confusion at ports. U.S. retailers, bracing for a blow as they stock up for the crucial holiday sales season, asked the government to step in and help resolve a growing crisis caused by the near-collapse of South Korea’s Hanjin Shipping...

Hanjin Shipping Upsets Global Trade After Seeking Protection From Creditors

South Korean container carrier stops accepting new cargo as U.S. ports block its ships. South Korea’s Hanjin Shipping Co., one of the world’s largest shipping lines, stopped taking new cargo and U.S. ports began turning away its ships after it filed for bankruptcy protection on Wednesday. The move, coming at a...

The Federal Reserve is living in a fantasyland

The Fed has failed. Indeed, only the world-historical disaster engineered by the nincompoops at the European Central Bank has made America's central bank — the Federal Reserve — look remotely good lately. For eight straight years, under Republican and Democratic leadership, the Fed has behaved like nothing has changed since the...

A Call to Keep The Fed’s Balance Sheet

Using the balance sheet to promote stability and scrapping the zero lower bound are among the fresh ideas. Another Jackson Hole economic symposium has come and gone. Fed Up, a group that's pushing for lower rates and asking the Fed to pay more attention to minorities and workers, is thrilled...

Gold is doing something it’s only done twice in the past decade

Gold may be worth more than what traders have decided is the spot price. There's a correlation between gold price changes and the rate at which central banks bought assets to expand their balance sheets, according to Deutsche Bank's Michael Hsueh and Grant Sporre. And the pace of balance-sheet expansion —...

The new TTIP? Meet TISA, the secret privatisation pact that poses a threat to...

Government insists 'public services are under no threat whatsoever from this deal'. An international trade deal being negotiated in secret is a “turbo-charged privatisation pact” that poses a threat to democratic sovereignty and “the very concept of public services”, campaigners have warned. But this is not TTIP – the international agreement it...

The Federal Reserve’s moral imperative

The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank? At the Fed's annual Jackson Hole conference last week, an assortment of community organizers, activists, labor organizations, and economists showed up to push America's most important financial institution towards putting the concerns...

Yen Debate Is Stirred Up by Fed’s Hawkish Talk at Jackson Hole

Japanese currency has slid since gathering of Fed bankers last week, but major investors are still betting on yen to rise. Japanese policy makers eager to see the yen weaken may be thankful for the latest bout of hawkishness on U.S. interest rates from top Federal Reserve officials. For many market...

The Fed has yet to take monetary reform seriously

LARRY SUMMERS is right; this year's Fed symposium in Jackson Hole was triply disappointing. In the weeks before the gathering, members of the Federal Open Market Committee (FOMC) publicly discussed their worries that the current monetary framework might leave the Fed unable to deal adequately with future slowdowns. They...

Years of Fed Missteps Fueled Disillusion With the Economy and Washington

Once-revered central bank failed to foresee the crisis and has struggled in its aftermath, fostering the rise of populism and distrust of institutions. In the past decade Federal Reserve officials have been flummoxed by a housing bubble that cratered the financial system, a long stretch of slow growth they failed...

Dividends Are What Matter Now

Many investors turn to high-yielding shares as interest rates slide, but risk could increase. Dividends are playing an unusually large role in the stock market’s run to record highs, adding to investors’ concerns about stretched valuations and soft corporate earnings. The five-year rolling correlation between S&P 500 companies’ dividend yield and...

EpiPen Uproar Highlights Company’s Family Ties to Congress

The CEO of a former Fortune 500 company, who is also the daughter of a U.S. senator, is under fire for jacking up the rates of life-saving anti-allergy device known as the EpiPen. Heather Bresch, whose father is U.S. Sen. Joe Manchin, D-W.Va., became president of Mylan Pharmaceutical in 2009...

It’s Gone – Why Foreign Demand For US Treasuries Has Disappeared

Last week's TIC data confirmed something the Fed's Treasury custody account has indicated for the past several months: foreign demand for US government bonds has not only tumbled, but there has been aggressive selling. So much so, in fact, that in the past 12 months foreign central banks have sold...

Gold’s Rally Means Old Rings Are Headed to the Melting Pot

The surprising rebound in gold prices this year has given new life to unwanted jewelry, coins and trinkets -- in the melting pot. More than a third of the world’s bullion supply usually comes from recycled metal, but purchases at pawn shops and cash-for-gold companies had slowed during a three-year slump...

Fed knows policy doesn’t work anymore but it won’t admit it: Strategist

The policies of global central banks received another bashing Thursday with a London-based investment strategist launching a stinging analysis of the U.S. Federal Reserve. Minutes released late Wednesday from the Fed's latest policy meeting showed some voting Federal Reserve policymakers expected a further U.S. interest rate increase will be required...

Lord Rothschild: This Is The Greatest Experiment In Monetary Policy In The History Of...

Two months ago, the bond manager of what was once the world's biggest bond fund had a dire prediction about how "all of this" will end (spoiler: not well). Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that...

In Surprising Twist, Global Central Banks Dump A Record $335 Billion In US Debt...

On Sunday, when looking at the latest update of the Fed's custody holdings of Treasuries, we noted something troubling: the number dropped sharply, declining by over $17 billion, bringing the total to $2.871 trillion, the lowest amount of Treasuries held by foreigners at the Fed since 2012. We added that...

Gold Prices Will Rise with Peak Mining Exploration

Unlike re-printable fiat currency, gold is money because there is a finite amount of it. The Fed can’t produce more gold whenever it wants. For this reason, gold has functioned as a barter and wealth preservation system for thousands of years. But how much gold is left in the...

US Productivity Plunges For 3rd Quarter In A Row – Longest Losing Streak Since...

Following the Q2 GDP print, the slowing in aggregate weekly hours suggested a modest pickup QoQ in non-farm productivity, but it plunged 0.6% - dramatically missing the +0.4% exp in this preliminary Q2 report. This is the 3rd quarterly decline in a row - the first time that has...

The Last Known Gold Mine

Gold is one of the rarest elements in the world, making up roughly 0.003 parts per million of the earth's crust. (For some perspective, one part per million, when converted into time, is equivalent to one minute in two years. Gold is even rarer than that.) If we took...

Stock Buybacks Are Driving Companies Into Debt

The bond market should be concerned about stock buybacks, but not because of their bullish effect on share prices. Instead, bondholders should be anxious about where the cash to pay for them comes from. It isn’t widely appreciated that the money has been borrowed in the credit markets, and...

Bank of England shuts the door on a Fed rate hike this year

Any chance the Federal Reserve had of raising rates this year may have been quashed Thursday, with the impetus coming not from home but from the other side of the Atlantic. The Bank of England's decision to not only cut interest rates but to restart its money-printing program makes the...

Mystery Buyer Revealed: Swiss National Bank’s US Stock Holdings Rose 50% In First Half,...

In a month, quarter and year, in which many have scratched their heads trying to answer just who is buying stocks, as both retail and smart money investors have been aggressively selling... In the second quarter, the Swiss National Bank added $7.3 billion to its US equity portfolio, and according...

Europe’s Future Will Be Decided at a Quaint Renaissance Italian Bank

Italy's third largest bank needs a bailout. What happens next could mean a revolution in Rome – or in Brussels. Italy's Banca Monte dei Paschi di Siena would seem to be the archetype of a good, locally based, non-exploitative financial institution. The oldest bank in the world, with headquarters located...

China and Russia continues to buy into bullion

The strength of the U.S. dollar is boosting gold sales in China and Russia as the two countries bulk up their official reserves with bullion. Returns on European currencies have continued to creep lower, with the Euro causing particular concern for global investors. With weaker than expected economic data...

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