Economists list U.S. budget deficit as No. 1 worry
Reuters
The massive U.S. budget deficit is the gravest threat facing the economy, topping high unemployment and the risk of inflation or deflation, according to a survey of forecasters released on Monday.
http://jlne.ws/g2kD9j
Bullish noises from Thailand
By Emma Saunders, FT.com
Expect another rate rise on March 9 – maybe even by 50bp. Assistant Governor Paiboon Kittisrikangwan told reporters today that interest rates are still too low, and that “normalisation” will continue if inflation keeps rising.
http://jlne.ws/eXOh8n
Report: JP Morgan in investment talks with Twitter
By Ariana Eunjung Cha, The Washington Post
JP Morgan is reportedly in talks with Twitter to buy a minority stake in the micro-blogging site. Neither will comment on the talks, but anonymous sources confirmed to the New York Times, the Financial Times and the Wall Street Journal that the investment by JPMorgan's $1.22 billion digital growth fund would value Twitter at more than $4 billion.
http://jlne.ws/hwnwF5
Bullard: Economy Looking Better - Video, CNBC.com
Video
http://jlne.ws/dOVQk2
ECB: The ECB's experience with unconventional measures - Slides from presentation at the US Monetary Policy Forum
Slides
http://jlne.ws/hA0a9W
Special Report: In derivatives trade, RIP OTC?
By Huw Jones, Reuters
To get a measure of what financial markets think about plans to make trading in derivatives more uniform and transparent, ask no further than the regulators themselves. Thomas Huertas, a senior UK Financial Services Authority official, said recently that unless the plans to centralize trillions of dollars' worth of contracts were thought through carefully, it could be a bit like "putting a Chernobyl in the back yard."
http://jlne.ws/evGsAp
So Many Regulations, So Little Time
The Dodd-Frank Act is causing a radical restructuring of the over-the-counter derivatives market.
By SCOTT D. O'MALIA, WSJ.com
The Commodity Futures Trading Commission (CFTC) has embarked on a radical restructuring of the over-the-counter (OTC) derivatives market, at a pace that hardly allows us to even consider the impact of our new rules. We owe it to the markets we regulate, and to the American people who rely on them, to slow down and develop a carefully considered plan to carry out our mission. I believe we should not vote on any more final rules until the commission settles on an implementation strategy and a timeline that are realistic.
http://jlne.ws/fAcp2H
Goldman to Win Fed Blessing to Repay Berkshire, Buffett Says
Bloomberg
The Goldman Sachs stake and a $3 billion investment in General Electric Co ., each of which pay 10 percent annual interest to Berkshire, will likely be terminated by Dec. 31, Buffett said Feb. 26 in his annual letter. While the Fed has held back Goldman from repaying, the regulator "will likely give Goldman the green light before long," Buffett wrote.
http://jlne.ws/ffQGYR
Commercial banks are catching up
eFinancial News
Aesop couldn't have written it better. The shares of traditional, slow-paced "tortoise" retail banks are outperforming fast-paced investment banking "hares", which seem to be taking a nap while investors demand cost cuts and new revenue streams.
http://jlne.ws/hiP5CH
Citigroup Incurred Losses on 21% of Trading Days Last Year, Filing Shows
Bloomberg
Citigroup Inc., the third-largest U.S. bank by assets, said it had trading losses on 21 percent of the days when markets were open in 2010.
http://jlne.ws/ibGoZb
Citi could face up to $3 billion in Lehman claims
Reuters
Citigroup Inc could face up to $3 billion in claims from the bankruptcy proceedings of Lehman Brothers Holdings Inc , the third largest U.S. bank by assets said in a regulatory...
http://jlne.ws/huv6Kn
Bank of America, Citigroup, Wells Fargo say foreclosure probes may carry major financial tolls
Minneapolis-St. Paul Star Tribune
Probes by state attorneys general and other government agencies into banks' foreclosure practices carry the risk of fines and other major costs, according to regulatory filings from three of the country's biggest banks.
http://jlne.ws/i6s1TG
Northern Rock to offer 90% mortgages
By Sharlene Goff, Financial Times
Northern Rock is poised to launch a range of mortgages offering up to 90 per cent of a property’s value, marking the nationalised bank’s return to riskier lending three years after its collapse and government bail-out.
http://jlne.ws/fK4nIN
HSBC lifts pay-out but cuts profitability
By Patrick Jenkins, Financial Times
HSBC sent a mixed message to shareholders on Monday as it increased its dividend but cut its targeted profitability by a fifth.
http://jlne.ws/hSynJD
HSBC profit tops $13 bln, but misses expectations
Market Watch
Banking giant HSBC Holdings PLC said Monday that its 2010 net profit jumped to $13.16 billion from $5.83 billion a year earlier as the bank generated a profit in every consumer group and region for the first time since 2006. Pretax profit rose to $19.04 billion from $7.08 billion a year earlier as loan impairment charges shrank 47% to $14.04 billion. However, the result ...
http://jlne.ws/gKqM1K
HSBC cuts financial targets, shares fall
Reuters Finance News
HSBC cut its profitability targets due to the cost of tougher global bank regulations on Monday, and disappointed investors as its 2010 earnings came in slightly below analysts' ...
http://jlne.ws/gt9lj9
Statement On Support Of The Dodd-Frank Rulemaking Of CFTC Chairman Gary Gensler
Press Release
I support the proposed interpretive order regarding disruptive practices on designated contract markets or swap execution facilities. Congress expressly prohibited three trading practices that it deemed were disruptive of fair and equitable trading. Today’s order provides additional guidance to market participants and the public on the trading, practices and conduct that violate these statutory provisions. The order also addresses comments received by the Commission at the December 2nd roundtable and in response to the Advanced Notice of Proposed Rulemaking on disruptive trading practices. The order addresses the comments by clarifying how the Commission will interpret and implement the provisions of Section 747. I look forward to hearing from the public in response to this proposed interpretive order. The comment letters and staff roundtable were extremely helpful in formulating this proposed order.
http://jlne.ws/g0x8g3
Senior banker joins Barclays exodus
Scotland on Sunday
BARCLAYS Wealth has lost another senior private banker from its Glasgow office, Scotland on Sunday has learned.
http://jlne.ws/fvHs8M
Senin, 28 Februari 2011
CME Group to Offer New Financial Instruments Clearing Membership (FICM)
CHICAGO, Feb. 28, 2011 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, announced the creation of a new clearing membership class for interest rate futures allowing for significant margin offsets between CME Group Interest Rate futures and U.S. Treasury securities. The Financial Instruments Clearing Membership (FICM), which is expected to be offered by the end of the first quarter, will provide margin offsets of up to 65 percent to qualified firms that trade both U.S. Treasury securities and CME Group Interest Rate futures products.
"We are establishing this new clearing membership category to provide customers who trade both U.S. Treasury securities and CME Group's Interest Rate futures with greater capital efficiencies, enabling firms to trade cash/futures strategies in a highly cost-effective manner," said Bryan Durkin, CME Group's Chief Operating Officer and Managing Director of Products and Services. "With our interest rate complex open interest at 37 million contracts or $30 trillion in notional value, the new FICM membership provides a strong value proposition for our global customers who trade these products."
The FICM membership category leverages existing infrastructure of firms that are active in both the U.S. Treasury securities and CME Group Interest Rate futures markets. The new membership class combines the benefits of CME Group's deep, liquid Interest Rates futures markets with our industry leading risk management financial safeguards and proven track record of CME Clearing.
A number of trading firms, including Breakwater Trading, Endeavor Trading, Henning-Carey Proprietary Trading, and HTG Capital Partners, have tested and validated the FICM membership and are working with CME Group to become FICM members. A full CME clearing member must sponsor the FICM and act as the firm's facilities manager to transact in the U.S. Treasury securities market.
See a video of Derek Sammann, managing director of CME interest rate and FX products, talking about the new FICM here.
For additional information about the Financial Instruments Clearing Membership, visit: www.cmegroup.com/ficm
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the leading central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.
The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (Nasdaq: CME) and its products can be found at www.cmegroup.com.
CME-G
SOURCE CME Group
"We are establishing this new clearing membership category to provide customers who trade both U.S. Treasury securities and CME Group's Interest Rate futures with greater capital efficiencies, enabling firms to trade cash/futures strategies in a highly cost-effective manner," said Bryan Durkin, CME Group's Chief Operating Officer and Managing Director of Products and Services. "With our interest rate complex open interest at 37 million contracts or $30 trillion in notional value, the new FICM membership provides a strong value proposition for our global customers who trade these products."
The FICM membership category leverages existing infrastructure of firms that are active in both the U.S. Treasury securities and CME Group Interest Rate futures markets. The new membership class combines the benefits of CME Group's deep, liquid Interest Rates futures markets with our industry leading risk management financial safeguards and proven track record of CME Clearing.
A number of trading firms, including Breakwater Trading, Endeavor Trading, Henning-Carey Proprietary Trading, and HTG Capital Partners, have tested and validated the FICM membership and are working with CME Group to become FICM members. A full CME clearing member must sponsor the FICM and act as the firm's facilities manager to transact in the U.S. Treasury securities market.
See a video of Derek Sammann, managing director of CME interest rate and FX products, talking about the new FICM here.
For additional information about the Financial Instruments Clearing Membership, visit: www.cmegroup.com/ficm
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the leading central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.
The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (Nasdaq: CME) and its products can be found at www.cmegroup.com.
CME-G
SOURCE CME Group
Jumat, 25 Februari 2011
Top Interest Rate Headlines 02-25-11: Fed's Yellen: Would respond to sustained rise in core
Obama Aides Say Social Security No Threat to Nation's Finances
Bloomberg
Obama administration officials are rejecting the idea of making major changes to Social Security as part of a debate over reining in the national debt, a stance that’s drawing protests from deficit-cutting advocates.
http://jlne.ws/gvBa6A
Typos in Korea-EU trade pact create stir over possible delay
The Chosun llbo
Some figures in the Korean version of the Korea-EU FTA submitted to the National Assembly on Oct. 25 are different to the English version. According to the original draft, up to 50 percent of the materials for toys and wax products can come from abroad if they are to be considered made in Korea and benefit from tariff cuts. But in the Korean version the figures are 40 percent for toys and 20 percent for wax products, making it less advantageous for Korean goods.
http://jlne.ws/dZ1J8t
Fed's Yellen: Would respond to sustained rise in core
Reuters
Federal Reserve Vice Chair Janet Yellen said on Friday that U.S. central bank officials would react if inflation expectations or underlying inflation show persistent gains and began to show up in other prices.
http://jlne.ws/gAyZyN
Swiss central bank discord provides a warning bell
By Gillian Tett - Financial Times
In normal times, investors spend little time contemplating the political status of the Swiss National Bank. Now, however, they should – particularly given that geopolitical turmoil is causing the Swiss franc to soar.
http://jlne.ws/ftPN23
Funding regulators
Financial Times
The Dodd-Frank financial regulation law passed in July 2010 was a far-reaching effort to promote financial stability. Whether the legislation can achieve that goal, though, depends on how it is implemented. On this, there are some worrying signs. The House of Representatives has voted to cut funding by a third to the Commodity Futures Trading Commission. It also stripped $25m from the Securities and Exchange Commission. Squeezing two of the most important regulators jeopardises the progress made in creating a safer financial system.
http://jlne.ws/gaEmwf
Irish bank transfers approved
By John Murray Brown in Dublin - Financial Times
Ireland’s bank restructuring took another step forward on Thursday with the government approving the transfer of deposits from Anglo Irish Bank and Irish Nationwide Building Society, the nationalised institutions most affected by the collapse of Ireland’s property market.
http://jlne.ws/fVHnJr
Bonus News Was So Bad At Deutsche Bank, Their Head CDS Trader Is Moving To Jeffries
Business Insider
It sounds like Deutsche Bank's head of CDS trading and e-trading, Sean George, is going to lead a new derivatives trading initiative at Jeffries and Co, a relatively small bank compared to Deutsche Bank.
http://jlne.ws/fWgKrr
Banker bashing may 'cost UK £20bn'
Guardian Unlimited
Anthony Browne urged chancellor George Osborne to consider 'severe fiscal consequences' of anti-industry feeling One of Boris Johnson's key aides has warned that banker bashing "is not a joyful, cost-free pastime" and could put the country at risk of losing £20bn in tax revenue. Anthony Browne, who serves as the Conservative mayor's adviser for economic development, urged chancellor George ...
http://jlne.ws/f4VvP5
David Prosser: RBS bonuses do not mask its vulnerability
Independent
Those with a talent for mental arithmetic will have noticed that had Royal Bank of Scotland opted to pay no bonuses at all for last year to its investment bankers, the £950m saved would almost have wiped out the £1.13bn loss it reported yesterday.
http://jlne.ws/hddaSu
A.I.G. Posts $2.2 Billion Loss as Stock Sale Draws Nearer
By MICHAEL J. DE LA MERCED - NY Times
The insurer American International Group reported a $2.2 billion adjusted loss for its fourth quarter on Thursday, as it prepares to sell a big portion of the government’s stake in the company that was gained as part of a huge taxpayer-financed bailout.
http://jlne.ws/hjxsVO
SEC wants RI bond transactions list
WPRI Providence
The Rhode Island General Treasurer's office says the U.S. Securities and Exchange Commission has asked for a list of all bond transactions from the state since 2007 that included disclosures about state retirement plans.
http://jlne.ws/hmjIYR
Freddie Mac Executive Receives Wells Notice
By BEN PROTESS - NY Times
Securities regulators may soon file civil charges against a top executive at the mortgage finance company Freddie Mac, according to a public filing released on Thursday.
http://jlne.ws/fPLsEM
World's Biggest Pension Fund Will Likely Be Net Seller of Japanese Bonds
Bloomberg
Japan's public pension fund, the world's largest, said it may become a net seller of bonds to cover payments in the world's most rapidly aging society.
http://jlne.ws/hlbWfL
Sovereigns turn to pre-crisis financial wizardry
By Anousha Sakoui - Financial Times
Warren Buffett, one of the world’s most respected investors, labelled them “weapons of mass destruction”. In the wake of the financial crisis, various policymakers and regulators chimed in to demonise derivatives, along with structured finance and hedge funds, as causes of the turmoil.
http://jlne.ws/eZiIDI
Bloomberg
Obama administration officials are rejecting the idea of making major changes to Social Security as part of a debate over reining in the national debt, a stance that’s drawing protests from deficit-cutting advocates.
http://jlne.ws/gvBa6A
Typos in Korea-EU trade pact create stir over possible delay
The Chosun llbo
Some figures in the Korean version of the Korea-EU FTA submitted to the National Assembly on Oct. 25 are different to the English version. According to the original draft, up to 50 percent of the materials for toys and wax products can come from abroad if they are to be considered made in Korea and benefit from tariff cuts. But in the Korean version the figures are 40 percent for toys and 20 percent for wax products, making it less advantageous for Korean goods.
http://jlne.ws/dZ1J8t
Fed's Yellen: Would respond to sustained rise in core
Reuters
Federal Reserve Vice Chair Janet Yellen said on Friday that U.S. central bank officials would react if inflation expectations or underlying inflation show persistent gains and began to show up in other prices.
http://jlne.ws/gAyZyN
Swiss central bank discord provides a warning bell
By Gillian Tett - Financial Times
In normal times, investors spend little time contemplating the political status of the Swiss National Bank. Now, however, they should – particularly given that geopolitical turmoil is causing the Swiss franc to soar.
http://jlne.ws/ftPN23
Funding regulators
Financial Times
The Dodd-Frank financial regulation law passed in July 2010 was a far-reaching effort to promote financial stability. Whether the legislation can achieve that goal, though, depends on how it is implemented. On this, there are some worrying signs. The House of Representatives has voted to cut funding by a third to the Commodity Futures Trading Commission. It also stripped $25m from the Securities and Exchange Commission. Squeezing two of the most important regulators jeopardises the progress made in creating a safer financial system.
http://jlne.ws/gaEmwf
Irish bank transfers approved
By John Murray Brown in Dublin - Financial Times
Ireland’s bank restructuring took another step forward on Thursday with the government approving the transfer of deposits from Anglo Irish Bank and Irish Nationwide Building Society, the nationalised institutions most affected by the collapse of Ireland’s property market.
http://jlne.ws/fVHnJr
Bonus News Was So Bad At Deutsche Bank, Their Head CDS Trader Is Moving To Jeffries
Business Insider
It sounds like Deutsche Bank's head of CDS trading and e-trading, Sean George, is going to lead a new derivatives trading initiative at Jeffries and Co, a relatively small bank compared to Deutsche Bank.
http://jlne.ws/fWgKrr
Banker bashing may 'cost UK £20bn'
Guardian Unlimited
Anthony Browne urged chancellor George Osborne to consider 'severe fiscal consequences' of anti-industry feeling One of Boris Johnson's key aides has warned that banker bashing "is not a joyful, cost-free pastime" and could put the country at risk of losing £20bn in tax revenue. Anthony Browne, who serves as the Conservative mayor's adviser for economic development, urged chancellor George ...
http://jlne.ws/f4VvP5
David Prosser: RBS bonuses do not mask its vulnerability
Independent
Those with a talent for mental arithmetic will have noticed that had Royal Bank of Scotland opted to pay no bonuses at all for last year to its investment bankers, the £950m saved would almost have wiped out the £1.13bn loss it reported yesterday.
http://jlne.ws/hddaSu
A.I.G. Posts $2.2 Billion Loss as Stock Sale Draws Nearer
By MICHAEL J. DE LA MERCED - NY Times
The insurer American International Group reported a $2.2 billion adjusted loss for its fourth quarter on Thursday, as it prepares to sell a big portion of the government’s stake in the company that was gained as part of a huge taxpayer-financed bailout.
http://jlne.ws/hjxsVO
SEC wants RI bond transactions list
WPRI Providence
The Rhode Island General Treasurer's office says the U.S. Securities and Exchange Commission has asked for a list of all bond transactions from the state since 2007 that included disclosures about state retirement plans.
http://jlne.ws/hmjIYR
Freddie Mac Executive Receives Wells Notice
By BEN PROTESS - NY Times
Securities regulators may soon file civil charges against a top executive at the mortgage finance company Freddie Mac, according to a public filing released on Thursday.
http://jlne.ws/fPLsEM
World's Biggest Pension Fund Will Likely Be Net Seller of Japanese Bonds
Bloomberg
Japan's public pension fund, the world's largest, said it may become a net seller of bonds to cover payments in the world's most rapidly aging society.
http://jlne.ws/hlbWfL
Sovereigns turn to pre-crisis financial wizardry
By Anousha Sakoui - Financial Times
Warren Buffett, one of the world’s most respected investors, labelled them “weapons of mass destruction”. In the wake of the financial crisis, various policymakers and regulators chimed in to demonise derivatives, along with structured finance and hedge funds, as causes of the turmoil.
http://jlne.ws/eZiIDI
Kamis, 24 Februari 2011
February 24, 2011: Bullard Says Fed May Want To Look Global [NEWSLETTER]
Conversation Starter
St. Louis Fed’s Bullard Discusses Quantitative Easing, Global Inflation and Commodity Standards
In remarks delivered Thursday at the Bowling Green Area Chamber of Commerce Coffee Hour, St. Louis Fed President James Bullard discussed three of the most widely talked about topics regarding monetary policy. In his presentation “Quantitative Easing, Global Inflation, and Commodity Standards” Bullard explained how the Fed’s second round of quantitative easing was a substitute for ordinary monetary policy easing. He concluded that quantitative easing is "an effective tool" when the policy rate is near zero. He then examined whether U.S. monetary policy analysis should focus on a global output gap rather than the U.S. output gap. He finished his discussion with a look at the merits of commodity standards and inflation targeting, stating that “inflation targeting is a better choice in the current environment.”
