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Spanish Yields Blow Out Amid Italy Contagion As Italian Banks Scramble For Dollar Funding
Spanish Yields Blow Out Amid Italy Contagion As Italian Banks Scramble For Dollar Funding Contagion from the recent surge in Italian yields has spread, and is hitting Spanish 10Y yields which over the past 3 days have blown out from 1.65% to as high as 1.82% this morning, before paring some of the move, printing […]
More Italians Move Savings To Switzerland As Fears Of Banking “Doom Loop” Intensify
More Italians Move Savings To Switzerland As Fears Of Banking “Doom Loop” Intensify With the euro weakening against the Swiss franc (recently trading at session lows of 1.14) and Italian stocks and bonds tumbling once again on reports that the European Commission is planning to reject the Italian draft budget plan submitted earlier this week […]
The Great Depression II
The Great Depression II Whenever a movie has been a huge hit, the film industry tries to follow it up by doing a sequel. The sequel is almost invariably far more costly, as there’s the anticipation by those who create it that it will be an even bigger blockbuster than the original. The Great Depression […]
St Louis Fed Discloses More Free Money: A Carry Trade in Liquidity
St Louis Fed Discloses More Free Money: A Carry Trade in Liquidity Not only do banks earn free money on excess reserves, they can borrow money and make guaranteed free money on that. The Federal Reserve Bank of St. Louis discusses the Carry Trade in Liquidity. The IOER [interest on excess reserves] has been the […]
The Credit Cycle is on the Turn
THE CREDIT CYCLE IS ON THE TURN We are on the verge of moving into an era of high interest rates, so markets will behave differently from any time since the early-1980s. There are enough similarities with the post-Bretton Woods era of the 1970s to give us some guidance as to how markets are likely […]
Ten Years After the Last Meltdown: Is Another One Around the Corner?
Ten Years After the Last Meltdown: Is Another One Around the Corner? September marked a decade since the bursting of the housing bubble, which was followed by the stock market meltdown and the government bailout of the big banks and Wall Street. Last week’s frantic stock market sell-off indicates the failure to learn the lesson […]
Greece Planning Bad Debt Bailout For Its Banks After Market Crash
Greece Planning Bad Debt Bailout For Its Banks After Market Crash It seems like it was just yesterday that Greek banks, which carry some €89BN of bad loans on their balance sheets, passed the ECB’s latest confidence building exercise, known as the “stress test.” In retrospect that may have been premature, because as Bloomberg reports, […]
Banks Sputter After Hawkish Fed Raises Rates
Banks Sputter After Hawkish Fed Raises Rates In March we warned of continued Fed rate hikes. In May, we reported on more rate hikes and their potential impacton stocks. In August, the QT “time bomb” started ticking… On Wednesday, the Fed raised rates for the eighth time since tightening started. But the KBE Bank ETF — which holds Bank of America and Citigroup […]
Why Dodd-Frank Is a Shell Game for Banks
Why Dodd-Frank Is a Shell Game for Banks Ten years after the crisis, financial regulation leaves taxpayers holding the bag for banks’ safety net. Regulation is best understood as a dynamic game of action and response, in which either regulators or regulatees may make a move at any time. In this game, regulatees tend to make […]
The Everything Bubble: When Will It Finally Crash?
The Everything Bubble: When Will It Finally Crash? Much like the laws of physics, there are certain laws of economics that remain constant no matter how much manipulation exists in the markets. Expansion inevitably leads to contraction, and that which goes up must eventually come down. Central banks understand this reality very well; they have […]
India’s NPL Crisis Erupts: A Major Shadow Bank Defaults On Three Debt Payments
India’s NPL Crisis Erupts: A Major Shadow Bank Defaults On Three Debt Payments IL&FS Investment Managers, a unit of India’s Infrastructure Leasing & Financial Services (IL&FS) – an Indian infrastructure development and finance company and one of the nation’s largest “shadow banks” – which announced three debt defaults on Friday, said on Saturday morning its […]
How the Next Downturn Will Surprise Us
How the Next Downturn Will Surprise Us In their campaign to contain the risks that caused the Great Recession, central bankers may have planted the seeds for the next global economic crisis. ImageCreditCreditJi Lee After the fall of Lehman Brothers 10 years ago, there was a public debate about how the leading American banks had […]
The Aftershocks of the Economic Collapse Are Still Being Felt
The Aftershocks of the Economic Collapse Are Still Being Felt The Real Confrontation Is Yet To Come There has been a spate of articles recently on the ten year anniversary of the financial collapse. We wrote about this anniversary two weeks ago, describing the cause of the collapse and the reasons why we are still at risk for another […]
Why the Fed Denied the Narrow Bank
WHY THE FED DENIED THE NARROW BANK It’s not every day that a clear example showing the horrors of central planning comes along—the doublethink, the distortions, and the perverse incentives. It’s not every year that such an example occurs for monetary central planning. One came to the national attention this week. A company called TNB […]
What Keeps Them Up At Night
WHAT KEEPS THEM UP AT NIGHT “Government has coddled, accepted, and ignored white collar crime for too long. It is time the nation woke up and realized that it’s not the armed robbers or drug dealers who cause the most economic harm, it’s the white collar criminals living in the most expensive homes who have […]
