Press Release
The Federal Reserve Board announced the appointment of Steven B. Kamin as director of the Division of International Finance, effective December 11.
The division supports the Board and the Federal Open Market Committee by providing information and analysis pertaining to economic and financial developments in foreign countries and the performance of the U.S. external sector. In addition, the division's director represents the Board at international meetings and in its contacts with foreign central banks.
"Steve's deep understanding of international economic and financial matters make him uniquely qualified to lead the division during this pivotal time for the global economy," said Federal Reserve Chairman Ben S. Bernanke.
Kamin joined the Federal Reserve Board in 1987 and was appointed to the official staff in 1999. He has been serving as acting director of the Division of International Finance since August. In his previous role as a deputy director of the division, he was responsible for monitoring and analyzing developments in international financial markets and has published research on a range of topics including global finance and monetary policy, capital flows, exchange rates, and current account imbalances. He has also served as a visiting economist at the Bank for International Settlements, a senior economist for international financial affairs at the Council of Economic Advisers, and as a consultant for the World Bank.
Kamin succeeds D. Nathan Sheets, who announced in August that he was stepping down after 18 years of service with the Federal Reserve Board, including nearly 4 years as the director of the division.
Kamin holds a bachelor's degree from the University of California at Berkeley and received a Ph.D. in economics from the Massachusetts Institute of Technology.
For media inquiries, call 202-452-2955.
Jumat, 09 Desember 2011
Kamis, 08 Desember 2011
December 8, 2011: EU Leaders Commit To New Fiscal Compact: Draft
December 8, 2011
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
Federal Reserve Announces Chairs, Deputy Chairs Of Fed Banks For 2012
Press Release
The Federal Reserve Board on Monday announced the designation of the chairs and deputy chairs of the 12 Federal Reserve Banks for 2012.
Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as chair and a second as deputy chair.
Following are the names of the chairs and deputy chairs designated by the Board for 2012:
Boston
Kirk A. Sykes, President, Urban Strategy America Fund, L.P., Boston, Mass., named Chair.
William D. Nordhaus, Sterling Professor of Economics, Yale University, New Haven, Conn., named Deputy Chair.
New York
Lee C. Bollinger, President, Columbia University, New York, N.Y, renamed Chair.
Kathryn S. Wylde, President and Chief Executive Officer, Partnership for New York City, New York, N.Y., renamed Deputy Chair.
Philadelphia
Jeremy Nowak, President, William Penn Foundation, Philadelphia, Penn., named Chair.
James E. Nevels, Chairman, The Swarthmore Group, Philadelphia, Penn., named Deputy Chair.
Cleveland
Alfred M. Rankin, Jr., Chairman, President and Chief Executive Officer, NACCO Industries, Inc., Cleveland, Ohio, renamed Chair.
Richard K. Smucker, Chief Executive Officer, The J.M. Smucker Company, Orrville, Ohio, renamed Deputy Chair.
Richmond
Margaret E. McDermid, Senior Vice President and Chief Information Officer, Dominion Resources, Inc., Richmond, Va., renamed Chair.
Linda D. Rabbitt, Chairman and Chief Executive Officer, Rand Construction Corporation, Washington, D.C., renamed Deputy Chair.
Atlanta
Carol B. Tomé, Chief Financial Officer and Executive Vice President, The Home Depot, Atlanta, Ga., renamed Chair.
Thomas I. Barkin, Director, McKinsey & Company, Atlanta, Ga., renamed Deputy Chair.
Chicago
William C. Foote, Retired Chairman of the Board, USG Corporation, Chicago, Ill., renamed Chair.
Jeffrey A. Joerres, Chairman and Chief Executive Officer, ManpowerGroup, Milwaukee, Wis., named Deputy Chair.
St. Louis
Ward M. Klein, Chief Executive Officer, Energizer Holdings, Inc., St. Louis, Mo., named Chair.
Sharon D. Fiehler, Executive Vice President & Chief Administrative Officer, Peabody Energy, St. Louis, Mo., named Deputy Chair.