See Bullard's full speech here.
**CN: As of Thursday morning, CME Group Eurodollar Futures were pricing in about a 60% chance of a 25 basis point rate hike at the March FOMC meeting.
Lead Stories
Bullard says Fed may want to look global
By Steve Goldstein, MarketWatch
Fast-growing emerging economies may be behind rising commodity prices and could help explain how the Federal Reserve could be inadvertently stoking global inflation even at a time of high U.S. unemployment, St. Louis Fed President James Bullard said Thursday.
http://jlne.ws/eg4cqM
Problem banks grow in fourth quarter, FDIC says
By Ronald D. Orol, MarketWatch
The number of problem banks in the U.S. grew in the fourth quarter, with total failures reaching an 18-year high in all of 2010, the Federal Deposit Insurance Corp., said Wednesday, even as the agency reported another quarter of healthy profits overall for the banking industry.
http://jlne.ws/f6poNW
Chicago Economist's `Crazy' Education Idea Wins Ken Griffin's Backing
Bloomberg
John List, a University of Chicago economics professor, strides through the Griffin Early Childhood Center chatting with teachers, complimenting girls on their braids and hollering out the window.
http://jlne.ws/hZtkbh
Deutsche Bank Banned From Derivatives Trading in South Korea
By Seonjin Cha and Saeromi Shin, Bloomberg
Deutsche Bank AG was given the heaviest penalty ever levied on a foreign securities firm in South Korea for triggering a Nov. 11 stock market rout that erased $26 billion of value.
http://jlne.ws/gnWQ1Y
Deutsche Bank fined for irresponsible mortgage lending
DW-World
Deutsche Bank has become the first bank to be fined by the UK's Financial Services Authority for irresponsible lending practices. They have been ordered to pay 1.8m euros in compensation to customers.
http://jlne.ws/eqBBrU
**CN: My guess is there were many meetings held at the executive level at Deutsche Bank this week.
Geithner Says World in Better Position to Handle Oil-Price Jump
By Rich Miller, Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said the economic recovery has put the world on a better footing to withstand the increase in oil prices caused by turmoil in the Middle East.
http://jlne.ws/g25EPr
Bad habits of credit bubble make comeback
By John Plender, FT.com
Here we go again. The start of the year in debt markets has been marked by record low yields on junk bonds, declining underwriting standards and a return of the more dangerous innovations of yesteryear such as payment-in-kind toggles which allow borrowers to issue more debt to pay the interest bill. Even covenant-lite loans, where normal borrowing conditions are shelved, have made a comeback in the leveraged buyout market and elsewhere, at a time when hapless small and medium sized firms are hard pressed to find credit.
http://jlne.ws/i0FrOM
Experts: U.S. Fed Mishandled International Dimensions Of QE2
WSJ.com
The Federal Reserve Board initially mishandled its controversial effort to boost the U.S. economy with government bond purchases, but has since taken some smart steps to make up for the mishap, according to senior economists.
http://jlne.ws/fjxm17
EU bank calls for more Egypt, Tunisia funds
By GABRIELE STEINHAUSER, Associated Press
The European Investment Bank said Tuesday that it needs more money to support a transition to democracy in Tunisia, Egypt and other countries in the Arab region, though even the increase it requested from the EU would only allow it to keep investments at their current level.
http://jlne.ws/dF4xNw
George Soros: Obama Has “Lost Control” Of His Economic Agenda
By Bess Levin, DealBreaker
Apparently it’s now “in the hands of the Republican Party,” which will prove negative for the economy. Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s “Fareed Zakaria GPS” program.
http://jlne.ws/hP80li
MENA causing risk aversion
MarkIt
Risk aversion permeated the markets today as investors grappled with the implications of turmoil in the Middle East
and North Africa. After the revolutions in neighbouring Tunisia and Egypt, it now seems that Libya is the next most
likely country to see a forced change in government... The unrest had a predictable effect on other MENA sovereign spreads, i.e. widening. Libya itself doesn’t trade in the CDS market (no debt outstanding) but Morocco, a more liberal North African country, does. Its spreads widened beyond 200bp today, approaching the levels it reached at the peak of the “Jasmine Revolution” in Tunisia late last month.
http://jlne.ws/erTQ9L
Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms
By Joshua Zumbrun, Bloomberg
Federal Reserve Bank of Kansas City President Thomas Hoenig said U.S. regulators should avert another crisis by breaking up large financial institutions that pose a threat “to our capitalistic system.”
http://jlne.ws/f0jEEz
Geithner Called Fannie Mae, Freddie Mac Biggest 'Moral Hazard'
Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said government-sponsored mortgage giants Fannie Mae and Freddie Mac were the biggest sources of "moral hazard," leading investors to count on a bailout for risks gone wrong.
http://jlne.ws/gwiGNf
Weber sets Germany on collision course with EU
By Ralph Atkins, Financial Times
Axel Weber, Germany’s departing Bundesbank president, has put his country on a collision course with its eurozone partners by opposing a central part of proposals for resolving future sovereign debt crises.
http://jlne.ws/h9VCla
Europe’s reforms may come at a high price
By Axel Weber, Financial Times
In the coming weeks, European policymakers will have to decide on an overhaul of governance of the European monetary union. As a guiding principle the European Council has clearly – and, in my view, rightly – stated that the main foundations of EMU and the European Union treaty have to be respected. This means the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU. In this context, what cornerstones are to be considered in the matter of reforming EMU governance?
http://jlne.ws/h5pw3s
ECB overnight lending rockets to 19-month high
Ramya Jaidev, Risk.net
Overnight lending by the European Central Bank (ECB) shot up to its highest level in just under 19 months on Wednesday, data published by the central bank.
http://jlne.ws/gacYi0
China Central Bank Raises Reserve Requirement
WSJ.com
China's central bank, continuing its battle against inflation, said on Friday it will raise the bank reserve requirement ratio by 0.5 percentage points, the second such hike this year. Economist expect more tightening to come.
http://jlne.ws/f0nlCB
Bernanke Defends Fed Policies
By JON HILSENRATH And LUCA DI LEO, WSJ.com
Federal Reserve Chairman Ben Bernanke offered his most pointed rebuttal yet on Friday to foreign critics who say the U.S. central bank's easy-money policies are causing inflation and asset bubbles abroad.
http://jlne.ws/guChL2
Free Trade Agreements Good for U.S. Jobs: U.S. Commerce Sec.
By Stacy Curtin, Yahoo Finance
Just over a year ago in his State of the Union Address, President Obama pledged to create 2 million jobs by doubling exports by 2015.
http://jlne.ws/eHdEDH
Banks Find Loophole on Capital Rule
By DAVID ENRICH, WSJ.com
Some foreign banks are moving to restructure their U.S. operations to avoid one of the most-burdensome requirements of the new Dodd-Frank law. In November, Barclays PLC quietly changed the legal classification of the U.K. bank's main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.
http://jlne.ws/eJiwfn
Mutual Funds' Muni-Debt Prices Are Questioned
By JEAN EAGLESHAM, MICHAEL CORKERY And CARRICK MOLLENKAMP - WSJ
The Securities and Exchange Commission is investigating whether some mutual funds have overstated the value of risky municipal bonds that are thinly traded, according to people familiar with the matter.
http://jlne.ws/gHCjvc
Citigroup's Pandit Says U.S. Rules May Squeeze Credit
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said new U.S. banking rules may mean tighter credit and less access for borrowers because of costs imposed on lenders.
http://jlne.ws/hyemGP
NY pension scammer is heading to prison
CNN Money
Henry "Hank" Morris, one of the masterminds of a pay-to-play scandal involving the New York state pension system, today was sentenced to up to four years in prison. He also agreed to repay $19 million in ill-gotten gains, and to be permanently banned from the securities industry in New York State.
http://jlne.ws/i2U1Vz
Events
Fixed Income Conference
March 7, 2011
FINRA's Annual Conference Focuses On Market Impacts On Fixed Incomes and How Regulators And Firms Are Responding - New York
http://www.finra.org/Industry/Education/ConferencesEvents/FixedIncomeConference/index.htm
The 36th Annual International Futures Industry Conference
March 15-18, 2011
FIA's Annual Convention - Boca Raton
http://www.futuresindustry.org/boca-2011-program.asp
SIFMA 2nd Annual Private Client Conference
Apr. 7 and 8, 2011
SIFMA's Conference For Private Client Groups At All Levels - New York
http://www.sifma.org/events/event.aspx?id=22289
Fixed Income Summit
Apr. 28, 2011
Pensions & Investments' One-Day Conference - Chicago
http://www.pionline.com/conferences/fixed-income/2011/register
2011 Morningstar Investment Conference
June 8-10, 2011
Morningstar's Conference For Leaders From Across The Investment Industry - Chicago
http://advisor.morningstar.com/products/mstr_conference.asp
Economic News
Kansas City Fed Mfg Survey Surges to Record Levels
The Bond Buyer
By Gary Siegel, The Bond Buyer
Manufacturing activity in the Federal Reserve Bank of Kansas City’s region “matched an all-time survey high in February, and firms expected strong activity in the months ahead.
http://jlne.ws/h5xXvC
Jobless Claims Fall; Durable Goods Reverse Declines
BY LUCA DI LEO, ANDREW ACKERMAN, JEFF BATER AND TOM BARKLEY, WSJ.com
The number of U.S. workers filing new claims for unemployment benefits fell more than expected last week, pointing to continued improvement in the jobs market as the economy picks up speed.
http://jlne.ws/hSxX4F
Existing Home Sales Up 2.7% In January
By Steve Goldstein, Bloomberg
Sales of existing homes rose a seasonally-adjusted 2.7% in January for the fifth monthly rise in six, a trade group said Wednesday as it also announced a major review into the quality of its data.
http://jlne.ws/hKbRvF
Case-Shiller: US House Prices Are Closing In On the Post-Bubble Trough
Credit Writedowns
The S and P/Case Shiller Home Price Indices shows that house prices in the U.S. continue to decline this winter. For data through December 2010, the broad Composite-20 index is down 2.4% compared to December 2009. The Composite-10 index is down 1.2% in that time frame. While these numbers were in line with expectations, they point to a continuing double dip in housing.
http://jlne.ws/eayxKa
US Consumer Confidence Rising
International Business Times
The US Consumer Confidence rose in February to 70.4; better than the predicted 65.0 and thr prior reading of 60.6.
http://jlne.ws/ft6mEP
Exchanges, Clearing Houses & MTFs
CBOE to Relaunch Credit Event Binary Options (CEBOs) Contracts on March 8
Press Release
CHICAGO, Feb. 22, 2011 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) announced today that on Tuesday, March 8, the Exchange will begin trading newly-designed Credit Event Binary Options (CEBOs) contracts.
http://jlne.ws/eJtXQc
CME Group Fed Funds Futures Go Green: February 28, 2011
Press Release
Beginning Sunday, February 27, 2011 (trade date Monday, February 28, 2011), CME Group will extend the listing cycle of 30-Day Fed Funds futures by offering a third year of monthly expirations, effectively listing 36 consecutive monthly expiries for trading. The "Green" Fed Funds futures expirations will be traded both on CME Globex and in open outcry.
http://jlne.ws/ec4oB9
Firms & Banks
Barclays purchase of Lehman unit ruled fair
By Telis Demos, Financial Times
A US bankruptcy court judge has ruled that Barclays’ purchase of Lehman Brothers’ US broker-dealer was fair and should not be revisited.
http://jlne.ws/ghHegB
Barclays online annual report short on transparency
Guardian Unlimited
Our desire is to make this report as transparent and open as possible, says Barclays' chairman, Marcus Agius, in his online introduction to his bank's 2009 annual report. This wish, however, failed to produce the startling statistic that Barclays paid just £113m in UK corporation tax in 2009 , a year in which the bank reported profits of £11.6bn (or £4.6bn excluding the sale of its fund ...
http://jlne.ws/hTk68y
Barclays' corporation tax bill blunts Bob Diamond's sparkling words
AFP Telegraph Finance News via Yahoo! Finance
Push Bob Diamond hard enough and he comes up with this sort of stuff: "I think payment of tax is an important responsibility of businesses, yes." That's what the £9m-a-year Barclays (LSE: BARC.L - news) chief executive said to the Treasury Select Committee on January 11, when he had a little mental block over how much corporation tax the bank paid in 2009.
http://jlne.ws/faXpyf
Barclays criticised over UK tax bill
Yahoo! Finance
Barclays bank has revealed it paid STG113 million ($A180 million) in corporation tax in Britain in 2009, about 2.45 per cent of its profits that year, sparking strong criticism on Saturday.Opposition lawmaker ...
http://jlne.ws/hgktAa
Citigroup Ignored Signs of Fraud in Madoff Scheme, Trustee Suit Says
New York Times
The lawsuit said red flags should have been apparent to Citi as early as 2005.
http://jlne.ws/edFCoB
Commerzbank returns to annual profit
By James Wilson, Financial Times
Commerzbank promised further significant improvement in profitability this year as it returned to annual profit for the first time since the financial crisis with results that were better than expected.
http://jlne.ws/gxAZxk
Former U.S. Congressman Harold Ford, Jr. Joins Morgan Stanley
Press Release
Morgan Stanley (NYSE: MS) today announced the appointment of former U.S. Congressman Harold Ford, Jr. to the Firm as a Managing Director and senior client relationship manager. Mr. Ford will work across all business divisions and report to Gregory Fleming, President of Morgan Stanley Smith Barney and President of Morgan Stanley Investment Management, and to Paul J. Taubman, Co-President of Institutional Securities.
http://jlne.ws/emws3a
Goldman Sachs' hedge fund VIP list
eFinancial News
It's a VIP list but not as we know it. Goldman Sachs has published a list of Very Important Positions for hedge funds (see Chart 1) and tracked how well the list has performed in the stock market since 2001.
http://jlne.ws/hdDQWf
Goldman's Blankfein Opposed Raising Salaries Before His Tripled
Bloomberg
Lloyd Blankfein , Goldman Sachs Group Inc.'s chairman and chief executive officer, warned against raising base salaries on Wall Street less than eight months before his own more than tripled to $2 million.
http://jlne.ws/ew7Mzs
RBS's Full-Year Loss Probably Shrank by 98% Since Credit Crisis
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest government-owned bank, may say its full-year loss shrank by 98 percent from 2008, when it received a record taxpayer-funded bailout.
http://jlne.ws/dQrLfa
Merger pays off for incoming Harris N.A. CEO
By: Steve Daniels, Crain's
The Marshall & Ilsley Corp. CEO who in December negotiated the sale of Wisconsin’s biggest bank to the parent of Chicago’s Harris N.A. is in line for $24 million in cash payments in addition to the salary, bonus and equity awards he’ll be getting under a three-year contract to run the combined banks.
http://jlne.ws/gqWOso
Credit Suisse banker arrested in United States
Reuters
A Credit Suisse banker was arrested in New York and was being moved to Florida for a court appearance, according to a law enforcement source familiar with the case.
http://jlne.ws/g7izdE
JPMorgan Says It Was Tricked Into Keeping Lehman's `Goat Poo' Collateral
By David McLaughlin, Bloomberg
Lehman Brothers Holdings Inc. tricked JPMorgan Chase & Co. into holding onto collateral that the bankrupt investment firm internally described as “goat poo,” according to a court filing by JPMorgan.
