Top Interest Rate Headlines 08-15-11: ECB Spent $32 Billion Last Week On Bond Purchases

ECB Spent $32 Billion Last Week On Bond Purchases
AP
The European Central Bank spent euro22 billion ($31.7 billion) last week buying up government bonds in an effort to keep Italy and Spain from financial disaster.
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Fed's Lockhart: Five Questions and Answers about Today's Economy
Dennis P. Lockhart
Federal Reserve Bank of Atlanta
Lockhart says he is currently cautious about the need for further monetary action. He believes the economy will resume a healthier pace of growth. But if that assessment proves wrong, Lockhart says the Federal Open Market Committee has the tools available to address whatever circumstances arise.
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Treasury to Sell $35B 4-Week Bills
The Treasury Department said Monday it will sell $35 billion of four-week discount bills Tuesday.
By Gary Siegel
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Foreigners Slashed U.S. Treasurys Holdings In June
BY LUCA DI LEO AND JEFF BATER, WSJ.com
Private foreign investors sold a record amount of U.S. Treasurys in June as the U.S. debt-ceiling debate intensified, but China boosted its holdings for the third month in a row.
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Economic Confidence Falls: Why Some Consumers Still Have It
By Douglas McIntyre, DailyFinance
Consumers who live in the District of Columbia have more economic confidence than residents of any other part of the country, according to a new Gallup poll. Maryland and Virginia also rank in the top 10 for consumer confidence.
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Monetary Policy Stimulus at the Zero Bound is Hard...
David Beckworth, Finance Banter
Except when it was done in Sweden over the past few years or when it was done between 1933 and 1936 in the U.S. economy.  In both cases short-term interest rates were at 0% and almost all the other characteristics of what a New Keynesian like Matt Rognlie would call a liquidity trap were present.  Monetary policy stimulus, however, proved to be very effective in both economies.
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NAHB Housing Index Holds at 15 in August
By Gary Siegel
Builders’ confidence in the market for new single-family homes held at its low level as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – remained at 15 in August.
http://jlne.ws/qrFhDN

RBS offers interest-free loans to firms hit by riots
BBC
Royal Bank of Scotland (RBS) has become the latest bank to offer financial support to small firms that were affected by last week's rioting.

Fed's Zero Rate Stance Poses Risk For Rate Futures Volume
By Howard Packowitz Of DOW JONES NEWSWIRES
A potential two-year freeze on U.S. interest rates telegraphed by policymakers provides a fresh challenge for the flagship product group at CME Group Inc. (CME), though some traders see an opportunity to position themselves for volatility stemming from any future policy change from the Federal Reserve.
http://jlne.ws/ru7VO3

Firms Study Relationship Of Equity To Credit As Markets Gyrate
By Katy Burne Of DOW JONES NEWSWIRES
A few closely held financial-data companies are studying the relationship between equity and credit markets in anticipation of growing interest from high-speed trading firms and traditional portfolio managers. The move comes amid a period of historic volatility, stemming from twin debt crises on either side of the Atlantic, rapidly slowing economic growth and unyielding mortgage-deal litigation weighing on Wall Street banks.
http://jlne.ws/qbwaXq

The Limitations on Central Banks
NY Times
If the first fear is global recession, the second is that central banks have run out of fixes. They do have means to respond, but only with radical and possibly dangerous policies whose efficacy is dubious. These nuclear monetary weapons might be better kept locked away.
http://jlne.ws/q5JgH0

Credit Suisse Likely to Settle Criminal Tax Probe, Lawyers Say
By David Voreacos - Bloomberg
Credit Suisse Group AG, the Swiss bank facing possible U.S. indictment for aiding tax evasion, will likely settle with prosecutors by admitting wrongdoing and paying a penalty that may exceed $1 billion, tax lawyers said.
http://jlne.ws/nkwprB

Banking: Again on the edge
By Patrick Jenkins and Megan Murphy, Financial Times
Stepping down: many of the positions being eliminated in western financial centres such as London's Canary Wharf are unlikely to return, even when the industry's current troubles are over They were never going to attract outpourings of sympathy from the general public. But the job cuts that have hit whole echelons of the world’s biggest banks in recent weeks have not only attracted little compassion, they have barely been noticed at all amid the seesawing global markets and predictions of economic gloom.
http://jlne.ws/nQg0Q5