Minneapolis
Mary K. Brainerd, President and Chief Executive Officer, HealthPartners, Minneapolis, Minn., named Chair.
Randall J. Hogan, Chairman and Chief Executive Officer, Pentair, Incorporated, Minneapolis, Minn., named Deputy Chair.
Kansas City
Paul DeBruce, Chief Executive Officer and Founder, DeBruce Grain, Inc., Kansas City, Mo., renamed Chair.
Barbara Mowry, Chief Executive Officer, GoreCreek Advisors, Greenwood Village, Colo., named Deputy Chair.
Dallas
Herbert D. Kelleher, Founder and Chairman Emeritus, Southwest Airlines, Dallas, Tex., renamed Chair.
Myron E. Ullman III, Chief Executive Officer and Chairman of the Board, J.C. Penney Company, Inc., Plano, Tex., renamed Deputy Chair.
San Francisco
Douglas W. Shorenstein, Chairman and Chief Executive Officer, Shorenstein Properties LLC, San Francisco, Calif., renamed Chair.
Patricia E. Yarrington, Vice President and Chief Financial Officer, Chevron Corporation, San Ramon, Calif., renamed Deputy Chair.
-- Christine Nielsen
Lead Stories
EU Leaders Commit To New Fiscal Compact: Draft
Reuters
The European Central Bank spooked financial markets Thursday by dousing hopes of dramatic crisis-fighting action in the euro area shortly before European leaders began what the French president billed a last chance summit
http://jlne.ws/swTTBZ
ECB Launches New Crisis Measures, Won't Commit to Bigger Bond Buys
By MARGIT FEHER And GEOFFREY T. SMITH, WSJ.com
The European Central Bank responded Thursday to pressure for radical action to stop the rot in the euro zone's financial markets, but stopped well short of giving any commitment to increased purchases of government bonds.
http://jlne.ws/sD5bjV
China's Dagong Rating Agency Downgrades France
Reuters
Chinese rating agency Dagong downgraded France on Thursday, saying that the government would likely miss its deficit-reduction targets due to weaker-than-expected growth and the fallout from the euro zone's debt crisis."
http://jlne.ws/sPIFZi
Bottom Line - S&P: Entire 27-nation EU is at risk of downgrade "S&P: Entire 27-nation EU is at risk of downgrade
By msnbc.com news services
Ratings agency Standard & Poor's injected urgency into talks aimed at saving the euro currency from collapsing under the weight of huge state debt by warning Thursday that it may downgrade the bonds of all 27 EU nations."
http://jlne.ws/sODCKy
Draghi Courts Bundesbank in Bid to Avoid Trichet’s Bond Fate
Businessweek
http://jlne.ws/uUm3BI
Reading the Draghi Tea Leaves
CNBC
Draghi's ECB moves markets up, then down. S&P futures initially moved up, then down, as ECB head Mario Draghi said he was "surprised" by the reaction to his now-famous comment that "other elements might follow" if there was a new fiscal treaty. He said this was not necessarily a signal that he would be initiating more bond purchases.
http://jlne.ws/uw8SMl
ECB cuts key rate to 1%; BOE on hold
Market Watch
The European Central Bank on Thursday cut its key lending rate, while the Bank of England leaves its bank rate at a record low and makes no changes to its quantitative easing program.
http://jlne.ws/t3O5IN
ECB douses rescue hopes as EU seeks crisis deal
Reuters
http://jlne.ws/rtXO3V
Standard & Poor's Ratings Services: Long-Term 'AAA' Rating On The European Union Placed On CreditWatch Negative
Press Release
Standard & Poor's Ratings Services today placed its 'AAA' long-term issuer credit rating on the European Union (EU) on CreditWatch with negative implications. At the same time, we affirmed the 'A-1+' short-term issuer credit rating on the EU.
http://jlne.ws/sQj3bM
Fed's Discount Rate Among Tools to Counter Europe's Debt Crisis
BusinessWeek
The Federal Reserve could if necessary dig deeper into its toolkit to ease the sovereign-debt crisis in Europe, by cutting the U.S. discount lending rate or restarting a program that auctions loans to banks.