http://jlne.ws/gurCfx
Bank of America restates card unit results
By Justin Baer in New York, Financial Times
Bank of America has revised the results of its international credit card business for the last two years, adding a $20.3bn non-cash goodwill writedown in 2009 while reversing a $10.4bn charge made last year.
http://jlne.ws/fY2DEU
RBS to sell £1.6 billion of unwanted loans - report
Interactive Investor
Royal Bank of Scotland ( RBS.L ) is planning to sell 1.6 billion pounds of unwanted loans from the boom years of the commercial real estate sector, the Financial Times said on Monday.
http://jlne.ws/aGJ9oq
RBS chief: I won't bow to pay pressure
Scotland on Sunday
ROYAL Bank of Scotland chief executive Stephen Hester has become embroiled in an internal dispute with advisers over remuneration, telling them he will not commit the bank to being at the bottom of the pay league.
http://jlne.ws/g3FDDJ
Citigroup pays top execs bonuses
The Star
NEW YORK: Citigroup, recovering after a series of government bailouts, will pay some top executives millions of dollars of cash bonuses if its core operations earn at least US$12bil before taxes over the next two years.
http://jlne.ws/eOtDI3
US arrests Swiss banker in tax probe
By Kara Scannell and Justin Baer in New York and Haig Simonian in Zurich, Financial Times
A Credit Suisse banker has been arrested in connection with a long-running US tax evasion investigation and could be one of several individuals likely to face charges this week as prosecutors turn their focus from institutions to bankers and wealthy clients, said people familiar with the matter.
http://jlne.ws/hSFtJP
HSBC Amanah is Euromoney's Best International Islamic Bank for second year
Zawya
HSBC Amanah HSBC Amanah has again been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2011. The awards are widely considered to be the most high profile accolades in the Islamic finance industry and annually recognise outstanding performance, quality, service, and innovation in the sector.
http://jlne.ws/fYH95m
Banking titan J. Christopher Flowers describes financial meltdown from the inside
Naples Daily News
Cautious optimism was on the agenda at Friday afternoon's Forum Club lecture, given by finance industry veteran J. Christopher Flowers. The full house that packed Naples Beach Hotel's ballroom listened with rapt attention as Flowers described the September 2008 financial meltdown - a meltdown he saw from the inside while actively trying to save some of America's largest financial institutions.
http://jlne.ws/fDfTtu
Regulators
U.S. Republicans push to delay Dodd-Frank reforms
National Post
Republicans escalated their push to delay and defund the Dodd-Frank Wall Street reforms on Thursday as top regulators appeared before the U.S. Senate Banking Committee with a new chairman presiding
http://jlne.ws/gBrVzG
CFTC butts heads with Shelby on funding
Market Watch
Commodity Futures Trading Commission Chairman Gary Gensler on Thursday took issue with criticism from Republican Sen. Richard Shelby of Alabama who complained that the CFTC failed to hire a chief economist in a timely manner. Gensler acknowledged that the agency took a long time to fill a chief economist slot, but said that cuts to the agency's budget would mean ...
http://jlne.ws/fcm2DD
Consumer Watchdog Hires Former Bankers
By BEN PROTESS, NY Times
As the new federal consumer watchdog agency takes shape, Wall Street might see a few familiar faces on its roster. Elizabeth Warren, the Harvard University law professor who is setting up the Consumer Financial Protection Bureau, announced her latest string of hires on Thursday, including former managing directors at Deutsche Bank and Morgan Stanley.
http://jlne.ws/h2LiR4
OTC
IOSCO identifies benefits of organised platform derivatives trading
Thaipr.net
The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a Report on Trading of OTC Derivatives. The report analyses the benefits, costs, and challenge
http://jlne.ws/fR6lFm
Banks to Thwart CFTC Rule on Open Swap Trades, Oliver Wyman Says
By Matthew Leising, Bloomberg
A Commodity Futures Trading Commission plan to ensure open access to swap-trading systems will be thwarted by banks, who want to exclude customers and trade only among themselves in a part of the market, according to consulting firm Oliver Wyman.
http://jlne.ws/fxUvr3
Global News
National Bank of Rwanda Holds Rate at 6.00%
Central Bank News
The National Bank of Rwanda maintained its key repo rate unchanged at 6.00% in order to support its growth objective of 7% or more in 2011. Rwanda recorded real GDP growth of 7.4% in 2010; while the Bank estimated December 2010 inflation as 0.2% year on year, compared to 5.7% in 2009. The National Institute of Statistics of Rwanda reported inflation of 1.09% in January, up from 0.23% in December.
http://jlne.ws/fmNiEI
Vietnam Tackles Inflation, Raises Prices
BY JAMES HOOKWAY, WSJ.com
Vietnam's leaders unveiled measures aimed at curbing soaring inflation rates Thursday, even as residents worried over electricity- and fuel-price increases that are sending energy costs as much as 24% higher.
http://jlne.ws/ejNcUm
National Bank of Moldova Holds Rate at 8.00%
Central Bank News
The National Bank of Moldova maintained its base rate unchanged at 8.00%, while also holding the rate on overnight loans at 11.00%, and the overnight deposit rate at 5.00%. The Bank also maintained the required reserve ratio on local and foreign currency deposits at 11%. Moldova saw inflation of 6.7% in January 2011, down from 8.1% in December. The Bank expects inflation to pick up temporarily in the second half of the year due to rising international food and fuel prices.
http://jlne.ws/eCm2nH
Duvvuri Subbarao Speech: The Reserve Bank of India making a difference in your daily life
Convocation address by Dr Duvvuri Subbarao, Governor of the Reserve Bank of India, at the Sambalpur University, Sambalpur, 24 February 2011.
First of all, my thanks to the Governor and Chancellor, HE Shri M.C. Bhandare, Vice Chancellor Professor Pujari, faculty and students of Sambalpur University for inviting me to be the convocation speaker this year. This is an honour to which I attach a lot of value. It feels wonderful to be in this beautiful state of Orissa and in the bustling Sambalpur area.
http://jlne.ws/hbfXF9
FSA fines Deutsche Bank mortgage division
FT.com
DB Mortgages, the lending arm of Deutsche Bank, has been fined £840,000 ($1.4m) and ordered to pay customers £1.5m by the Financial Services Authority for “irresponsible lending practises” in the years leading up to the financial crisis. The penalty imposed by the FSA is the first time the regulator has taken enforcement action against a firm for irresponsible mortgage lending.
http://jlne.ws/hUNVWt
Inflation and interest rates: Mervyn's dilemma
The Economist
FOR many years the job of the Bank of England’s monetary-policy committee (MPC) seemed straightforward. The knocks that from time to time pushed the economy off its path of steady growth tended to shove inflation downward, too.
http://jlne.ws/i4Ekn7
ZFS in LatAm insurance tie-up with Santander
FT.com
Zurich Financial Services has bought a 51 per cent stake in the Latin American insurance operations of Spain’s Santander, the Swiss insurer said on Tuesday.
http://jlne.ws/i7X5Fb
St. Louis Fed’s Bullard Discusses Quantitative Easing, Global Inflation and Commodity Standards
In remarks delivered Thursday at the Bowling Green Area Chamber of Commerce Coffee Hour, St. Louis Fed President James Bullard discussed three of the most widely talked about topics regarding monetary policy. In his presentation “Quantitative Easing, Global Inflation, and Commodity Standards” Bullard explained how the Fed’s second round of quantitative easing was a substitute for ordinary monetary policy easing. He concluded that quantitative easing is "an effective tool" when the policy rate is near zero. He then examined whether U.S. monetary policy analysis should focus on a global output gap rather than the U.S. output gap. He finished his discussion with a look at the merits of commodity standards and inflation targeting, stating that “inflation targeting is a better choice in the current environment.”
See Bullard's full speech here.
**CN: As of Thursday morning, CME Group Eurodollar Futures were pricing in about a 60% chance of a 25 basis point rate hike at the March FOMC meeting.
Lead Stories
Bullard says Fed may want to look global
By Steve Goldstein, MarketWatch
Fast-growing emerging economies may be behind rising commodity prices and could help explain how the Federal Reserve could be inadvertently stoking global inflation even at a time of high U.S. unemployment, St. Louis Fed President James Bullard said Thursday.
http://jlne.ws/eg4cqM
Problem banks grow in fourth quarter, FDIC says
By Ronald D. Orol, MarketWatch
The number of problem banks in the U.S. grew in the fourth quarter, with total failures reaching an 18-year high in all of 2010, the Federal Deposit Insurance Corp., said Wednesday, even as the agency reported another quarter of healthy profits overall for the banking industry.
http://jlne.ws/f6poNW
Chicago Economist's `Crazy' Education Idea Wins Ken Griffin's Backing
Bloomberg
John List, a University of Chicago economics professor, strides through the Griffin Early Childhood Center chatting with teachers, complimenting girls on their braids and hollering out the window.
http://jlne.ws/hZtkbh
Deutsche Bank Banned From Derivatives Trading in South Korea
By Seonjin Cha and Saeromi Shin, Bloomberg
Deutsche Bank AG was given the heaviest penalty ever levied on a foreign securities firm in South Korea for triggering a Nov. 11 stock market rout that erased $26 billion of value.
http://jlne.ws/gnWQ1Y
Deutsche Bank fined for irresponsible mortgage lending
DW-World
Deutsche Bank has become the first bank to be fined by the UK's Financial Services Authority for irresponsible lending practices. They have been ordered to pay 1.8m euros in compensation to customers.
http://jlne.ws/eqBBrU
**CN: My guess is there were many meetings held at the executive level at Deutsche Bank this week.
Geithner Says World in Better Position to Handle Oil-Price Jump
By Rich Miller, Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said the economic recovery has put the world on a better footing to withstand the increase in oil prices caused by turmoil in the Middle East.
http://jlne.ws/g25EPr
Bad habits of credit bubble make comeback
By John Plender, FT.com
Here we go again. The start of the year in debt markets has been marked by record low yields on junk bonds, declining underwriting standards and a return of the more dangerous innovations of yesteryear such as payment-in-kind toggles which allow borrowers to issue more debt to pay the interest bill. Even covenant-lite loans, where normal borrowing conditions are shelved, have made a comeback in the leveraged buyout market and elsewhere, at a time when hapless small and medium sized firms are hard pressed to find credit.
http://jlne.ws/i0FrOM
Experts: U.S. Fed Mishandled International Dimensions Of QE2
WSJ.com
The Federal Reserve Board initially mishandled its controversial effort to boost the U.S. economy with government bond purchases, but has since taken some smart steps to make up for the mishap, according to senior economists.
http://jlne.ws/fjxm17
EU bank calls for more Egypt, Tunisia funds
By GABRIELE STEINHAUSER, Associated Press
The European Investment Bank said Tuesday that it needs more money to support a transition to democracy in Tunisia, Egypt and other countries in the Arab region, though even the increase it requested from the EU would only allow it to keep investments at their current level.
http://jlne.ws/dF4xNw
George Soros: Obama Has “Lost Control” Of His Economic Agenda
By Bess Levin, DealBreaker
Apparently it’s now “in the hands of the Republican Party,” which will prove negative for the economy. Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s “Fareed Zakaria GPS” program.
http://jlne.ws/hP80li
MENA causing risk aversion
MarkIt
Risk aversion permeated the markets today as investors grappled with the implications of turmoil in the Middle East
and North Africa. After the revolutions in neighbouring Tunisia and Egypt, it now seems that Libya is the next most
likely country to see a forced change in government... The unrest had a predictable effect on other MENA sovereign spreads, i.e. widening. Libya itself doesn’t trade in the CDS market (no debt outstanding) but Morocco, a more liberal North African country, does. Its spreads widened beyond 200bp today, approaching the levels it reached at the peak of the “Jasmine Revolution” in Tunisia late last month.
http://jlne.ws/erTQ9L
Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms
By Joshua Zumbrun, Bloomberg
Federal Reserve Bank of Kansas City President Thomas Hoenig said U.S. regulators should avert another crisis by breaking up large financial institutions that pose a threat “to our capitalistic system.”
http://jlne.ws/f0jEEz
Geithner Called Fannie Mae, Freddie Mac Biggest 'Moral Hazard'
Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said government-sponsored mortgage giants Fannie Mae and Freddie Mac were the biggest sources of "moral hazard," leading investors to count on a bailout for risks gone wrong.
http://jlne.ws/gwiGNf
Weber sets Germany on collision course with EU
By Ralph Atkins, Financial Times
Axel Weber, Germany’s departing Bundesbank president, has put his country on a collision course with its eurozone partners by opposing a central part of proposals for resolving future sovereign debt crises.
http://jlne.ws/h9VCla
Europe’s reforms may come at a high price
By Axel Weber, Financial Times
In the coming weeks, European policymakers will have to decide on an overhaul of governance of the European monetary union. As a guiding principle the European Council has clearly – and, in my view, rightly – stated that the main foundations of EMU and the European Union treaty have to be respected. This means the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU. In this context, what cornerstones are to be considered in the matter of reforming EMU governance?
http://jlne.ws/h5pw3s
ECB overnight lending rockets to 19-month high
Ramya Jaidev, Risk.net
Overnight lending by the European Central Bank (ECB) shot up to its highest level in just under 19 months on Wednesday, data published by the central bank.
http://jlne.ws/gacYi0
China Central Bank Raises Reserve Requirement
WSJ.com
China's central bank, continuing its battle against inflation, said on Friday it will raise the bank reserve requirement ratio by 0.5 percentage points, the second such hike this year. Economist expect more tightening to come.
http://jlne.ws/f0nlCB
Bernanke Defends Fed Policies
By JON HILSENRATH And LUCA DI LEO, WSJ.com
Federal Reserve Chairman Ben Bernanke offered his most pointed rebuttal yet on Friday to foreign critics who say the U.S. central bank's easy-money policies are causing inflation and asset bubbles abroad.
http://jlne.ws/guChL2
Free Trade Agreements Good for U.S. Jobs: U.S. Commerce Sec.
By Stacy Curtin, Yahoo Finance
Just over a year ago in his State of the Union Address, President Obama pledged to create 2 million jobs by doubling exports by 2015.
http://jlne.ws/eHdEDH
Banks Find Loophole on Capital Rule
By DAVID ENRICH, WSJ.com
Some foreign banks are moving to restructure their U.S. operations to avoid one of the most-burdensome requirements of the new Dodd-Frank law. In November, Barclays PLC quietly changed the legal classification of the U.K. bank's main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.
http://jlne.ws/eJiwfn
Mutual Funds' Muni-Debt Prices Are Questioned
By JEAN EAGLESHAM, MICHAEL CORKERY And CARRICK MOLLENKAMP - WSJ
The Securities and Exchange Commission is investigating whether some mutual funds have overstated the value of risky municipal bonds that are thinly traded, according to people familiar with the matter.
http://jlne.ws/gHCjvc
Citigroup's Pandit Says U.S. Rules May Squeeze Credit
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said new U.S. banking rules may mean tighter credit and less access for borrowers because of costs imposed on lenders.
http://jlne.ws/hyemGP
NY pension scammer is heading to prison
CNN Money
Henry "Hank" Morris, one of the masterminds of a pay-to-play scandal involving the New York state pension system, today was sentenced to up to four years in prison. He also agreed to repay $19 million in ill-gotten gains, and to be permanently banned from the securities industry in New York State.
http://jlne.ws/i2U1Vz
Events
Fixed Income Conference
March 7, 2011
FINRA's Annual Conference Focuses On Market Impacts On Fixed Incomes and How Regulators And Firms Are Responding - New York
http://www.finra.org/Industry/Education/ConferencesEvents/FixedIncomeConference/index.htm
The 36th Annual International Futures Industry Conference
March 15-18, 2011
FIA's Annual Convention - Boca Raton
http://www.futuresindustry.org/boca-2011-program.asp
SIFMA 2nd Annual Private Client Conference
Apr. 7 and 8, 2011
SIFMA's Conference For Private Client Groups At All Levels - New York
http://www.sifma.org/events/event.aspx?id=22289
Fixed Income Summit
Apr. 28, 2011
Pensions & Investments' One-Day Conference - Chicago
http://www.pionline.com/conferences/fixed-income/2011/register
2011 Morningstar Investment Conference
June 8-10, 2011
Morningstar's Conference For Leaders From Across The Investment Industry - Chicago
http://advisor.morningstar.com/products/mstr_conference.asp
Economic News
Kansas City Fed Mfg Survey Surges to Record Levels
The Bond Buyer
By Gary Siegel, The Bond Buyer
Manufacturing activity in the Federal Reserve Bank of Kansas City’s region “matched an all-time survey high in February, and firms expected strong activity in the months ahead.
http://jlne.ws/h5xXvC
Jobless Claims Fall; Durable Goods Reverse Declines
BY LUCA DI LEO, ANDREW ACKERMAN, JEFF BATER AND TOM BARKLEY, WSJ.com
The number of U.S. workers filing new claims for unemployment benefits fell more than expected last week, pointing to continued improvement in the jobs market as the economy picks up speed.
http://jlne.ws/hSxX4F
Existing Home Sales Up 2.7% In January
By Steve Goldstein, Bloomberg
Sales of existing homes rose a seasonally-adjusted 2.7% in January for the fifth monthly rise in six, a trade group said Wednesday as it also announced a major review into the quality of its data.
