Market News
The Fed / FOMC
Current Voters:
Ben Bernanke
Betsy Duke
Kevin Warsh
William Dudley
Donald Kohn
Thomas Hoenig
Sandra Pianalto
Eric Rosengren
James Bullard
Daniel Tarullo
Sarah Booth Raskin
Janet Yellen
TBA
Ben Bernanke
Betsy Duke
Kevin Warsh
William Dudley
Donald Kohn
Thomas Hoenig
Sandra Pianalto
Eric Rosengren
James Bullard
Daniel Tarullo
Sarah Booth Raskin
Janet Yellen
TBA
September 21
The Federal Reserve Open Market Committee (FOMC) issued its statement indicating again that interest rates will remain low for an extended period of time and that it is ready to provide "additional accommodation" to support the recovery, such as applying proceeds of Treasury securities to reinvest into additional Treasury securities. There was no additional mention of quantitative easing (QE). The Fed left the door open by stating it is “prepared to provide additional accommodation if needed”. Hoenig dissented again, for the 6th time in a row.
Although the FOMC mentioned the economic improvement continuing, it indicated increasing concern with high unemployment and depressed housing. It also mentioned that "bank lending has continued to contract." The Fed expects the pace of recovery to be “modest in the near-term”. There was some change to inflation language. For the first time, it acknowledged that core inflation is “currently as levels somewhat below those the Committee judges most consistent with its mandate” and inflation is likely to “remain subdued”.
Treasurys rose sharply after the Fed's announcement, sending interest rates lower. The yield on the 10-year Treasury note fell sharply to 2.58% from 2.70% the day before, while its price jumped $1.03 to $100.34.
The Fed's statement, which came after a one-day meeting of its interest rate committee, had only a temporary effect on stocks. Hopes had been building that Tuesday would bring news of a specific new bond-purchasing program, and disappointment ensued when one didn't materialize.
There is a good chance the Fed will decide to add more debt to its books at the next meeting of its rate-setting committee on November 2nd. But another round of bond buying by the Fed may offer the economy little help. The last round of Fed purchases had the effect of lowering lending rates by a half a percentage point.
The Federal Reserve Open Market Committee (FOMC) issued its statement indicating again that interest rates will remain low for an extended period of time and that it is ready to provide "additional accommodation" to support the recovery, such as applying proceeds of Treasury securities to reinvest into additional Treasury securities. There was no additional mention of quantitative easing (QE). The Fed left the door open by stating it is “prepared to provide additional accommodation if needed”. Hoenig dissented again, for the 6th time in a row.
Although the FOMC mentioned the economic improvement continuing, it indicated increasing concern with high unemployment and depressed housing. It also mentioned that "bank lending has continued to contract." The Fed expects the pace of recovery to be “modest in the near-term”. There was some change to inflation language. For the first time, it acknowledged that core inflation is “currently as levels somewhat below those the Committee judges most consistent with its mandate” and inflation is likely to “remain subdued”.
Treasurys rose sharply after the Fed's announcement, sending interest rates lower. The yield on the 10-year Treasury note fell sharply to 2.58% from 2.70% the day before, while its price jumped $1.03 to $100.34.
The Fed's statement, which came after a one-day meeting of its interest rate committee, had only a temporary effect on stocks. Hopes had been building that Tuesday would bring news of a specific new bond-purchasing program, and disappointment ensued when one didn't materialize.
There is a good chance the Fed will decide to add more debt to its books at the next meeting of its rate-setting committee on November 2nd. But another round of bond buying by the Fed may offer the economy little help. The last round of Fed purchases had the effect of lowering lending rates by a half a percentage point.
A Secretive Banking Elite Rules Trading in Derivatives
By Louise Story
December 11 (NY Times)
On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.
The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.
To continue reading this article, click here.
December 11 (NY Times)
On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.
The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.
To continue reading this article, click here.
China's Dagong Downgrades US Sovereign Credit Rating
November 10 (Reuters)
The United States of America's local and foreign currency long-term sovereign credit rating was downgraded by the Dagong Global Credit Rating Co, Ltd on Tuesday to "A+" from "AA" to reflect what it called the country's deteriorating debt repayment capability and drastic decline of the government's intention of debt repayment. "The occurrence and development of the credit crisis in the United States resulted from the long-standing accumulation of contradictions in its economic system," Dagong said on its website.
To continue reading this article, click here.
The United States of America's local and foreign currency long-term sovereign credit rating was downgraded by the Dagong Global Credit Rating Co, Ltd on Tuesday to "A+" from "AA" to reflect what it called the country's deteriorating debt repayment capability and drastic decline of the government's intention of debt repayment. "The occurrence and development of the credit crisis in the United States resulted from the long-standing accumulation of contradictions in its economic system," Dagong said on its website.
To continue reading this article, click here.
Marked Fall in OTC Derivatives Volumes
By Aline van Duyn
November 16 (The Financial Times)
The over-the-counter derivatives markets have shrunk, with the value of outstanding contracts falling 4 per cent to stand at $583 trillion in June, compared with six months earlier, the Bank of International Settlements said.
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November 16 (The Financial Times)
The over-the-counter derivatives markets have shrunk, with the value of outstanding contracts falling 4 per cent to stand at $583 trillion in June, compared with six months earlier, the Bank of International Settlements said.