http://jlne.ws/spUQTK
Fed disputes report of secret help to big banks
Washington Post
The Federal Reserve has launched an unusual public rebuttal of media claims that the central bank massively subsidized big Wall Street banks during the financial crisis. Bloomberg News reported last week that emergency lending programs by the Fed gave major banks about $13 billion in extra profit by handing them money at below-market rates. The Washington Post, which has a content partnership ...
http://jlne.ws/v5klBq
Banks seek to avoid Volcker rule "fire sale"
Reuters via Yahoo! News
U.S. banks want regulators to give them more time to liquidate investments in certain private equity funds under the Volcker rule, arguing that without more leeway they will have to hold "fire sales."
http://jlne.ws/uhPBym
Accelerating U.S. Economy May Ease Pressure on Bernanke to Buy More Bonds
Bloomberg
"Recent economic data takes away some of the urgency for the need to engage in a new round of quantitative easing," said Michael Feroli , a former Fed economist who is now chief U.S. economist at JPMorgan Chase & Co. in New York. The Federal Open Market Committee "can say, 'Let's wait and see if this is going to build on itself.
http://jlne.ws/ufIGui
Events
Markets Demystified: OTC vs. Exchange-Traded Derivatives
December 8, 2011
The IFM Explains The OTC Market Vs Derivatives
http://jlne.ws/vGLTAx
Lifecycle of a Listed and OTC Derivatives Trade
December 8, 2011
The IFM Explains OTC Vs Listed Trades
http://jlne.ws/tb32fH
Fixed Income Markets 2012
January 24, 2012
Tabb Forum Looks At Changes Ahead And Staying Ahead In Fixed Incomes
http://jlne.ws/snQ3VO
Treasury Futures: Using International Fixed-Income and Money Market Spreads
January 31, 2012
The IFM Instructs On Using Fixed Income And Money Market Spreads
http://jlne.ws/u7MgUK
Exchanges, Clearing Houses & MTFs
DTCC warns of OTC threat from Asia
By Philip Stafford
The Depository Trust and Clearing Corporation (DTCC), the post-trade group, has warned that Europe and the US could lose derivatives business to Asia while they delay finalisation of new rules governing the vast off-exchange trading market.
http://jlne.ws/sjyr1f
LCH.Clearnet lowers margin on Italian bonds
MarketWatch
Clearing firm LCH.Clearnet has lowered the margin it requires traders to deposit to trade Italian government bonds, partly reversing a November rise. In a notice on its website dated Wednesday, the firm said the margin on Italian bonds was lowered, with the deposit required for bonds maturing in 7 to 10 years reduced to 8.15% from 11.65%. Italian bond yields have ...
http://jlne.ws/tQRLeb
CME forms panel to head off future MF Globals
Reuters
CME Group Inc., under fire for its handling of the collapse of futures brokerage MF Global Holdings Ltd., recently tasked a board committee to look at ways to defend against future failures. CME's strategic steering committee is spearheading the charge to see "how do you strengthen the system, if it's necessary," said a person close to the matter, who declined to be identified because the examination is just beginning. "It's not something you are going to get a decision on tomorrow, or anything like that."
http://jlne.ws/rPi8bo
Firms & Banks
Tradition swaps platform suffers glitch
By Philip Stafford, Financial Times
Tradition, the Swiss interdealer broker, was forced to halt dealing on its new interest rate swap platform for more than two hours earlier this week amid technical problems following an IT upgrade.
http://jlne.ws/v7xrdR
UBS, Citigroup $674 Million CMBS Price Talk Tighter Than Recent Deal
By Al Yoon, Of DOW JONES NEWSWIRES
UBS and Citigroup Global Markets expect to sell their $673.9 million in commercial mortgage-backed securities in coming days at yield spreads tighter than a similar issue that sold on Tuesday, according to an investor who has seen terms of the deal.