http://jlne.ws/hKbRvF
Case-Shiller: US House Prices Are Closing In On the Post-Bubble Trough
Credit Writedowns
The S and P/Case Shiller Home Price Indices shows that house prices in the U.S. continue to decline this winter. For data through December 2010, the broad Composite-20 index is down 2.4% compared to December 2009. The Composite-10 index is down 1.2% in that time frame. While these numbers were in line with expectations, they point to a continuing double dip in housing.
http://jlne.ws/eayxKa
US Consumer Confidence Rising
International Business Times
The US Consumer Confidence rose in February to 70.4; better than the predicted 65.0 and thr prior reading of 60.6.
http://jlne.ws/ft6mEP
Exchanges, Clearing Houses & MTFs
CBOE to Relaunch Credit Event Binary Options (CEBOs) Contracts on March 8
Press Release
CHICAGO, Feb. 22, 2011 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) announced today that on Tuesday, March 8, the Exchange will begin trading newly-designed Credit Event Binary Options (CEBOs) contracts.
http://jlne.ws/eJtXQc
CME Group Fed Funds Futures Go Green: February 28, 2011
Press Release
Beginning Sunday, February 27, 2011 (trade date Monday, February 28, 2011), CME Group will extend the listing cycle of 30-Day Fed Funds futures by offering a third year of monthly expirations, effectively listing 36 consecutive monthly expiries for trading. The "Green" Fed Funds futures expirations will be traded both on CME Globex and in open outcry.
http://jlne.ws/ec4oB9
Firms & Banks
Barclays purchase of Lehman unit ruled fair
By Telis Demos, Financial Times
A US bankruptcy court judge has ruled that Barclays’ purchase of Lehman Brothers’ US broker-dealer was fair and should not be revisited.
http://jlne.ws/ghHegB
Barclays online annual report short on transparency
Guardian Unlimited
Our desire is to make this report as transparent and open as possible, says Barclays' chairman, Marcus Agius, in his online introduction to his bank's 2009 annual report. This wish, however, failed to produce the startling statistic that Barclays paid just £113m in UK corporation tax in 2009 , a year in which the bank reported profits of £11.6bn (or £4.6bn excluding the sale of its fund ...
http://jlne.ws/hTk68y
Barclays' corporation tax bill blunts Bob Diamond's sparkling words
AFP Telegraph Finance News via Yahoo! Finance
Push Bob Diamond hard enough and he comes up with this sort of stuff: "I think payment of tax is an important responsibility of businesses, yes." That's what the £9m-a-year Barclays (LSE: BARC.L - news) chief executive said to the Treasury Select Committee on January 11, when he had a little mental block over how much corporation tax the bank paid in 2009.
http://jlne.ws/faXpyf
Barclays criticised over UK tax bill
Yahoo! Finance
Barclays bank has revealed it paid STG113 million ($A180 million) in corporation tax in Britain in 2009, about 2.45 per cent of its profits that year, sparking strong criticism on Saturday.Opposition lawmaker ...
http://jlne.ws/hgktAa
Citigroup Ignored Signs of Fraud in Madoff Scheme, Trustee Suit Says
New York Times
The lawsuit said red flags should have been apparent to Citi as early as 2005.
http://jlne.ws/edFCoB
Commerzbank returns to annual profit
By James Wilson, Financial Times
Commerzbank promised further significant improvement in profitability this year as it returned to annual profit for the first time since the financial crisis with results that were better than expected.
http://jlne.ws/gxAZxk
Former U.S. Congressman Harold Ford, Jr. Joins Morgan Stanley
Press Release
Morgan Stanley (NYSE: MS) today announced the appointment of former U.S. Congressman Harold Ford, Jr. to the Firm as a Managing Director and senior client relationship manager. Mr. Ford will work across all business divisions and report to Gregory Fleming, President of Morgan Stanley Smith Barney and President of Morgan Stanley Investment Management, and to Paul J. Taubman, Co-President of Institutional Securities.
http://jlne.ws/emws3a
Goldman Sachs' hedge fund VIP list
eFinancial News
It's a VIP list but not as we know it. Goldman Sachs has published a list of Very Important Positions for hedge funds (see Chart 1) and tracked how well the list has performed in the stock market since 2001.
http://jlne.ws/hdDQWf
Goldman's Blankfein Opposed Raising Salaries Before His Tripled
Bloomberg
Lloyd Blankfein , Goldman Sachs Group Inc.'s chairman and chief executive officer, warned against raising base salaries on Wall Street less than eight months before his own more than tripled to $2 million.
http://jlne.ws/ew7Mzs
RBS's Full-Year Loss Probably Shrank by 98% Since Credit Crisis
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest government-owned bank, may say its full-year loss shrank by 98 percent from 2008, when it received a record taxpayer-funded bailout.
http://jlne.ws/dQrLfa
Merger pays off for incoming Harris N.A. CEO
By: Steve Daniels, Crain's
The Marshall & Ilsley Corp. CEO who in December negotiated the sale of Wisconsin’s biggest bank to the parent of Chicago’s Harris N.A. is in line for $24 million in cash payments in addition to the salary, bonus and equity awards he’ll be getting under a three-year contract to run the combined banks.
http://jlne.ws/gqWOso
Credit Suisse banker arrested in United States
Reuters
A Credit Suisse banker was arrested in New York and was being moved to Florida for a court appearance, according to a law enforcement source familiar with the case.
http://jlne.ws/g7izdE
JPMorgan Says It Was Tricked Into Keeping Lehman's `Goat Poo' Collateral
By David McLaughlin, Bloomberg
Lehman Brothers Holdings Inc. tricked JPMorgan Chase & Co. into holding onto collateral that the bankrupt investment firm internally described as “goat poo,” according to a court filing by JPMorgan.
http://jlne.ws/gurCfx
Bank of America restates card unit results
By Justin Baer in New York, Financial Times
Bank of America has revised the results of its international credit card business for the last two years, adding a $20.3bn non-cash goodwill writedown in 2009 while reversing a $10.4bn charge made last year.
http://jlne.ws/fY2DEU
RBS to sell £1.6 billion of unwanted loans - report
Interactive Investor
Royal Bank of Scotland ( RBS.L ) is planning to sell 1.6 billion pounds of unwanted loans from the boom years of the commercial real estate sector, the Financial Times said on Monday.
http://jlne.ws/aGJ9oq
RBS chief: I won't bow to pay pressure
Scotland on Sunday
ROYAL Bank of Scotland chief executive Stephen Hester has become embroiled in an internal dispute with advisers over remuneration, telling them he will not commit the bank to being at the bottom of the pay league.
http://jlne.ws/g3FDDJ
Citigroup pays top execs bonuses
The Star
NEW YORK: Citigroup, recovering after a series of government bailouts, will pay some top executives millions of dollars of cash bonuses if its core operations earn at least US$12bil before taxes over the next two years.
http://jlne.ws/eOtDI3
US arrests Swiss banker in tax probe
By Kara Scannell and Justin Baer in New York and Haig Simonian in Zurich, Financial Times
A Credit Suisse banker has been arrested in connection with a long-running US tax evasion investigation and could be one of several individuals likely to face charges this week as prosecutors turn their focus from institutions to bankers and wealthy clients, said people familiar with the matter.
http://jlne.ws/hSFtJP
HSBC Amanah is Euromoney's Best International Islamic Bank for second year
Zawya
HSBC Amanah HSBC Amanah has again been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2011. The awards are widely considered to be the most high profile accolades in the Islamic finance industry and annually recognise outstanding performance, quality, service, and innovation in the sector.
http://jlne.ws/fYH95m
Banking titan J. Christopher Flowers describes financial meltdown from the inside
Naples Daily News
Cautious optimism was on the agenda at Friday afternoon's Forum Club lecture, given by finance industry veteran J. Christopher Flowers. The full house that packed Naples Beach Hotel's ballroom listened with rapt attention as Flowers described the September 2008 financial meltdown - a meltdown he saw from the inside while actively trying to save some of America's largest financial institutions.
http://jlne.ws/fDfTtu
Regulators
U.S. Republicans push to delay Dodd-Frank reforms
National Post
Republicans escalated their push to delay and defund the Dodd-Frank Wall Street reforms on Thursday as top regulators appeared before the U.S. Senate Banking Committee with a new chairman presiding
http://jlne.ws/gBrVzG
CFTC butts heads with Shelby on funding
Market Watch
Commodity Futures Trading Commission Chairman Gary Gensler on Thursday took issue with criticism from Republican Sen. Richard Shelby of Alabama who complained that the CFTC failed to hire a chief economist in a timely manner. Gensler acknowledged that the agency took a long time to fill a chief economist slot, but said that cuts to the agency's budget would mean ...
http://jlne.ws/fcm2DD
Consumer Watchdog Hires Former Bankers
By BEN PROTESS, NY Times
As the new federal consumer watchdog agency takes shape, Wall Street might see a few familiar faces on its roster. Elizabeth Warren, the Harvard University law professor who is setting up the Consumer Financial Protection Bureau, announced her latest string of hires on Thursday, including former managing directors at Deutsche Bank and Morgan Stanley.
http://jlne.ws/h2LiR4
OTC
IOSCO identifies benefits of organised platform derivatives trading
Thaipr.net
The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a Report on Trading of OTC Derivatives. The report analyses the benefits, costs, and challenge
http://jlne.ws/fR6lFm
Banks to Thwart CFTC Rule on Open Swap Trades, Oliver Wyman Says
By Matthew Leising, Bloomberg
A Commodity Futures Trading Commission plan to ensure open access to swap-trading systems will be thwarted by banks, who want to exclude customers and trade only among themselves in a part of the market, according to consulting firm Oliver Wyman.
http://jlne.ws/fxUvr3
Global News
National Bank of Rwanda Holds Rate at 6.00%
Central Bank News
The National Bank of Rwanda maintained its key repo rate unchanged at 6.00% in order to support its growth objective of 7% or more in 2011. Rwanda recorded real GDP growth of 7.4% in 2010; while the Bank estimated December 2010 inflation as 0.2% year on year, compared to 5.7% in 2009. The National Institute of Statistics of Rwanda reported inflation of 1.09% in January, up from 0.23% in December.
http://jlne.ws/fmNiEI
Vietnam Tackles Inflation, Raises Prices
BY JAMES HOOKWAY, WSJ.com
Vietnam's leaders unveiled measures aimed at curbing soaring inflation rates Thursday, even as residents worried over electricity- and fuel-price increases that are sending energy costs as much as 24% higher.
http://jlne.ws/ejNcUm
National Bank of Moldova Holds Rate at 8.00%
Central Bank News
The National Bank of Moldova maintained its base rate unchanged at 8.00%, while also holding the rate on overnight loans at 11.00%, and the overnight deposit rate at 5.00%. The Bank also maintained the required reserve ratio on local and foreign currency deposits at 11%. Moldova saw inflation of 6.7% in January 2011, down from 8.1% in December. The Bank expects inflation to pick up temporarily in the second half of the year due to rising international food and fuel prices.
http://jlne.ws/eCm2nH
Duvvuri Subbarao Speech: The Reserve Bank of India making a difference in your daily life
Convocation address by Dr Duvvuri Subbarao, Governor of the Reserve Bank of India, at the Sambalpur University, Sambalpur, 24 February 2011.
First of all, my thanks to the Governor and Chancellor, HE Shri M.C. Bhandare, Vice Chancellor Professor Pujari, faculty and students of Sambalpur University for inviting me to be the convocation speaker this year. This is an honour to which I attach a lot of value. It feels wonderful to be in this beautiful state of Orissa and in the bustling Sambalpur area.
http://jlne.ws/hbfXF9
FSA fines Deutsche Bank mortgage division
FT.com
DB Mortgages, the lending arm of Deutsche Bank, has been fined £840,000 ($1.4m) and ordered to pay customers £1.5m by the Financial Services Authority for “irresponsible lending practises” in the years leading up to the financial crisis. The penalty imposed by the FSA is the first time the regulator has taken enforcement action against a firm for irresponsible mortgage lending.
http://jlne.ws/hUNVWt
Inflation and interest rates: Mervyn's dilemma
The Economist
FOR many years the job of the Bank of England’s monetary-policy committee (MPC) seemed straightforward. The knocks that from time to time pushed the economy off its path of steady growth tended to shove inflation downward, too.
http://jlne.ws/i4Ekn7
ZFS in LatAm insurance tie-up with Santander
FT.com
Zurich Financial Services has bought a 51 per cent stake in the Latin American insurance operations of Spain’s Santander, the Swiss insurer said on Tuesday.
http://jlne.ws/i7X5Fb
Rabu, 23 Februari 2011
Top Interest Rate Headlines 02-23-11: Problem banks grow in fourth quarter, FDIC says
Problem banks grow in fourth quarter, FDIC says
By Ronald D. Orol, MarketWatch
The number of problem banks in the U.S. grew in the fourth quarter, with total failures reaching an 18-year high in all of 2010, the Federal Deposit Insurance Corp., said Wednesday, even as the agency reported another quarter of healthy profits overall for the banking industry.
http://jlne.ws/f6poNW
Existing Home Sales Up 2.7% In January
By Steve Goldstein, Bloomberg
Sales of existing homes rose a seasonally-adjusted 2.7% in January for the fifth monthly rise in six, a trade group said Wednesday as it also announced a major review into the quality of its data.
http://jlne.ws/hKbRvF
Chicago Economist's `Crazy' Education Idea Wins Ken Griffin's Backing
http://jlne.ws/hZtkbh
Deutsche Bank Banned From Derivatives Trading in South Korea
http://jlne.ws/gnWQ1Y
Geithner Says World in Better Position to Handle Oil-Price Jump
By Rich Miller, Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said the economic recovery has put the world on a better footing to withstand the increase in oil prices caused by turmoil in the Middle East.
http://www.bloomberg.com/news/2011-02-23/geithner-says-world-is-in-a-better-position-to-handle-surge-in-oil-prices.html
CBOE to Relaunch Credit Event Binary Options (CEBOs) Contracts on March 8
Press Release
CHICAGO, Feb. 22, 2011 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) announced today that on Tuesday, March 8, the Exchange will begin trading newly-designed Credit Event Binary Options (CEBOs) contracts.
http://jlne.ws/eJtXQc
Goldman Sachs' hedge fund VIP list
eFinancial News
It's a VIP list but not as we know it. Goldman Sachs has published a list of Very Important Positions for hedge funds (see Chart 1) and tracked how well the list has performed in the stock market since 2001.
http://jlne.ws/hdDQWf
Bad habits of credit bubble make comeback
By John Plender
Here we go again. The start of the year in debt markets has been marked by record low yields on junk bonds, declining underwriting standards and a return of the more dangerous innovations of yesteryear such as payment-in-kind toggles which allow borrowers to issue more debt to pay the interest bill. Even covenant-lite loans, where normal borrowing conditions are shelved, have made a comeback in the leveraged buyout market and elsewhere, at a time when hapless small and medium sized firms are hard pressed to find credit.
http://jlne.ws/i0FrOM
Barclays purchase of Lehman unit ruled fair
By Telis Demos in New York - Financial Times
A US bankruptcy court judge has ruled that Barclays’ purchase of Lehman Brothers’ US broker-dealer was fair and should not be revisited.
http://jlne.ws/ghHegB
Citigroup Ignored Signs of Fraud in Madoff Scheme, Trustee Suit Says
New York Times
The lawsuit said red flags should have been apparent to Citi as early as 2005.
http://jlne.ws/edFCoB
Commerzbank returns to annual profit
By James Wilson in Frankfurt - Financial Times
Commerzbank promised further significant improvement in profitability this year as it returned to annual profit for the first time since the financial crisis with results that were better than expected.
http://jlne.ws/gxAZxk
Former U.S. Congressman Harold Ford, Jr. Joins Morgan Stanley
Press Release
Morgan Stanley (NYSE: MS) today announced the appointment of former U.S. Congressman Harold Ford, Jr. to the Firm as a Managing Director and senior client relationship manager. Mr. Ford will work across all business divisions and report to Gregory Fleming, President of Morgan Stanley Smith Barney and President of Morgan Stanley Investment Management, and to Paul J. Taubman, Co-President of Institutional Securities.
http://jlne.ws/emws3a
Goldman's Blankfein Opposed Raising Salaries Before His Tripled
Bloomberg
Lloyd Blankfein , Goldman Sachs Group Inc.'s chairman and chief executive officer, warned against raising base salaries on Wall Street less than eight months before his own more than tripled to $2 million.
http://jlne.ws/ew7Mzs
Barclays online annual report short on transparency
Guardian Unlimited
Our desire is to make this report as transparent and open as possible, says Barclays' chairman, Marcus Agius, in his online introduction to his bank's 2009 annual report. This wish, however, failed to produce the startling statistic that Barclays paid just £113m in UK corporation tax in 2009 , a year in which the bank reported profits of £11.6bn (or £4.6bn excluding the sale of its fund ...
http://jlne.ws/hTk68y
RBS's Full-Year Loss Probably Shrank by 98% Since Credit Crisis
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest government-owned bank, may say its full-year loss shrank by 98 percent from 2008, when it received a record taxpayer-funded bailout.
http://jlne.ws/dQrLfa
Merger pays off for incoming Harris N.A. CEO
By: Steve Daniels - Crain's
(Crain's) — The Marshall & Ilsley Corp. CEO who in December negotiated the sale of Wisconsin’s biggest bank to the parent of Chicago’s Harris N.A. is in line for $24 million in cash payments in addition to the salary, bonus and equity awards he’ll be getting under a three-year contract to run the combined banks.