To continue reading this article, click here.
Yield Hunt Leads to Currency Debt
Add The Risk of Foreign-Exchange Fluctuations to the List of Risks Bondholders Face
By Alex Frangos and Mark Gongloff
October 5 (Wall Street Journal)
The global rush for yield is driving investors to buy emerging market debt issued in local currency, adding foreign-exchange fluctuations to the list of risks bondholders face.
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SEC Goes After Arcane Bets
By Sarah N. Lynch and Jessica Holzer
October 14 (Wall Street Journal)
U.S. securities regulators, in their first move toward regulating the $615 trillion swaps market, unveiled a proposal Wednesday to rein in conflicts of interest in derivatives clearing and trading venues. The proposal by the Securities and Exchange Commission aims to prevent companies like big banks from wielding too much voting power in clearing and trading venues for security-based swap products such as credit-default swaps.
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October 14 (Wall Street Journal)
U.S. securities regulators, in their first move toward regulating the $615 trillion swaps market, unveiled a proposal Wednesday to rein in conflicts of interest in derivatives clearing and trading venues. The proposal by the Securities and Exchange Commission aims to prevent companies like big banks from wielding too much voting power in clearing and trading venues for security-based swap products such as credit-default swaps.
To continue reading this article, click here.
Banks Pile Into Safer Bets
Some Banks Launch Services to Help Clients Navigate Changes in Derivatives
By Carrick Mollenkamp, Liz Rappaport, and Aaron Lucchetti
October 5 (Wall Street Journal)
Tighter regulatory requirements are compelling giant investment banks in the U.S. and Europe to tone down their risk-taking and shift to more staid strategies. Now hot on Wall Street: trading securities for clients, processing trades, exchanging currency, managing assets and advising clients on deals and financing.
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BofA Forms Clearing Services Group for Derivatives Market
By David Mildenberg
September 23 (Bloomberg)
Bank of America Corp., the largest U.S. bank, formed a futures and derivatives clearing services group in anticipation of greater demand in the $615 trillion over-the-counter derivatives market.
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September 23 (Bloomberg)
Bank of America Corp., the largest U.S. bank, formed a futures and derivatives clearing services group in anticipation of greater demand in the $615 trillion over-the-counter derivatives market.
To continue reading this article, click here.
JPMorgan Said to Close Prop Trading Desk to Meet Volcker Rule
By Dawn Kopecki and Chanyaporn Chanjaroen
September 1 (Bloomberg)
JPMorgan Chase & Co. told traders who bet on commodities for the firm’s account that their unit will be closed as the company, the second-biggest U.S. bank by assets, starts to shut down all proprietary trading, according to a person briefed on the matter.
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September 1 (Bloomberg)
JPMorgan Chase & Co. told traders who bet on commodities for the firm’s account that their unit will be closed as the company, the second-biggest U.S. bank by assets, starts to shut down all proprietary trading, according to a person briefed on the matter.
To continue reading this article, click here.
TIPS Five-Year Yields Turn Negative on Fed Inflation Concern
By Daniel Kruger
September 22 (Bloomberg)
Yields on five-year Treasury Inflation Protected Securities turned negative after the Federal Reserve said inflation is running below levels that reflect a healthy economy.
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September 22 (Bloomberg)
Yields on five-year Treasury Inflation Protected Securities turned negative after the Federal Reserve said inflation is running below levels that reflect a healthy economy.
To continue reading this article, click here.
Harrisburg Defaults as Localities Struggle
By Romy Varghese
September 1 (The Wall Street Journal)
Pennsylvania's capital of Harrisburg said it will skip a $3.29 million municipal-bond payment due in two weeks, marking the second-largest general-obligation municipal-bond default this year.
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September 1 (The Wall Street Journal)
Pennsylvania's capital of Harrisburg said it will skip a $3.29 million municipal-bond payment due in two weeks, marking the second-largest general-obligation municipal-bond default this year.
To continue reading this article, click here.
Deutsche Bank Ordered to Pay $980,000 in Swap Suit
By Karin Matussek
October 27 (Bloomberg)
Deutsche Bank AG, Germany’s biggest bank, was ordered by an appeals court to pay 710,000 euros ($980,000) in damages over swaps it sold to municipalities.
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October 27 (Bloomberg)
Deutsche Bank AG, Germany’s biggest bank, was ordered by an appeals court to pay 710,000 euros ($980,000) in damages over swaps it sold to municipalities.
To continue reading this article, click here.
Chicago Losing AA Rating as Daley Deals Fail to Offset Deficits
By Darrell Preston
September 13 (Bloomberg)
Chicago’s next mayor will take over a city that is almost out of cash after Richard M. Daley spent most of the $3.5 billion gained from leasing parking meters, garages and a 7.8-mile elevated toll road.
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September 13 (Bloomberg)
Chicago’s next mayor will take over a city that is almost out of cash after Richard M. Daley spent most of the $3.5 billion gained from leasing parking meters, garages and a 7.8-mile elevated toll road.
To continue reading this article, click here.
Real Estate Investors Go On Offense
Improving capital markets spark renewed interest across property types
Third-Quarter 2010 Real Estate Investment Outlook
September 2010 (Marcus and Millichap)
For a full reprint of this report, click here.
Beware of Greeks Bearing Bonds