http://jlne.ws/suXK2R
Mortgage servicers at Chase, BofA slapped for poor performance
By Mary Ellen Podmolik, Chicago Tribune
The Treasury Department said Wednesday it would withhold loan modification incentive payments from Bank of America and JPMorgan Chase for the third consecutive quarter, and took Chase in particular to task for its poor compliance with federal loan modification programs.
http://jlne.ws/tCvlr9
Deutsche Bank, BNP May Be Cut by S&P in European Credit Review
BusinessWeek
Deutsche Bank AG and BNP Paribas SA are among European lenders that were placed on CreditWatch negative by Standard & Poor's amid a similar review of 15 countries in the region.
http://jlne.ws/u2yDEw
Santander to Sell Colombian Unit for $1.23 Billion
By DEALBOOK - NY Times
Grupo Santander, seeking to bolster its capital reserves, announced on Wednesday that it would sell its Colombian unit to CorpBanca of Chile for $1.225 billion.
http://jlne.ws/u8fznB
HSBC to widen mis-selling bond review
By Josephine Cumbo, Financial Times
HSBC is to extend its review of sales practices at NHFA, the discredited care home fees advisory group, following public outrage over the mis-selling of investment bonds to thousands of elderly and vulnerable customers.
http://jlne.ws/swctT7
JPMorgan increases lending to eurozone
By Shahien Nasiripour in New York, Financial Times
JPMorgan Chase has increased its lending to troubled eurozone economies, its chief executive said on Wednesday, as US rivals retreat from the region.
http://jlne.ws/vmonlG
Two Banks Repay $145 Million In TARP Funds, Provide Additional Positive Return On Tarp Bank Programs For Taxpayers
Press Release
The U.S. Department of the Treasury announced that the following two financial institutions have repurchased Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) investments, delivering a total of $145 million in proceeds today for taxpayers.
http://jlne.ws/sM7Q8w
Regulators
US Regulators To Propose Removal Of Credit Ratings In Capital Rules
By Alan Zibel, Dow Jones Newswires
U.S. bank regulators proposed Wednesday to remove references to credit ratings in requirements for how strong of a capital buffer banks must hold for their trading accounts.
http://jlne.ws/scjiVK
Testimony of Daniel J. Roth, President and CEO, National Futures Association
Before the Committee on Agriculture, U.S. House of Representatives
Press Release
http://jlne.ws/vl4Dvj
Regulators diverge over MF Global collapse
By Shahien Nasiripour, Tom Braithwaite and Kara Scannell, Financial Times
Regulators are expected to give diverging accounts about when they first became concerned over the state of MF Global, the broker-dealer that collapsed on October 31 with an estimated $1.2bn of customer money missing.
http://jlne.ws/tC0X2h
Federal Reserve May Thwart Dividend Plans From Bank of America and Citigroup
Marketwire
The Bedford Report Provides Equity Research on Bank of America & Citigroup
http://jlne.ws/uDZcqb
Fed's Yellen Sees Scope for More Easing to Spur Recovery
BusinessWeek
Federal Reserve Vice Chairman Janet Yellen said the central bank has leeway to spur the U.S. recovery and reduce unemployment by buying more assets or clarifying its plan to sustain record-low borrowing costs.
http://jlne.ws/uWCYJw
Bernanke Favored by 71%, Obama by 48% in Poll
Bloomberg
Federal Reserve Board Chairman Ben S. Bernanke's standing is soaring among global investors, who say the U.S. central bank is outperforming its European counterpart in economic crisis management, a Bloomberg poll shows.
http://jlne.ws/uIWhqg
Bloomberg News Responds to Bernanke Criticism
Bloomberg
Federal Reserve Chairman Ben S. Bernanke said in a letter to four senior lawmakers today that recent news articles about the central bank's emergency lending programs contained "egregious errors."
http://jlne.ws/rtl7si
Why We All Should Welcome Bernanke's Complaints: Matthew Winkler
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke's response to Bloomberg News reporting regarding the Fed's emergency lending to banks and other companies, although hardly complimentary, sounded a welcome note of engagement by the U.S. central bank in issues that frame one of the most important financial stories of our time.