http://jlne.ws/gqWOso
Credit Suisse banker arrested in United States
Reuters
WASHINGTON (Reuters) - A Credit Suisse banker was arrested in New York and was being moved to Florida for a court appearance, according to a law enforcement source familiar with the case.
http://jlne.ws/g7izdE
Deutsche Bank fined for irresponsible mortgage lending
DW-World
Deutsche Bank has become the first bank to be fined by the UK's Financial Services Authority for irresponsible lending practices. They have been ordered to pay 1.8m euros in compensation to customers.
http://jlne.ws/eqBBrU
Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms
http://jlne.ws/f0jEEz
By Ronald D. Orol, MarketWatch
The number of problem banks in the U.S. grew in the fourth quarter, with total failures reaching an 18-year high in all of 2010, the Federal Deposit Insurance Corp., said Wednesday, even as the agency reported another quarter of healthy profits overall for the banking industry.
http://jlne.ws/f6poNW
Existing Home Sales Up 2.7% In January
By Steve Goldstein, Bloomberg
Sales of existing homes rose a seasonally-adjusted 2.7% in January for the fifth monthly rise in six, a trade group said Wednesday as it also announced a major review into the quality of its data.
http://jlne.ws/hKbRvF
Chicago Economist's `Crazy' Education Idea Wins Ken Griffin's Backing
http://jlne.ws/hZtkbh
Deutsche Bank Banned From Derivatives Trading in South Korea
http://jlne.ws/gnWQ1Y
Geithner Says World in Better Position to Handle Oil-Price Jump
By Rich Miller, Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said the economic recovery has put the world on a better footing to withstand the increase in oil prices caused by turmoil in the Middle East.
http://www.bloomberg.com/news/2011-02-23/geithner-says-world-is-in-a-better-position-to-handle-surge-in-oil-prices.html
CBOE to Relaunch Credit Event Binary Options (CEBOs) Contracts on March 8
Press Release
CHICAGO, Feb. 22, 2011 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) announced today that on Tuesday, March 8, the Exchange will begin trading newly-designed Credit Event Binary Options (CEBOs) contracts.
http://jlne.ws/eJtXQc
Goldman Sachs' hedge fund VIP list
eFinancial News
It's a VIP list but not as we know it. Goldman Sachs has published a list of Very Important Positions for hedge funds (see Chart 1) and tracked how well the list has performed in the stock market since 2001.
http://jlne.ws/hdDQWf
Bad habits of credit bubble make comeback
By John Plender
Here we go again. The start of the year in debt markets has been marked by record low yields on junk bonds, declining underwriting standards and a return of the more dangerous innovations of yesteryear such as payment-in-kind toggles which allow borrowers to issue more debt to pay the interest bill. Even covenant-lite loans, where normal borrowing conditions are shelved, have made a comeback in the leveraged buyout market and elsewhere, at a time when hapless small and medium sized firms are hard pressed to find credit.
http://jlne.ws/i0FrOM
Barclays purchase of Lehman unit ruled fair
By Telis Demos in New York - Financial Times
A US bankruptcy court judge has ruled that Barclays’ purchase of Lehman Brothers’ US broker-dealer was fair and should not be revisited.
http://jlne.ws/ghHegB
Citigroup Ignored Signs of Fraud in Madoff Scheme, Trustee Suit Says
New York Times
The lawsuit said red flags should have been apparent to Citi as early as 2005.
http://jlne.ws/edFCoB
Commerzbank returns to annual profit
By James Wilson in Frankfurt - Financial Times
Commerzbank promised further significant improvement in profitability this year as it returned to annual profit for the first time since the financial crisis with results that were better than expected.
http://jlne.ws/gxAZxk
Former U.S. Congressman Harold Ford, Jr. Joins Morgan Stanley
Press Release
Morgan Stanley (NYSE: MS) today announced the appointment of former U.S. Congressman Harold Ford, Jr. to the Firm as a Managing Director and senior client relationship manager. Mr. Ford will work across all business divisions and report to Gregory Fleming, President of Morgan Stanley Smith Barney and President of Morgan Stanley Investment Management, and to Paul J. Taubman, Co-President of Institutional Securities.
http://jlne.ws/emws3a
Goldman's Blankfein Opposed Raising Salaries Before His Tripled
Bloomberg
Lloyd Blankfein , Goldman Sachs Group Inc.'s chairman and chief executive officer, warned against raising base salaries on Wall Street less than eight months before his own more than tripled to $2 million.
http://jlne.ws/ew7Mzs
Barclays online annual report short on transparency
Guardian Unlimited
Our desire is to make this report as transparent and open as possible, says Barclays' chairman, Marcus Agius, in his online introduction to his bank's 2009 annual report. This wish, however, failed to produce the startling statistic that Barclays paid just £113m in UK corporation tax in 2009 , a year in which the bank reported profits of £11.6bn (or £4.6bn excluding the sale of its fund ...
http://jlne.ws/hTk68y
RBS's Full-Year Loss Probably Shrank by 98% Since Credit Crisis
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest government-owned bank, may say its full-year loss shrank by 98 percent from 2008, when it received a record taxpayer-funded bailout.
http://jlne.ws/dQrLfa
Merger pays off for incoming Harris N.A. CEO
By: Steve Daniels - Crain's
(Crain's) — The Marshall & Ilsley Corp. CEO who in December negotiated the sale of Wisconsin’s biggest bank to the parent of Chicago’s Harris N.A. is in line for $24 million in cash payments in addition to the salary, bonus and equity awards he’ll be getting under a three-year contract to run the combined banks.
http://jlne.ws/gqWOso
Credit Suisse banker arrested in United States
Reuters
WASHINGTON (Reuters) - A Credit Suisse banker was arrested in New York and was being moved to Florida for a court appearance, according to a law enforcement source familiar with the case.
http://jlne.ws/g7izdE
Deutsche Bank fined for irresponsible mortgage lending
DW-World
Deutsche Bank has become the first bank to be fined by the UK's Financial Services Authority for irresponsible lending practices. They have been ordered to pay 1.8m euros in compensation to customers.
http://jlne.ws/eqBBrU
Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms
http://jlne.ws/f0jEEz
Selasa, 22 Februari 2011
Top Interest Rate Headlines 02-22-11: EU Bank Calls For More Egypt, Tunisia Funds
EU bank calls for more Egypt, Tunisia funds
By GABRIELE STEINHAUSER, Associated Press
The European Investment Bank said Tuesday that it needs more money to support a transition to democracy in Tunisia, Egypt and other countries in the Arab region, though even the increase it requested from the EU would only allow it to keep investments at their current level.
http://jlne.ws/dF4xNw
George Soros: Obama Has “Lost Control” Of His Economic Agenda
By Bess Levin, DealBreaker
Apparently it’s now “in the hands of the Republican Party,” which will prove negative for the economy. Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s “Fareed Zakaria GPS” program.
http://jlne.ws/hP80li
MENA causing risk aversion
MarkIt
Risk aversion permeated the markets today as investors grappled with the implications of turmoil in the Middle East
and North Africa. After the revolutions in neighbouring Tunisia and Egypt, it now seems that Libya is the next most
likely country to see a forced change in government... The unrest had a predictable effect on other MENA sovereign spreads, i.e. widening. Libya itself doesn’t trade in the CDS market (no debt outstanding) but Morocco, a more liberal North African country, does. Its spreads widened
beyond 200bp today, approaching the levels it reached at the peak of the “Jasmine Revolution” in Tunisia late last month.
http://jlne.ws/erTQ9L
Case-Shiller: US House Prices Are Closing In On the Post-Bubble Trough
Credit Writedowns
The S&P/Case Shiller Home Price Indices shows that house prices in the U.S. continue to decline this winter. For data through December 2010, the broad Composite-20 index is down 2.4% compared to December 2009. The Composite-10 index is down 1.2% in that time frame. While these numbers were in line with expectations, they point to a continuing double dip in housing.
http://jlne.ws/eayxKa
Fed Buys $7.24 Billion In POMO
Federal Reserve Bank of New York Release
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://jlne.ws/dcRpcM
Experts: U.S. Fed Mishandled International Dimensions Of QE2
The Federal Reserve Board initially mishandled its controversial effort to boost the U.S. economy with government bond purchases, but has since taken some smart steps to make up for the mishap, according to senior economists.
http://jlne.ws/fjxm17
FSA fines Deutsche Bank mortgage division
FT.com
DB Mortgages, the lending arm of Deutsche Bank, has been fined £840,000 ($1.4m) and ordered to pay customers £1.5m by the Financial Services Authority for “irresponsible lending practises” in the years leading up to the financial crisis. The penalty imposed by the FSA is the first time the regulator has taken enforcement action against a firm for irresponsible mortgage lending.
http://jlne.ws/hUNVWt
US Consumer Confidence Rising
International Business Times
The US Consumer Confidence rose in February to 70.4; better than the predicted 65.0 and thr prior reading of 60.6.
http://jlne.ws/ft6mEP
Inflation and interest rates: Mervyn's dilemma
The Economist
FOR many years the job of the Bank of England’s monetary-policy committee (MPC) seemed straightforward. The knocks that from time to time pushed the economy off its path of steady growth tended to shove inflation downward, too.
http://jlne.ws/i4Ekn7
IOSCO identifies benefits of organised platform derivatives trading
Thaipr.net
The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a Report on Trading of OTC Derivatives. The report analyses the benefits, costs, and challenge
http://jlne.ws/fR6lFm
Banks to Thwart CFTC Rule on Open Swap Trades, Oliver Wyman Says
By Matthew Leising, Bloomberg
A Commodity Futures Trading Commission plan to ensure open access to swap-trading systems will be thwarted by banks, who want to exclude customers and trade only among themselves in a part of the market, according to consulting firm Oliver Wyman.
http://jlne.ws/fxUvr3
Geithner Called Fannie Mae, Freddie Mac Biggest 'Moral Hazard'
Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said government-sponsored mortgage giants Fannie Mae and Freddie Mac were the biggest sources of "moral hazard," leading investors to count on a bailout for risks gone wrong.
http://jlne.ws/gwiGNf
G-20 Statement By U.S. Treasury Secretary Timothy F. Geithner
Press Release
http://jlne.ws/g5L2OI
Weber sets Germany on collision course with EU
By Ralph Atkins, Financial Times
Axel Weber, Germany’s departing Bundesbank president, has put his country on a collision course with its eurozone partners by opposing a central part of proposals for resolving future sovereign debt crises.
http://jlne.ws/h9VCla
Europe’s reforms may come at a high price
By Axel Weber, Financial Times
In the coming weeks, European policymakers will have to decide on an overhaul of governance of the European monetary union. As a guiding principle the European Council has clearly – and, in my view, rightly – stated that the main foundations of EMU and the European Union treaty have to be respected. This means the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU. In this context, what cornerstones are to be considered in the matter of reforming EMU governance?
http://jlne.ws/h5pw3s
JPMorgan Says It Was Tricked Into Keeping Lehman's `Goat Poo' Collateral
By David McLaughlin, Bloomberg
Lehman Brothers Holdings Inc. tricked JPMorgan Chase & Co. into holding onto collateral that the bankrupt investment firm internally described as “goat poo,” according to a court filing by JPMorgan.
http://jlne.ws/gurCfx
ZFS in LatAm insurance tie-up with Santander
By FT reporters
Zurich Financial Services has bought a 51 per cent stake in the Latin American insurance operations of Spain’s Santander, the Swiss insurer said on Tuesday.
http://jlne.ws/i7X5Fb
Bank of America restates card unit results
By Justin Baer in New York, Financial Times
Bank of America has revised the results of its international credit card business for the last two years, adding a $20.3bn non-cash goodwill writedown in 2009 while reversing a $10.4bn charge made last year.
http://jlne.ws/fY2DEU
RBS to sell £1.6 billion of unwanted loans - report
Interactive Investor
Royal Bank of Scotland ( RBS.L ) is planning to sell 1.6 billion pounds of unwanted loans from the boom years of the commercial real estate sector, the Financial Times said on Monday.
http://jlne.ws/aGJ9oq
RBS chief: I won't bow to pay pressure
Scotland on Sunday
ROYAL Bank of Scotland chief executive Stephen Hester has become embroiled in an internal dispute with advisers over remuneration, telling them he will not commit the bank to being at the bottom of the pay league.
http://jlne.ws/g3FDDJ
Citigroup pays top execs bonuses
The Star
NEW YORK: Citigroup, recovering after a series of government bailouts, will pay some top executives millions of dollars of cash bonuses if its core operations earn at least US$12bil before taxes over the next two years.
http://jlne.ws/eOtDI3
Barclays' corporation tax bill blunts Bob Diamond's sparkling words
AFP Telegraph Finance News via Yahoo! UK & Ireland Finance
Push Bob Diamond hard enough and he comes up with this sort of stuff: "I think payment of tax is an important responsibility of businesses, yes." That's what the £9m-a-year Barclays (LSE: BARC.L - news) chief executive said to the Treasury Select Committee on January 11, when he had a little mental block over how much corporation tax the bank paid in 2009.
http://jlne.ws/faXpyf
Barclays criticised over UK tax bill
Yahoo! Finance
Barclays bank has revealed it paid STG113 million ($A180 million) in corporation tax in Britain in 2009, about 2.45 per cent of its profits that year, sparking strong criticism on Saturday.Opposition lawmaker ...
http://jlne.ws/hgktAa
US arrests Swiss banker in tax probe
By Kara Scannell and Justin Baer in New York and Haig Simonian in Zurich, Financial Times
A Credit Suisse banker has been arrested in connection with a long-running US tax evasion investigation and could be one of several individuals likely to face charges this week as prosecutors turn their focus from institutions to bankers and wealthy clients, said people familiar with the matter.
http://jlne.ws/hSFtJP
HSBC Amanah is Euromoney's Best International Islamic Bank for second year
Zawya
HSBC Amanah HSBC Amanah has again been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2011. The awards are widely considered to be the most high profile accolades in the Islamic finance industry and annually recognise outstanding performance, quality, service, and innovation in the sector.
http://jlne.ws/fYH95m
Banking titan J. Christopher Flowers describes financial meltdown from the inside
Naples Daily News
Cautious optimism was on the agenda at Friday afternoon's Forum Club lecture, given by finance industry veteran J. Christopher Flowers. The full house that packed Naples Beach Hotel's ballroom listened with rapt attention as Flowers described the September 2008 financial meltdown - a meltdown he saw from the inside while actively trying to save some of America's largest financial institutions.
http://jlne.ws/fDfTtu
By GABRIELE STEINHAUSER, Associated Press
The European Investment Bank said Tuesday that it needs more money to support a transition to democracy in Tunisia, Egypt and other countries in the Arab region, though even the increase it requested from the EU would only allow it to keep investments at their current level.
http://jlne.ws/dF4xNw
George Soros: Obama Has “Lost Control” Of His Economic Agenda
By Bess Levin, DealBreaker
Apparently it’s now “in the hands of the Republican Party,” which will prove negative for the economy. Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s “Fareed Zakaria GPS” program.
http://jlne.ws/hP80li
MENA causing risk aversion
MarkIt
Risk aversion permeated the markets today as investors grappled with the implications of turmoil in the Middle East
and North Africa. After the revolutions in neighbouring Tunisia and Egypt, it now seems that Libya is the next most
likely country to see a forced change in government... The unrest had a predictable effect on other MENA sovereign spreads, i.e. widening. Libya itself doesn’t trade in the CDS market (no debt outstanding) but Morocco, a more liberal North African country, does. Its spreads widened
beyond 200bp today, approaching the levels it reached at the peak of the “Jasmine Revolution” in Tunisia late last month.
http://jlne.ws/erTQ9L
Case-Shiller: US House Prices Are Closing In On the Post-Bubble Trough
Credit Writedowns
The S&P/Case Shiller Home Price Indices shows that house prices in the U.S. continue to decline this winter. For data through December 2010, the broad Composite-20 index is down 2.4% compared to December 2009. The Composite-10 index is down 1.2% in that time frame. While these numbers were in line with expectations, they point to a continuing double dip in housing.
http://jlne.ws/eayxKa
Fed Buys $7.24 Billion In POMO
Federal Reserve Bank of New York Release
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://jlne.ws/dcRpcM
Experts: U.S. Fed Mishandled International Dimensions Of QE2
The Federal Reserve Board initially mishandled its controversial effort to boost the U.S. economy with government bond purchases, but has since taken some smart steps to make up for the mishap, according to senior economists.
http://jlne.ws/fjxm17
FSA fines Deutsche Bank mortgage division
FT.com
DB Mortgages, the lending arm of Deutsche Bank, has been fined £840,000 ($1.4m) and ordered to pay customers £1.5m by the Financial Services Authority for “irresponsible lending practises” in the years leading up to the financial crisis. The penalty imposed by the FSA is the first time the regulator has taken enforcement action against a firm for irresponsible mortgage lending.
http://jlne.ws/hUNVWt
US Consumer Confidence Rising
International Business Times
The US Consumer Confidence rose in February to 70.4; better than the predicted 65.0 and thr prior reading of 60.6.
http://jlne.ws/ft6mEP
Inflation and interest rates: Mervyn's dilemma
The Economist
FOR many years the job of the Bank of England’s monetary-policy committee (MPC) seemed straightforward. The knocks that from time to time pushed the economy off its path of steady growth tended to shove inflation downward, too.
