Wednesday, April 26, 2017

Tag: ECB

Swamp or no swamp, Goldman swims on

The investment bank’s network reaches the White House, again. Consider just this very partial list: Henry Fowler, Robert Rubin, and Hank Paulson, former US Treasury secretaries. Mark Carney, governor of the Bank of England. Mario Draghi, European Central Bank president. Malcolm Turnbull, prime minister of Australia. Bill Dudley, president of...

Saudis, China Dump Treasuries; Foreign Central Banks Liquidate A Record $375 Billion In US...

One month ago, when we last looked at the Fed's update of Treasuries held in custody, we noted something troubling: the number had dropped sharply, declining by over $22 billion in one week, one of the the biggest weekly declines since January 2015, pushing the total amount of custodial...

Global Trumpism: Why Trump’s Victory Was 30 Years in the Making and Why It...

Trump's victory was predictable, and was predicted, but not by looking at polls. Polling has taken a beating recently having failed to predict the victory of David Cameron's Conservative Party in the British general elections, then Brexit, and now the election of Donald Trump. One can argue about what’s...

Euro house of cards to collapse, warns ECB prophet

The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned. "One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB's first chief economist and a towering figure in...

IMF Officially Gives China A Seat at the Adult Table of World Economies

China has the world’s second-largest economy, but its currency, the renminbi, has long been kept out of the International Monetary Fund’s elite club of the world’s strongest national tenders. That changed this weekend. After years of liberalization reforms, the IMF announced Saturday the renminbi would join the bank’s group of...

According To JPMorgan, This Is The Biggest Risk Facing Deutsche Bank At This Point

Deutsche Bank uncertainties were added to concerns about BoJ tapering spooking global equity markets over the past week. Widespread press reports about Deutsche Bank clients and counterparties reducing their financial exposure to the bank, including their derivatives exposures, alarmed market participants. At the same time, JPMorgan warns, the amount borrowed...

The Run Begins: Deutsche Bank Hedge Fund Clients Withdraw Excess Cash

Deutsche Bank concerns just went to '11' as Bloomberg reports a number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank. While the vast...

ECB Board Member Admits Central Bank’s Monetary Policy Risks Tearing Up Social Fabric

Time to toss yet another "conspiracy theory" on the composite heap of "theories that became fact." A recurring theme we have pounded the table on over the past nearly 8 years is that central bank policy has been the primary driver leading to not only a record wealth and...

Get ready for the mother of all stock market corrections once central banks cease...

Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years. For how much longer can stock markets keep delivering? Is there another...

Foreigners turn away from Treasuries just when needed most: Analyst

The biggest buyers of U.S. Treasuries have turned fickle on U.S. debt, just when they may be needed most. Peter Boockvar, chief market analyst at The Lindsey Group, points out that for a fourth month in a row, foreigners were net sellers of U.S. notes and bonds, dumping $13.1 billion...

The Coming Bond Bubble Collapse

In this week’s podcast, Michael Pento, fund manager and author of The Coming Bond Bubble Collapse, explains how the United States is fast approaching the end stage of the biggest asset bubble in history. He describes how the bursting of this bubble will cause a massive interest rate shock that...

The Weird New Normal of Negative Interest Rates

The United States, Germany, and other economic powerhouses haven't learned the dire lessons of Japan's lost decades. In 1998, when I was a reporter in Tokyo, an event happened that economists once thought impossible. Japan was at the height of its banking crisis, and as panic swelled, short-term market interest...

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 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...

Euro zone monthly economic sentiment falls more than expected

Economic sentiment in the 19 countries sharing the euro fell in August to its lowest level since March, a further indication that morale is weakening after Britain voted to leave the European Union. The European Commission's euro zone Economic Sentiment Indicator (ESI) fell to 103.5 in August from 104.5 in...

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 —...

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...

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...

IMF admits disastrous love affair with the euro and apologises for the immolation of...

The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory. This is the lacerating verdict of the IMF's...

Global QE running at record $180 bln per month, and rising

Eight years after the global financial crisis and years after the U.S. and British central banks stopped their quantitative easing bond-buying programmes, the amount of QE stimulus being pumped into the world financial system has never been higher. The European Central Bank and Bank of Japan are buying around $180...

How China’s Currency Manipulation Enhances the Global Role of the U.S. Dollar

But it's not quite that simple. In fact, Beijing benefits from the dollar’s dominance. On April 16, Zhou Xiaochuan, the governor of China’s central bank, the People’s Bank of China, once again set off alarm bells during a speech at the International Monetary Fund (IMF). “Starting from this April,” he...

Quantitative easing useful when all else fails, says Fed official Loretta Mester

A top official from the US Federal Reserve says quantitative easing has "proven useful", but the likely path of US monetary policy is still for interest rate rises. Talk of further unconventional monetary policies globally has increased as Japan reaches the limit of what negative interest rates and quantitative easing...

Why Gold Is Now In A New Bull Market

Investors’ interest in gold peaked in September 2011, when it was generally agreed upon that the endless rounds of quantitative easing policies by the world’s central banks will result in rising inflationary pressures, while concerns over a potential Euro Zone break-up ran rampant, as government finances in countries such...

Italy’s Banks On Death Bed. Are Bail-Ins Coming?

Italy's third largest bank by assets, Banca Monte dei Paschi di Siena SpA is on the death bead. It’s been there since mid-2014. Italian banks in general have €200 billion in non-performing loans. They have another pile of troubled loans that are late just some of the time. To address the...

Forget December. Forget Next Year. The Fed’s Done Hiking Until 2018

Circle Jan. 31, 2018, on the calendar. That’s the soonest the Federal Reserve hikes next. At least if money market derivatives are to be believed. Traders, who have consistently been better at projecting the path of interest rates than the Fed itself, are now pricing in a greater probability that policy...

The monetary bubble to end all bubbles is coming

Central banks continue to create new money through quantitative easing. But should they? That’s the question both Harvard economist Terry Burnham and economics correspondent Paul Solman explore in two separate pieces. Below, Terry Burnham warns against quantitative easing. You can read Paul’s take on the issue, “Why the Fed should...
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Alan Greenspan on Brexit, U.S. Economy, and Inflation

Former Federal Reserve Chairman Alan Greenspan discusses fallout the U.K.'s Brexit referendum, U.S. economic growth, wage and economic stagnation, central banks, low productivity, and his call for inflation in the U.S. economy. He speaks with Bloomberg's Michael McKee and Tom Keene on Bloomberg. U.K. policy makers miscalculated and made a...

U.S. Stocks Fall With Global Shares, Pound on Brexit; Gold Gains

The aftershocks of the U.K.’s vote to leave the European Union reverberated across financial markets after a weekend of political turmoil, with the pound extending its record selloff and European equities dropping to levels last seen in February. The S&P 500 dropped 1.8 percent to the lowest since mid-March, while...

Brexit wipes $2tn off markets as Moody’s lowers UK credit rating outlook

Amid concerns that the EU referendum result risks sparking fresh financial crisis, Bank of England governor says it is ready to do whatever is needed. The ratings agency Moody's has lowered the outlook for the UK's credit rating from stable to negative amid what it said would prove a prolonged...

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