http://jlne.ws/i4Ekn7
IOSCO identifies benefits of organised platform derivatives trading
Thaipr.net
The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a Report on Trading of OTC Derivatives. The report analyses the benefits, costs, and challenge
http://jlne.ws/fR6lFm
Banks to Thwart CFTC Rule on Open Swap Trades, Oliver Wyman Says
By Matthew Leising, Bloomberg
A Commodity Futures Trading Commission plan to ensure open access to swap-trading systems will be thwarted by banks, who want to exclude customers and trade only among themselves in a part of the market, according to consulting firm Oliver Wyman.
http://jlne.ws/fxUvr3
Geithner Called Fannie Mae, Freddie Mac Biggest 'Moral Hazard'
Bloomberg
U.S. Treasury Secretary Timothy F. Geithner said government-sponsored mortgage giants Fannie Mae and Freddie Mac were the biggest sources of "moral hazard," leading investors to count on a bailout for risks gone wrong.
http://jlne.ws/gwiGNf
G-20 Statement By U.S. Treasury Secretary Timothy F. Geithner
Press Release
http://jlne.ws/g5L2OI
Weber sets Germany on collision course with EU
By Ralph Atkins, Financial Times
Axel Weber, Germany’s departing Bundesbank president, has put his country on a collision course with its eurozone partners by opposing a central part of proposals for resolving future sovereign debt crises.
http://jlne.ws/h9VCla
Europe’s reforms may come at a high price
By Axel Weber, Financial Times
In the coming weeks, European policymakers will have to decide on an overhaul of governance of the European monetary union. As a guiding principle the European Council has clearly – and, in my view, rightly – stated that the main foundations of EMU and the European Union treaty have to be respected. This means the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU. In this context, what cornerstones are to be considered in the matter of reforming EMU governance?
http://jlne.ws/h5pw3s
JPMorgan Says It Was Tricked Into Keeping Lehman's `Goat Poo' Collateral
By David McLaughlin, Bloomberg
Lehman Brothers Holdings Inc. tricked JPMorgan Chase & Co. into holding onto collateral that the bankrupt investment firm internally described as “goat poo,” according to a court filing by JPMorgan.
http://jlne.ws/gurCfx
ZFS in LatAm insurance tie-up with Santander
By FT reporters
Zurich Financial Services has bought a 51 per cent stake in the Latin American insurance operations of Spain’s Santander, the Swiss insurer said on Tuesday.
http://jlne.ws/i7X5Fb
Bank of America restates card unit results
By Justin Baer in New York, Financial Times
Bank of America has revised the results of its international credit card business for the last two years, adding a $20.3bn non-cash goodwill writedown in 2009 while reversing a $10.4bn charge made last year.
http://jlne.ws/fY2DEU
RBS to sell £1.6 billion of unwanted loans - report
Interactive Investor
Royal Bank of Scotland ( RBS.L ) is planning to sell 1.6 billion pounds of unwanted loans from the boom years of the commercial real estate sector, the Financial Times said on Monday.
http://jlne.ws/aGJ9oq
RBS chief: I won't bow to pay pressure
Scotland on Sunday
ROYAL Bank of Scotland chief executive Stephen Hester has become embroiled in an internal dispute with advisers over remuneration, telling them he will not commit the bank to being at the bottom of the pay league.
http://jlne.ws/g3FDDJ
Citigroup pays top execs bonuses
The Star
NEW YORK: Citigroup, recovering after a series of government bailouts, will pay some top executives millions of dollars of cash bonuses if its core operations earn at least US$12bil before taxes over the next two years.
http://jlne.ws/eOtDI3
Barclays' corporation tax bill blunts Bob Diamond's sparkling words
AFP Telegraph Finance News via Yahoo! UK & Ireland Finance
Push Bob Diamond hard enough and he comes up with this sort of stuff: "I think payment of tax is an important responsibility of businesses, yes." That's what the £9m-a-year Barclays (LSE: BARC.L - news) chief executive said to the Treasury Select Committee on January 11, when he had a little mental block over how much corporation tax the bank paid in 2009.
http://jlne.ws/faXpyf
Barclays criticised over UK tax bill
Yahoo! Finance
Barclays bank has revealed it paid STG113 million ($A180 million) in corporation tax in Britain in 2009, about 2.45 per cent of its profits that year, sparking strong criticism on Saturday.Opposition lawmaker ...
http://jlne.ws/hgktAa
US arrests Swiss banker in tax probe
By Kara Scannell and Justin Baer in New York and Haig Simonian in Zurich, Financial Times
A Credit Suisse banker has been arrested in connection with a long-running US tax evasion investigation and could be one of several individuals likely to face charges this week as prosecutors turn their focus from institutions to bankers and wealthy clients, said people familiar with the matter.
http://jlne.ws/hSFtJP
HSBC Amanah is Euromoney's Best International Islamic Bank for second year
Zawya
HSBC Amanah HSBC Amanah has again been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2011. The awards are widely considered to be the most high profile accolades in the Islamic finance industry and annually recognise outstanding performance, quality, service, and innovation in the sector.
http://jlne.ws/fYH95m
Banking titan J. Christopher Flowers describes financial meltdown from the inside
Naples Daily News
Cautious optimism was on the agenda at Friday afternoon's Forum Club lecture, given by finance industry veteran J. Christopher Flowers. The full house that packed Naples Beach Hotel's ballroom listened with rapt attention as Flowers described the September 2008 financial meltdown - a meltdown he saw from the inside while actively trying to save some of America's largest financial institutions.
http://jlne.ws/fDfTtu
LCH.Clearnet’s SwapClear Futures Commission Merchant Service set to go Live for U.S. Customers
Press Release - February. 22, 2011
LCH.Clearnet Ltd (LCH.Clearnet), the world’s leading independent clearing house, will launch its SwapClear Futures Commission Merchant (FCM) service for U.S. clients on March 8, 2011, as all regulatory requirements are now complete. LCH.Clearnet has been a CFTC registered Derivatives Clearing Organization clearing OTC interest rate swaps (IRS) since 2001 and, in 2010, cleared over 120,000 trades involving U.S counterparties, with a notional value of over $64 trillion.
U.S. customers will access LCH.Clearnet’s SwapClear service through a U.S.-based FCM of their choice. This is an important milestone in SwapClear’s supporting compliance by U.S. customers with the range of provisions foreseen within the terms of the Dodd-Frank Act. SwapClear hereby offers end-user clients the centralized clearing of an unparalleled range of OTC IRS via the well-established FCM network under CFTC regulation.
“SwapClear sets the standard globally for OTC clearing,” said Floyd Converse, Head of U.S. SwapClear Sales and Marketing. “Beginning on March 8, U.S. clients will be able to access SwapClear’s unique expertise and product range within the security of the familiar FCM framework.”
The SwapClear FCM model will offer U.S. customers several key benefits, including:
* Reduced counterparty risk
* Default protection
* Proven default management expertise
* Portability of client collateral and positions
* Initial margin collateral held solely in the U.S. and fully subject to U.S. law and the CEA
In addition, SwapClear’s U.S. customers will benefit from the service’s broad product range, which covers over 90% of the “plain vanilla” IRS market, and which will be expanded in 2011 to cover U.S. dollar denominated amortizing swaps. SwapClear currently clears trades in 14 currencies and tenors out to 50 years.
Established more than 11 years ago, SwapClear is the only truly global clearing service for IRS. Since launch in 1999, it has cleared close to 1.5 million OTC IRS trades, approximately 35% of which are U.S. dollar denominated. SwapClear currently has 37 clearing members and its portfolio contains 850,000 trades with a notional value in excess of $252 trillion, down from $291 trillion as a result of terminating $39 trillion cleared IRS transactions through on-going compression. It is the only OTC clearing service to have successfully handled a significant OTC default, when it resolved Lehman Brothers’ $9 trillion IRS default in 2008. In that instance, SwapClear’s default management process ensured that more than 66,000 trades in 5 currencies were hedged and auctioned to other clearing members. SwapClear’s process resulted in no loss to any market participants.
In June 2010, following extensive industry consultation, LCH.Clearnet became the first derivatives clearinghouse in the world to use overnight index swap (OIS) rate curves to discount IRS. This important step not only ensured the highest standards of risk management within a CCP; it has also increased certainty and transparency in the interest rate swap market more generally. This type of industry thought leadership was recognized by Risk Magazine in naming LCH.Clearnet 2011 Clearing House of the Year in its Risk Awards.
About LCH.Clearnet
LCH.Clearnet (then The London Produce Clearing House Limited) began clearing commodity futures in 1888. Today it is the leading independent clearing house group, serving major international exchanges and platforms, as well as a range of OTC markets. It clears a broad range of asset classes including: securities, exchange traded derivatives, energy, freight, interest rate swaps and euro and sterling denominated bonds and repos; and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.
A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, reducing risk, facilitating trading and increasing confidence within the market.
Initial and variation margin (both collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, who assess a member’s positions and market risk on a daily basis; in IRS, 6 times intraday. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times.
LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.
LCH.Clearnet Ltd (LCH.Clearnet), the world’s leading independent clearing house, will launch its SwapClear Futures Commission Merchant (FCM) service for U.S. clients on March 8, 2011, as all regulatory requirements are now complete. LCH.Clearnet has been a CFTC registered Derivatives Clearing Organization clearing OTC interest rate swaps (IRS) since 2001 and, in 2010, cleared over 120,000 trades involving U.S counterparties, with a notional value of over $64 trillion.
U.S. customers will access LCH.Clearnet’s SwapClear service through a U.S.-based FCM of their choice. This is an important milestone in SwapClear’s supporting compliance by U.S. customers with the range of provisions foreseen within the terms of the Dodd-Frank Act. SwapClear hereby offers end-user clients the centralized clearing of an unparalleled range of OTC IRS via the well-established FCM network under CFTC regulation.
“SwapClear sets the standard globally for OTC clearing,” said Floyd Converse, Head of U.S. SwapClear Sales and Marketing. “Beginning on March 8, U.S. clients will be able to access SwapClear’s unique expertise and product range within the security of the familiar FCM framework.”
The SwapClear FCM model will offer U.S. customers several key benefits, including:
* Reduced counterparty risk
* Default protection
* Proven default management expertise
* Portability of client collateral and positions
* Initial margin collateral held solely in the U.S. and fully subject to U.S. law and the CEA
In addition, SwapClear’s U.S. customers will benefit from the service’s broad product range, which covers over 90% of the “plain vanilla” IRS market, and which will be expanded in 2011 to cover U.S. dollar denominated amortizing swaps. SwapClear currently clears trades in 14 currencies and tenors out to 50 years.
Established more than 11 years ago, SwapClear is the only truly global clearing service for IRS. Since launch in 1999, it has cleared close to 1.5 million OTC IRS trades, approximately 35% of which are U.S. dollar denominated. SwapClear currently has 37 clearing members and its portfolio contains 850,000 trades with a notional value in excess of $252 trillion, down from $291 trillion as a result of terminating $39 trillion cleared IRS transactions through on-going compression. It is the only OTC clearing service to have successfully handled a significant OTC default, when it resolved Lehman Brothers’ $9 trillion IRS default in 2008. In that instance, SwapClear’s default management process ensured that more than 66,000 trades in 5 currencies were hedged and auctioned to other clearing members. SwapClear’s process resulted in no loss to any market participants.
In June 2010, following extensive industry consultation, LCH.Clearnet became the first derivatives clearinghouse in the world to use overnight index swap (OIS) rate curves to discount IRS. This important step not only ensured the highest standards of risk management within a CCP; it has also increased certainty and transparency in the interest rate swap market more generally. This type of industry thought leadership was recognized by Risk Magazine in naming LCH.Clearnet 2011 Clearing House of the Year in its Risk Awards.
About LCH.Clearnet
LCH.Clearnet (then The London Produce Clearing House Limited) began clearing commodity futures in 1888. Today it is the leading independent clearing house group, serving major international exchanges and platforms, as well as a range of OTC markets. It clears a broad range of asset classes including: securities, exchange traded derivatives, energy, freight, interest rate swaps and euro and sterling denominated bonds and repos; and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.
A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, reducing risk, facilitating trading and increasing confidence within the market.
Initial and variation margin (both collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, who assess a member’s positions and market risk on a daily basis; in IRS, 6 times intraday. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times.
LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.
Jumat, 18 Februari 2011
Top Interest Rate Headlines 02-18-11: ECB Overnight Lending Rockets To 19-Month High
ECB overnight lending rockets to 19-month high
http://jlne.ws/gacYi0
China Central Bank Raises Reserve Requirement
http://jlne.ws/f0nlCB
Bernanke Defends Fed Policies
http://jlne.ws/guChL2
Free Trade Agreements Good for U.S. Jobs: U.S. Commerce Sec.
http://jlne.ws/eHdEDH
Bahrain Credit Risk Rises for Fifth Day as Unrest Intensifies
http://jlne.ws/e1LZec
Banks Find Loophole on Capital Rule
By DAVID ENRICH in London - WSJ
Some foreign banks are moving to restructure their U.S. operations to avoid one of the most-burdensome requirements of the new Dodd-Frank law. In November, Barclays PLC quietly changed the legal classification of the U.K. bank's main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.
http://jlne.ws/eJiwfn
Mutual Funds' Muni-Debt Prices Are Questioned
By JEAN EAGLESHAM, MICHAEL CORKERY And CARRICK MOLLENKAMP - WSJ
The Securities and Exchange Commission is investigating whether some mutual funds have overstated the value of risky municipal bonds that are thinly traded, according to people familiar with the matter.
http://jlne.ws/gHCjvc
U.S. Republicans push to delay Dodd-Frank reforms
National Post
Republicans escalated their push to delay and defund the Dodd-Frank Wall Street reforms on Thursday as top regulators appeared before the U.S. Senate Banking Committee with a new chairman presiding
http://jlne.ws/gBrVzG
CFTC butts heads with Shelby on funding
Market Watch
WASHINGTON (MarketWatch) -- Commodity Futures Trading Commission Chairman Gary Gensler on Thursday took issue with criticism from Republican Sen. Richard Shelby of Alabama who complained that the CFTC failed to hire a chief economist in a timely manner. Gensler acknowledged that the agency took a long time to fill a chief economist slot, but said that cuts to the agency's budget would mean ...
http://jlne.ws/fcm2DD
Consumer Watchdog Hires Former Bankers
By BEN PROTESS - NY Times
As the new federal consumer watchdog agency takes shape, Wall Street might see a few familiar faces on its roster. Elizabeth Warren, the Harvard University law professor who is setting up the Consumer Financial Protection Bureau, announced her latest string of hires on Thursday, including former managing directors at Deutsche Bank and Morgan Stanley.
http://jlne.ws/h2LiR4
CME Group Fed Funds Futures Go Green: February 28, 2011
Press Release
Beginning Sunday, February 27, 2011 (trade date Monday, February 28, 2011), CME Group will extend the listing cycle of 30-Day Fed Funds futures by offering a third year of monthly expirations, effectively listing 36 consecutive monthly expiries for trading. The "Green" Fed Funds futures expirations will be traded both on CME Globex and in open outcry.
http://jlne.ws/ec4oB9
Citigroup's Pandit Says U.S. Rules May Squeeze Credit
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said new U.S. banking rules may mean tighter credit and less access for borrowers because of costs imposed on lenders.
http://jlne.ws/hyemGP
NY pension scammer is heading to prison
CNN Money
Henry "Hank" Morris, one of the masterminds of a pay-to-play scandal involving the New York state pension system, today was sentenced to up to four years in prison. He also agreed to repay $19 million in ill-gotten gains, and to be permanently banned from the securities industry in New York State.
http://jlne.ws/i2U1Vz
http://jlne.ws/gacYi0
China Central Bank Raises Reserve Requirement
http://jlne.ws/f0nlCB
Bernanke Defends Fed Policies
http://jlne.ws/guChL2
Free Trade Agreements Good for U.S. Jobs: U.S. Commerce Sec.
http://jlne.ws/eHdEDH
Bahrain Credit Risk Rises for Fifth Day as Unrest Intensifies
http://jlne.ws/e1LZec
Banks Find Loophole on Capital Rule
By DAVID ENRICH in London - WSJ
Some foreign banks are moving to restructure their U.S. operations to avoid one of the most-burdensome requirements of the new Dodd-Frank law. In November, Barclays PLC quietly changed the legal classification of the U.K. bank's main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.
http://jlne.ws/eJiwfn
Mutual Funds' Muni-Debt Prices Are Questioned
By JEAN EAGLESHAM, MICHAEL CORKERY And CARRICK MOLLENKAMP - WSJ
The Securities and Exchange Commission is investigating whether some mutual funds have overstated the value of risky municipal bonds that are thinly traded, according to people familiar with the matter.
http://jlne.ws/gHCjvc
U.S. Republicans push to delay Dodd-Frank reforms
National Post
Republicans escalated their push to delay and defund the Dodd-Frank Wall Street reforms on Thursday as top regulators appeared before the U.S. Senate Banking Committee with a new chairman presiding
http://jlne.ws/gBrVzG
CFTC butts heads with Shelby on funding
Market Watch
WASHINGTON (MarketWatch) -- Commodity Futures Trading Commission Chairman Gary Gensler on Thursday took issue with criticism from Republican Sen. Richard Shelby of Alabama who complained that the CFTC failed to hire a chief economist in a timely manner. Gensler acknowledged that the agency took a long time to fill a chief economist slot, but said that cuts to the agency's budget would mean ...
http://jlne.ws/fcm2DD
Consumer Watchdog Hires Former Bankers
By BEN PROTESS - NY Times
As the new federal consumer watchdog agency takes shape, Wall Street might see a few familiar faces on its roster. Elizabeth Warren, the Harvard University law professor who is setting up the Consumer Financial Protection Bureau, announced her latest string of hires on Thursday, including former managing directors at Deutsche Bank and Morgan Stanley.
http://jlne.ws/h2LiR4
CME Group Fed Funds Futures Go Green: February 28, 2011
Press Release
Beginning Sunday, February 27, 2011 (trade date Monday, February 28, 2011), CME Group will extend the listing cycle of 30-Day Fed Funds futures by offering a third year of monthly expirations, effectively listing 36 consecutive monthly expiries for trading. The "Green" Fed Funds futures expirations will be traded both on CME Globex and in open outcry.
http://jlne.ws/ec4oB9
Citigroup's Pandit Says U.S. Rules May Squeeze Credit
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said new U.S. banking rules may mean tighter credit and less access for borrowers because of costs imposed on lenders.
http://jlne.ws/hyemGP
NY pension scammer is heading to prison
CNN Money
Henry "Hank" Morris, one of the masterminds of a pay-to-play scandal involving the New York state pension system, today was sentenced to up to four years in prison. He also agreed to repay $19 million in ill-gotten gains, and to be permanently banned from the securities industry in New York State.
http://jlne.ws/i2U1Vz
Rabu, 16 Februari 2011
Top Interest Rate Headlines 02-16-11: Wholesale Prices Hit Two-Year High
Wholesale Prices Hit Two-Year High
BY JEFF BATER AND LUCA DI LEO, WSJ.com
Underlying wholesale prices in the U.S. climbed during January to their highest in more than two years as prescription prices rose, which may raise concerns about inflation as the economy accelerates.
http://jlne.ws/gnfLql
Goldman Sachs winding down prop-trading desk
The Wall Street Journal/Financial News
Goldman Sachs is winding down its global macro proprietary trading desk, according to a person familiar with the matter.
http://jlne.ws/ghHk4o
Goldman Sachs Said to Close Fixed-Income Prop-Trading Group
BusinessWeek
Goldman Sachs Group Inc., the U.S. bank that relies on fixed-income trading for the largest portion of its revenue, will shut its Global Macro Proprietary Trading desk, a person familiar with the decision said.
http://jlne.ws/eFgaO1
DTCC To Launch Service To Automate Matching Of Broker-To-Broker Trades
Press Release
The Depository Trust & Clearing Corporation (DTCC) announced today plans to launch Obligation Warehouse (OW) to automate the matching and confirmation of broker-to-broker trades that are currently confirmed and settled directly between the trading parties rather than through DTCC (known as ex-clearing), and to give Member firms real-time access to track, manage and resolve their failed obligations.
http://jlne.ws/fAJMTC
DTCC: Continued Cooperation Between Global Regulators and Market Participants Key To Enhancing Transparency In The OTC Derivatives Market
Press Release
Washington, D.C., February 15, 2011 – Donald F. Donahue, chairman and chief executive officer of The Depository Trust & Clearing Corporation (DTCC), today called continued cooperation between global regulators and market participants essential to enhancing transparency in the over-the-counter (OTC) derivatives market.
http://jlne.ws/gWfvF6
New York Fed purchases $1.890 billion in Treasury coupons
Press Release
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://jlne.ws/dF3mSP
Geithner Sees China Shifting on Yuan
BY SIOBHAN HUGHES ,WSJ.com
U.S. Treasury Secretary Timothy Geithner said Wednesday he thinks China's policy makers have made a decision to allow the nation's currency to rise as inflation flares up in the Asian country.
http://jlne.ws/fhtI5o
G-20 Frets Over Inflation, Sovereign Debt
WSJ.com
Top officials from the Group of 20 industrialized and developing nations have agreed to draw up a "limited set" of indicators aimed at curbing global economic imbalances and better coordinate economic policies, but have yet to decide what those indicators will be, according to an early draft of a statement due to be released by the G-20 on Saturday.
http://jlne.ws/eQ8kge
Merkel Names Adviser to Head German Central Bank
By JUDY DEMPSEY, The New York Times
Chancellor Angela Merkel on Wednesday named a trusted economics adviser, Jens Weidmann, to be the next head of the German central bank in Frankfurt, leaving a big gap back in Berlin as she attempts to lead Europe out of its sovereign debt crisis.
http://jlne.ws/g3PDYD
Weidmann set for Bundesbank presidency
By Quentin Peel in Berlin and Ralph Atkins in Frankfurt -Financial Times
Germany’s ruling centre-right coalition parties are expected to agree this week to appoint Jens Weidmann, chief economic adviser to Angela Merkel, the German chancellor, as the youngest president of the Bundesbank.
http://jlne.ws/gSvAGC
Bahrain cbank official says unrest won't affect economy
By Stanley Carvalho, Reuters
Protests in Bahrain, which continued for a third day on Wednesday, will not affect the Gulf state's economy or financial sector, a Bahraini central bank official said.
http://jlne.ws/hesLqK
Regulators Try to Calm Republican Swaps Fears
Finance Technology Network
Financial regulators tried to calm fears that new rules for the $600 trillion over-the-counter derivatives market would raise costs for businesses that use the instruments to hedge risk.
http://jlne.ws/eKdztg
Meet the new chief executive of LCH.Clearnet: Ian Axe
Maryam Omidi - Financial News
Ian Axe, a former managing director at Barclays Capital, has landed the top job at LCH.Clearnet, Europe’s largest independent clearing house, as competition mounts in the post-trade clearing market.
http://jlne.ws/eZSerz
Citigroup Hires The Man Who Almost Screwed Up One Of JPMorgan's Biggest Deals
Business Insider
Citigroup has hired the man who spilled the beans on a big bank merger JPMorgan was advising on, Thomas Woodley Heath III, to be a managing director in its North American financial institution group.
http://jlne.ws/ebu8KG
Barclays bank sees 2010 profits surge, cuts bonuses
Straits Times
LONDON - BRITISH bank Barclays said on Tuesday that annual profits soared by more than a third, as bad debts fell dramatically, and cut its staff bonuses in line with a government-brokered deal. Pre-tax profits leapt 33 per cent to 6.08 billion pounds (S$12.56 billion) last year, compared with 4.559 billion pounds in 2009, the group said in a results statement.
http://jlne.ws/gwBIXm
Jamie Dimon: I'm Not Leaving JPMorgan
Forbes
Just because JPMorgan's CEO likes visiting The White House and eats out with GOP leaders doesn't mean he's leaving his post to open his own restaurant, or enter politics.
http://jlne.ws/h3Ujrz
Testimony Of CFTC Chairman Gary Gensler Before The House Committee On Financial Services
Press Release
http://jlne.ws/him6Yb
Gross's Ex-Rainmaker Recruits Pimco Alumni as Bond Rally Falters
Bloomberg
John Hague , who helped Bill Gross build Pacific Investment Management Co. into the manager of the biggest mutual fund, is recruiting former colleagues for a firm to pursue more aggressive strategies as the bond rally fizzles.
http://jlne.ws/hcMyz9
BY JEFF BATER AND LUCA DI LEO, WSJ.com
Underlying wholesale prices in the U.S. climbed during January to their highest in more than two years as prescription prices rose, which may raise concerns about inflation as the economy accelerates.
http://jlne.ws/gnfLql
Goldman Sachs winding down prop-trading desk
The Wall Street Journal/Financial News
Goldman Sachs is winding down its global macro proprietary trading desk, according to a person familiar with the matter.
http://jlne.ws/ghHk4o
Goldman Sachs Said to Close Fixed-Income Prop-Trading Group
BusinessWeek
Goldman Sachs Group Inc., the U.S. bank that relies on fixed-income trading for the largest portion of its revenue, will shut its Global Macro Proprietary Trading desk, a person familiar with the decision said.
http://jlne.ws/eFgaO1
DTCC To Launch Service To Automate Matching Of Broker-To-Broker Trades
Press Release
The Depository Trust & Clearing Corporation (DTCC) announced today plans to launch Obligation Warehouse (OW) to automate the matching and confirmation of broker-to-broker trades that are currently confirmed and settled directly between the trading parties rather than through DTCC (known as ex-clearing), and to give Member firms real-time access to track, manage and resolve their failed obligations.
http://jlne.ws/fAJMTC
DTCC: Continued Cooperation Between Global Regulators and Market Participants Key To Enhancing Transparency In The OTC Derivatives Market
Press Release
Washington, D.C., February 15, 2011 – Donald F. Donahue, chairman and chief executive officer of The Depository Trust & Clearing Corporation (DTCC), today called continued cooperation between global regulators and market participants essential to enhancing transparency in the over-the-counter (OTC) derivatives market.
http://jlne.ws/gWfvF6
New York Fed purchases $1.890 billion in Treasury coupons
Press Release
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://jlne.ws/dF3mSP
Geithner Sees China Shifting on Yuan
BY SIOBHAN HUGHES ,WSJ.com
U.S. Treasury Secretary Timothy Geithner said Wednesday he thinks China's policy makers have made a decision to allow the nation's currency to rise as inflation flares up in the Asian country.
http://jlne.ws/fhtI5o
G-20 Frets Over Inflation, Sovereign Debt
WSJ.com
Top officials from the Group of 20 industrialized and developing nations have agreed to draw up a "limited set" of indicators aimed at curbing global economic imbalances and better coordinate economic policies, but have yet to decide what those indicators will be, according to an early draft of a statement due to be released by the G-20 on Saturday.
http://jlne.ws/eQ8kge
Merkel Names Adviser to Head German Central Bank
By JUDY DEMPSEY, The New York Times
Chancellor Angela Merkel on Wednesday named a trusted economics adviser, Jens Weidmann, to be the next head of the German central bank in Frankfurt, leaving a big gap back in Berlin as she attempts to lead Europe out of its sovereign debt crisis.
http://jlne.ws/g3PDYD
Weidmann set for Bundesbank presidency
By Quentin Peel in Berlin and Ralph Atkins in Frankfurt -Financial Times
Germany’s ruling centre-right coalition parties are expected to agree this week to appoint Jens Weidmann, chief economic adviser to Angela Merkel, the German chancellor, as the youngest president of the Bundesbank.
http://jlne.ws/gSvAGC
Bahrain cbank official says unrest won't affect economy
By Stanley Carvalho, Reuters
Protests in Bahrain, which continued for a third day on Wednesday, will not affect the Gulf state's economy or financial sector, a Bahraini central bank official said.
http://jlne.ws/hesLqK
Regulators Try to Calm Republican Swaps Fears
Finance Technology Network
Financial regulators tried to calm fears that new rules for the $600 trillion over-the-counter derivatives market would raise costs for businesses that use the instruments to hedge risk.
http://jlne.ws/eKdztg
Meet the new chief executive of LCH.Clearnet: Ian Axe
Maryam Omidi - Financial News
Ian Axe, a former managing director at Barclays Capital, has landed the top job at LCH.Clearnet, Europe’s largest independent clearing house, as competition mounts in the post-trade clearing market.
http://jlne.ws/eZSerz
Citigroup Hires The Man Who Almost Screwed Up One Of JPMorgan's Biggest Deals
Business Insider
Citigroup has hired the man who spilled the beans on a big bank merger JPMorgan was advising on, Thomas Woodley Heath III, to be a managing director in its North American financial institution group.
http://jlne.ws/ebu8KG
Barclays bank sees 2010 profits surge, cuts bonuses
Straits Times
LONDON - BRITISH bank Barclays said on Tuesday that annual profits soared by more than a third, as bad debts fell dramatically, and cut its staff bonuses in line with a government-brokered deal. Pre-tax profits leapt 33 per cent to 6.08 billion pounds (S$12.56 billion) last year, compared with 4.559 billion pounds in 2009, the group said in a results statement.
http://jlne.ws/gwBIXm
Jamie Dimon: I'm Not Leaving JPMorgan
Forbes
Just because JPMorgan's CEO likes visiting The White House and eats out with GOP leaders doesn't mean he's leaving his post to open his own restaurant, or enter politics.
http://jlne.ws/h3Ujrz
Testimony Of CFTC Chairman Gary Gensler Before The House Committee On Financial Services
Press Release
http://jlne.ws/him6Yb
Gross's Ex-Rainmaker Recruits Pimco Alumni as Bond Rally Falters
Bloomberg
John Hague , who helped Bill Gross build Pacific Investment Management Co. into the manager of the biggest mutual fund, is recruiting former colleagues for a firm to pursue more aggressive strategies as the bond rally fizzles.
http://jlne.ws/hcMyz9
Selasa, 15 Februari 2011
Top Interest Rate Headlines 02-15-11: Showtime For House Republican Spending Cuts
Showtime for House Republican spending cuts
By Richard Cowan, Reuters
One day after President Barack Obama presented Congress with his $3.7 trillion budget, the focus shifts on Tuesday to Washington's more immediate spending needs and a controversial spending-cut bill that Republicans hope to pass in the House of Representatives.
http://jlne.ws/gbufOI
Brazil Finance Chief Renews Attack on Fed
By Brenda Cronin, WSJ.com
Brazilian Finance Minister Guido Mantega on Tuesday renewed his attack on the Federal Reserve’s most recent program of quantitative easing, saying the policy had goosed global flows of hot capital and heightened the global problems of rising commodity prices and inflation.
http://jlne.ws/h5oMl5
LCH.Clearnet announces new Chief Executive
London, 15 February 2011--LCH.Clearnet Group (LCH.Clearnet), the world's leading independent clearing house group, has appointed Ian Axe as chief executive of both LCH.Clearnet Group Limited (the group holding company) and LCH.Clearnet Limited (the UK based subsidiary). Mr Axe joins from Barclays Capital where he was most recently global head of operations and COO EMEA. He will replace Roger Liddell, who has been chief executive since July 2006 and who announced his intention to retire in July 2010.
http://jlne.ws/gOzbJb
BGC Partners Completes First Fully Electronic Australian Dollar Interest Rate Swap Transaction on BGC Trader
Feb. 13, 2011 (Business Wire) —BGC Partners, Inc. (Nasdaq: BGCP) (“BGC”), a leading global intermediary to the wholesale financial markets, announces its first fully electronic Australian Dollar Interest Rate Swap (IRS) trade using BGC’s award-winning Volume Match tool on the BGC™ Trader platform.
http://jlne.ws/dNMoFH
Fed bought $6.689 bln Tsys due to mature between 2/28/15 and 8/15/16
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system
http://jlne.ws/dcRpcM
Global Demand for U.S. Assets Declined in December
By Vincent Del Giudice, Bloomberg
Global demand for U.S. stocks, bonds and other financial assets fell in December from a month earlier, the Treasury Department reported.
http://jlne.ws/fNxzrL
Turkey Leaves Rates on Hold
BY ERKAN OZ, WSJ.com
Turkey's central bank held its key interest rate at a record low on Tuesday, pausing its controversial policy of cutting rates as central banks in other emerging markets raise theirs.
http://jlne.ws/eUwXNY
Warren Buffett Speaks Out About the Financial Crisis
The Motley Fool
Where we came from, what we went through, and where we're going next.
http://jlne.ws/hmEHyD
U.S. Banks Say Fed Should Scrap Proposed Debit Caps
BusinessWeek
The Federal Reserve Board's proposed caps on debit-card transaction fees have drawn "broad and deep opposition" from U.S. banks and payment networks and should be withdrawn, according to an industry panel.
http://jlne.ws/fPcT6f
Ben's 'deathbed' defense
New York Post
Federal Reserve Chairman Ben S. Bernanke said he would defend to his "deathbed" his actions prior to the bankruptcy of Lehman Brothers Holdings Inc., in an interview with the commission probing the causes of the financial crisis. "I will maintain to my deathbed, that we made every effort to save...
http://jlne.ws/heIzC2
CME signs up dealers for swap clearing
By Michael Mackenzie in New York and Hal Weitzman in Chicago - Financial Times
CME Group announced on Monday that is has signed up a group of 10 global swap dealers as founding members for its clearing service for over-the-counter interest-rate swaps. This brings together a host of big dealers with buyside investment firms including BlackRock, Citadel, Fannie Mae, Freddie Mac, and Pimco. Since the CME clearing service was launched last October, it has cleared just under $1bn in gross notional value.
http://jlne.ws/hqaPJp
RTS Launches Trading In Futures On Federal Loan Bonds Basket
Press Release
On February 17, 2011 trading in futures contracts on a basket of federal loan bonds will start on FORTS, options and futures market of OJSC RTS.
http://jlne.ws/gFuySF
Barclays beats forecasts with 32% rise
By Adam Jones - Financial Times
Barclays increased its profit from continuing operations by a third in 2010, while awarding £3.4bn of bonuses and other performance-related payments to staff. Bob Diamond, the bank’s new chief executive, also announced on Tuesday that he would increase the pace and intensity of efforts to improve its financial performance in a tightening regulatory environment.
http://jlne.ws/fAXdnh
Gates Foundation Reports No Position In Goldman Sachs
By Steven D. Jones
The Bill and Melinda Gates Foundation, the world's largest private philanthropy, made few significant adjustments to its portfolio in the last quarter of 2010, with the exception of eliminating its position in Goldman Sachs Group Inc. (GS).
http://jlne.ws/fBeLUC
BNP Paribas, Citigroup Suspend Ivory Coast Operations
Dow Jones
Two international banks have temporarily suspended operations in Ivory Coast, after the Central Bank of West African States warned banks in the region Friday that dealing with the disputed Ivory Coast regime of Laurent Gbagbo makes them open to sanctions.
http://jlne.ws/gqnzYl
EU banks to get ‘single rulebook’
By Brooke Masters and Patrick Jenkins in London - Financial Times
The head of the European Union’s new banking authority has warned that he plans to use the “true power” of a single set of rules to impose more uniform oversight on banks. The move potentially emasculates national regulators in EU member states, such as the UK’s Financial Services Authority. Some bankers fear it may harm innovation and competitiveness.
http://jlne.ws/frESDu
DTCC Launches Portal Providing Regulators Globally Direct, on-line Access to CDS Data and Tailored Reporting
Press Release
LONDON & NEW YORK--(EON: Enhanced Online News)--The Depository Trust & Clearing Corporation (DTCC), announced today, that it has launched an automated portal to provide regulators worldwide with direct, on-line access to global credit default swap (CDS) data registered in DTCC’s Warehouse Trust Company LLC (Warehouse Trust) global repository.
http://jlne.ws/fuyrwR
Even Paulson’s Friends Pitied His Subprime Bet
NY Times
In a 2010 interview with the crisis commission, John Paulson reveals just how much flack he got from peers for his subprime bet — which netted his hedge fund firm $15 billion.
http://jlne.ws/htCAD7
BankMuscat to offer payments in Chinese yuan under tie up with Bank of China
Thaipr.net
BankMuscat, the leading financial services provider in the Sultanate, has become the first Omani bank to enable payments in Chinese currency Remnimbi (RMB) or Yuan (CNY). BankMuscat has opened a Yuan
http://jlne.ws/enQIwn
Man with bat shows up at UBS, demands to see 'president'
Stamford Advocate
STAMFORD -- City police are looking for a man who appeared at UBS' sales and trading headquarters on Washington Boulevard brandished a baseball bat after asking for "the president."
http://jlne.ws/hZlUZ8
By Richard Cowan, Reuters
One day after President Barack Obama presented Congress with his $3.7 trillion budget, the focus shifts on Tuesday to Washington's more immediate spending needs and a controversial spending-cut bill that Republicans hope to pass in the House of Representatives.
http://jlne.ws/gbufOI
Brazil Finance Chief Renews Attack on Fed
By Brenda Cronin, WSJ.com
Brazilian Finance Minister Guido Mantega on Tuesday renewed his attack on the Federal Reserve’s most recent program of quantitative easing, saying the policy had goosed global flows of hot capital and heightened the global problems of rising commodity prices and inflation.
http://jlne.ws/h5oMl5
LCH.Clearnet announces new Chief Executive
London, 15 February 2011--LCH.Clearnet Group (LCH.Clearnet), the world's leading independent clearing house group, has appointed Ian Axe as chief executive of both LCH.Clearnet Group Limited (the group holding company) and LCH.Clearnet Limited (the UK based subsidiary). Mr Axe joins from Barclays Capital where he was most recently global head of operations and COO EMEA. He will replace Roger Liddell, who has been chief executive since July 2006 and who announced his intention to retire in July 2010.
http://jlne.ws/gOzbJb
BGC Partners Completes First Fully Electronic Australian Dollar Interest Rate Swap Transaction on BGC Trader
Feb. 13, 2011 (Business Wire) —BGC Partners, Inc. (Nasdaq: BGCP) (“BGC”), a leading global intermediary to the wholesale financial markets, announces its first fully electronic Australian Dollar Interest Rate Swap (IRS) trade using BGC’s award-winning Volume Match tool on the BGC™ Trader platform.
http://jlne.ws/dNMoFH
Fed bought $6.689 bln Tsys due to mature between 2/28/15 and 8/15/16
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system
http://jlne.ws/dcRpcM
Global Demand for U.S. Assets Declined in December
By Vincent Del Giudice, Bloomberg
Global demand for U.S. stocks, bonds and other financial assets fell in December from a month earlier, the Treasury Department reported.
http://jlne.ws/fNxzrL
Turkey Leaves Rates on Hold
BY ERKAN OZ, WSJ.com
Turkey's central bank held its key interest rate at a record low on Tuesday, pausing its controversial policy of cutting rates as central banks in other emerging markets raise theirs.
http://jlne.ws/eUwXNY
Warren Buffett Speaks Out About the Financial Crisis
The Motley Fool
Where we came from, what we went through, and where we're going next.
http://jlne.ws/hmEHyD
U.S. Banks Say Fed Should Scrap Proposed Debit Caps
BusinessWeek
The Federal Reserve Board's proposed caps on debit-card transaction fees have drawn "broad and deep opposition" from U.S. banks and payment networks and should be withdrawn, according to an industry panel.
http://jlne.ws/fPcT6f
Ben's 'deathbed' defense
New York Post
Federal Reserve Chairman Ben S. Bernanke said he would defend to his "deathbed" his actions prior to the bankruptcy of Lehman Brothers Holdings Inc., in an interview with the commission probing the causes of the financial crisis. "I will maintain to my deathbed, that we made every effort to save...
http://jlne.ws/heIzC2
CME signs up dealers for swap clearing
By Michael Mackenzie in New York and Hal Weitzman in Chicago - Financial Times
CME Group announced on Monday that is has signed up a group of 10 global swap dealers as founding members for its clearing service for over-the-counter interest-rate swaps. This brings together a host of big dealers with buyside investment firms including BlackRock, Citadel, Fannie Mae, Freddie Mac, and Pimco. Since the CME clearing service was launched last October, it has cleared just under $1bn in gross notional value.
http://jlne.ws/hqaPJp
RTS Launches Trading In Futures On Federal Loan Bonds Basket
Press Release
On February 17, 2011 trading in futures contracts on a basket of federal loan bonds will start on FORTS, options and futures market of OJSC RTS.
http://jlne.ws/gFuySF
Barclays beats forecasts with 32% rise
By Adam Jones - Financial Times
Barclays increased its profit from continuing operations by a third in 2010, while awarding £3.4bn of bonuses and other performance-related payments to staff. Bob Diamond, the bank’s new chief executive, also announced on Tuesday that he would increase the pace and intensity of efforts to improve its financial performance in a tightening regulatory environment.
http://jlne.ws/fAXdnh
Gates Foundation Reports No Position In Goldman Sachs
By Steven D. Jones
The Bill and Melinda Gates Foundation, the world's largest private philanthropy, made few significant adjustments to its portfolio in the last quarter of 2010, with the exception of eliminating its position in Goldman Sachs Group Inc. (GS).
http://jlne.ws/fBeLUC
BNP Paribas, Citigroup Suspend Ivory Coast Operations
Dow Jones
Two international banks have temporarily suspended operations in Ivory Coast, after the Central Bank of West African States warned banks in the region Friday that dealing with the disputed Ivory Coast regime of Laurent Gbagbo makes them open to sanctions.
http://jlne.ws/gqnzYl
EU banks to get ‘single rulebook’
By Brooke Masters and Patrick Jenkins in London - Financial Times
The head of the European Union’s new banking authority has warned that he plans to use the “true power” of a single set of rules to impose more uniform oversight on banks. The move potentially emasculates national regulators in EU member states, such as the UK’s Financial Services Authority. Some bankers fear it may harm innovation and competitiveness.
http://jlne.ws/frESDu
DTCC Launches Portal Providing Regulators Globally Direct, on-line Access to CDS Data and Tailored Reporting
Press Release
LONDON & NEW YORK--(EON: Enhanced Online News)--The Depository Trust & Clearing Corporation (DTCC), announced today, that it has launched an automated portal to provide regulators worldwide with direct, on-line access to global credit default swap (CDS) data registered in DTCC’s Warehouse Trust Company LLC (Warehouse Trust) global repository.
http://jlne.ws/fuyrwR
Even Paulson’s Friends Pitied His Subprime Bet
NY Times
In a 2010 interview with the crisis commission, John Paulson reveals just how much flack he got from peers for his subprime bet — which netted his hedge fund firm $15 billion.
http://jlne.ws/htCAD7
BankMuscat to offer payments in Chinese yuan under tie up with Bank of China
Thaipr.net
BankMuscat, the leading financial services provider in the Sultanate, has become the first Omani bank to enable payments in Chinese currency Remnimbi (RMB) or Yuan (CNY). BankMuscat has opened a Yuan
http://jlne.ws/enQIwn
Man with bat shows up at UBS, demands to see 'president'
Stamford Advocate
STAMFORD -- City police are looking for a man who appeared at UBS' sales and trading headquarters on Washington Boulevard brandished a baseball bat after asking for "the president."
http://jlne.ws/hZlUZ8
TABB Says Banks are Making a Major E-Trading Push into US Treasuries
Press Release
New Research Details How Sell Side Firms have Taken the Next Step in the Dealer-to-Client (D2C) E-Trading Evolution, Putting Algorithms on Institutional Clients’ Desktops
NEW YORK & LONDON, February 15, 2011 – Algorithmic trading functionality has finally moved onto buy-side fixed income (FI) trading platforms, says TABB Group in new research published today. Building on the recent overhaul of their internal infrastructure, including liquidity aggregation technologies and auto-quoting logic, a number of major banks are taking the next step in today’s e-trading evolution by putting algorithms directly on their institutional clients’ desktops.
Although algorithmic trading in the liquid fixed income market has been discussed for years, says Adam Sussman, a TABB partner, director of research and author of the new report, “Treasury Trading 2011: Automating the Yield Curve,” major dealers are launching a new generation of trading functionality aimed at bringing a greater amount of automation and sophistication to the buy side. While dealer-to-client (D2C) electronic trading has existed in the form of single- and multi-dealer platforms for the past 10 years, “these new marketed solutions are intended to streamline the execution process through support for limit prices (or spread); algorithmic functionality for multi-leg and cross-asset class orders; implementation of enterprise-wide liquidity management; and automated quoting and internal trade matching.”
According to Sussman, four dealers, each known as a leader in FI, e-trading or both, continue to pour investments into overhauling their FI infrastructure, aggressively pursuing an automated, technology-driven, volume-based business model, also known as flow monsters. Most of the recent focus has been on Treasury notes (T-notes) where overall trading volumes have held up well over the last few years, growing at a 5% compound annual growth rate since 2002. Based on TABB Group estimates, the client component of that volume has been steadily rising during that same time period, from 54% in 2002 to 58% in 2010.
The initial source of demand for this algorithmic functionality is coming from trades such as switches, curves and basis, says Sussman, trades that depend on the efficient execution of two or more securities, limited for now to Treasuries and related futures or swaps. “This new functionality allows traders to pinpoint the amount of risk exposure they’re willing to take on in order to get filled. They can take on more risk in order to put the trade on more quickly or only accept a narrow range of exposure.”
Another twist in the story is the potential impact of derivatives reform on how the cash market trades. The transformation of the swaps market to a more open, transparent market could have unexpected consequences. Banks might seek additional opportunities to aggregate internal liquidity for the purposes of quoting tighter swaps spreads on the Swaps Execution Facility (SEF). The buy side might move more of its rates trading to multi-dealer platforms in response to regulatory reforms. And arbitrage opportunities could increase along with access and transparency, thus driving turnover frequency and volume.
But one thing is clear, he says, “Everyone knows that they can’t afford to sit still. The opportunities in this space are as never-ending as the US federal government’s current debt.”
The 18-page research note with 7 exhibits, based on one-to-one, interview-based conversations with primary dealers, brokers, interdealer brokers, proprietary trading groups, hedge funds and long-only asset managers examines liquidity aggregation; auto-quoting; algorithmic spread trading; buy-side attitudes toward electronic trading; the impact of SEFs on the cash market; and recent product announcements from a number of dealers. It also sizes the portion of Treasury trading that occurs electronically versus the phone and how much market-making is fully automated.
The report is available for download by TABB Group Derivatives Research Alliance clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. For an executive summary or to purchase the report, visit http://www.tabbgroup.com or write to info@tabbgroup.com.
Related US Treasuries research at TABB includes “On-The-Run Treasury Notes: The Benefits of a Tiered Market Structure.” Written by Sussman, it gives a detailed description of US Treasury market structure for on-the-run notes, from the distribution of primary issuance to the dealer-to-client (D2C) platforms. The report drills down into the interdealer platforms, detailing who accesses those markets, how they do so and how changes in matching logic are making platforms look less like auctions and more like order-driven price/time markets. The report also examines how automation in banks’ liquidity provisioning functions is impacting the liquidity discovery process on the D2C platforms.
About TABB Group
TABB Group is the strategic advisory and research firm founded in 2003 and based on the proven interview-based research methodology of “first-person knowledge” developed by founder Larry Tabb. TABB Group analyzes and quantifies the investing value chain from the fiduciary, investment manager, broker, exchange and custodian, helping senior business leaders gain a truer understanding of financial markets issues. For more information, visit www.tabbgroup.com. In January 2010, TABB Group launched TabbFORUM, the online community currently with more than 6,500 capital markets members, drawn from buy side and sell side firms, exchanges, regulatory agencies, academia, vendors and media, focusing on thought leadership issues covering current industry-wide topics.
# # #
New Research Details How Sell Side Firms have Taken the Next Step in the Dealer-to-Client (D2C) E-Trading Evolution, Putting Algorithms on Institutional Clients’ Desktops
NEW YORK & LONDON, February 15, 2011 – Algorithmic trading functionality has finally moved onto buy-side fixed income (FI) trading platforms, says TABB Group in new research published today. Building on the recent overhaul of their internal infrastructure, including liquidity aggregation technologies and auto-quoting logic, a number of major banks are taking the next step in today’s e-trading evolution by putting algorithms directly on their institutional clients’ desktops.
Although algorithmic trading in the liquid fixed income market has been discussed for years, says Adam Sussman, a TABB partner, director of research and author of the new report, “Treasury Trading 2011: Automating the Yield Curve,” major dealers are launching a new generation of trading functionality aimed at bringing a greater amount of automation and sophistication to the buy side. While dealer-to-client (D2C) electronic trading has existed in the form of single- and multi-dealer platforms for the past 10 years, “these new marketed solutions are intended to streamline the execution process through support for limit prices (or spread); algorithmic functionality for multi-leg and cross-asset class orders; implementation of enterprise-wide liquidity management; and automated quoting and internal trade matching.”
According to Sussman, four dealers, each known as a leader in FI, e-trading or both, continue to pour investments into overhauling their FI infrastructure, aggressively pursuing an automated, technology-driven, volume-based business model, also known as flow monsters. Most of the recent focus has been on Treasury notes (T-notes) where overall trading volumes have held up well over the last few years, growing at a 5% compound annual growth rate since 2002. Based on TABB Group estimates, the client component of that volume has been steadily rising during that same time period, from 54% in 2002 to 58% in 2010.
The initial source of demand for this algorithmic functionality is coming from trades such as switches, curves and basis, says Sussman, trades that depend on the efficient execution of two or more securities, limited for now to Treasuries and related futures or swaps. “This new functionality allows traders to pinpoint the amount of risk exposure they’re willing to take on in order to get filled. They can take on more risk in order to put the trade on more quickly or only accept a narrow range of exposure.”
Another twist in the story is the potential impact of derivatives reform on how the cash market trades. The transformation of the swaps market to a more open, transparent market could have unexpected consequences. Banks might seek additional opportunities to aggregate internal liquidity for the purposes of quoting tighter swaps spreads on the Swaps Execution Facility (SEF). The buy side might move more of its rates trading to multi-dealer platforms in response to regulatory reforms. And arbitrage opportunities could increase along with access and transparency, thus driving turnover frequency and volume.
But one thing is clear, he says, “Everyone knows that they can’t afford to sit still. The opportunities in this space are as never-ending as the US federal government’s current debt.”
The 18-page research note with 7 exhibits, based on one-to-one, interview-based conversations with primary dealers, brokers, interdealer brokers, proprietary trading groups, hedge funds and long-only asset managers examines liquidity aggregation; auto-quoting; algorithmic spread trading; buy-side attitudes toward electronic trading; the impact of SEFs on the cash market; and recent product announcements from a number of dealers. It also sizes the portion of Treasury trading that occurs electronically versus the phone and how much market-making is fully automated.
The report is available for download by TABB Group Derivatives Research Alliance clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. For an executive summary or to purchase the report, visit http://www.tabbgroup.com or write to info@tabbgroup.com.
Related US Treasuries research at TABB includes “On-The-Run Treasury Notes: The Benefits of a Tiered Market Structure.” Written by Sussman, it gives a detailed description of US Treasury market structure for on-the-run notes, from the distribution of primary issuance to the dealer-to-client (D2C) platforms. The report drills down into the interdealer platforms, detailing who accesses those markets, how they do so and how changes in matching logic are making platforms look less like auctions and more like order-driven price/time markets. The report also examines how automation in banks’ liquidity provisioning functions is impacting the liquidity discovery process on the D2C platforms.
About TABB Group
TABB Group is the strategic advisory and research firm founded in 2003 and based on the proven interview-based research methodology of “first-person knowledge” developed by founder Larry Tabb. TABB Group analyzes and quantifies the investing value chain from the fiduciary, investment manager, broker, exchange and custodian, helping senior business leaders gain a truer understanding of financial markets issues. For more information, visit www.tabbgroup.com. In January 2010, TABB Group launched TabbFORUM, the online community currently with more than 6,500 capital markets members, drawn from buy side and sell side firms, exchanges, regulatory agencies, academia, vendors and media, focusing on thought leadership issues covering current industry-wide topics.
# # #