http://jlne.ws/voN2ul
Global News
Australia's Worst Jobs Gain in 15 Years Raises Rate-Cut Chances
BusinessWeek
Australia is headed for its worst year of jobs growth in 15 years, boosting prospects central bank Governor Glenn Stevens will extend interest-rate cuts into 2012 as inflation pressure eases.
http://jlne.ws/sXJBqU
Brazil's November Consumer Prices Increase 0.52%, Faster Than Expected
Bloomberg
Brazilian consumer prices rose faster than expected in November, cementing expectations the central bank won't have room to accelerate the pace of interest-rate cuts.
http://jlne.ws/vsX37k
Bank of England keeps policy settings steady, as expected
ShareCast
The Bank of England's Monetary Policy Committee has just announced its decision to maintain its key policy rate unchanged at 0.5%.
http://jlne.ws/uFhJBp
Vietnam Risks Stability If Policy Eased, IMF, World Bank Say
BusinessWeek
Vietnam may undermine progress toward economic stability if it loosens monetary policy now, the International Monetary Fund and World Bank said as the nation struggles with the fastest inflation in Asia.
http://jlne.ws/sff8qI
Chilean Policy Maker Sees Bank Keeping 'Neutral Stance' Amid Euro Criss
Bloomberg
Chilean policy makers may keep interest rates unchanged as Europe's debt crisis has a limited impact on the Andean nation, the central bank's deputy governor said, downplaying evidence of weaker domestic growth.
http://jlne.ws/tYwqDh
Indonesia Central Bank Pauses Interest-Rate Cuts to Assess Inflation Risk
Bloomberg
Indonesia's central bank kept its benchmark interest rate unchanged, pausing after cutting borrowing costs in the previous two meetings to assess the inflation risk as the rupiah falls.
http://jlne.ws/tFdZ83
Iceland's Central Bank Leaves Key Interest Rate Unchanged
Nasdaq
Iceland's Central Bank Leaves Key Interest Rate Unchanged
http://jlne.ws/uHEmtr
Disclaimer: The John Lothian, Environmental Markets, JLN Metals, JLN Managed Futures, JLN Interest Rates, JLN Options and JLN FX newsletters and blogs and MarketsWiki are products of John J. Lothian & Company, Inc. The opinions expressed in these publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
Futures and options trading involve risk. Past results are no indication of future performance.
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Copyright 2011 John J. Lothian & Company, Inc. All Rights Reserved.
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
Federal Reserve Announces Chairs, Deputy Chairs Of Fed Banks For 2012
Press Release
The Federal Reserve Board on Monday announced the designation of the chairs and deputy chairs of the 12 Federal Reserve Banks for 2012.
Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as chair and a second as deputy chair.
Following are the names of the chairs and deputy chairs designated by the Board for 2012:
Boston
Kirk A. Sykes, President, Urban Strategy America Fund, L.P., Boston, Mass., named Chair.
William D. Nordhaus, Sterling Professor of Economics, Yale University, New Haven, Conn., named Deputy Chair.
New York
Lee C. Bollinger, President, Columbia University, New York, N.Y, renamed Chair.
Kathryn S. Wylde, President and Chief Executive Officer, Partnership for New York City, New York, N.Y., renamed Deputy Chair.
Philadelphia
Jeremy Nowak, President, William Penn Foundation, Philadelphia, Penn., named Chair.
James E. Nevels, Chairman, The Swarthmore Group, Philadelphia, Penn., named Deputy Chair.
Cleveland
Alfred M. Rankin, Jr., Chairman, President and Chief Executive Officer, NACCO Industries, Inc., Cleveland, Ohio, renamed Chair.
Richard K. Smucker, Chief Executive Officer, The J.M. Smucker Company, Orrville, Ohio, renamed Deputy Chair.
Richmond
Margaret E. McDermid, Senior Vice President and Chief Information Officer, Dominion Resources, Inc., Richmond, Va., renamed Chair.
Linda D. Rabbitt, Chairman and Chief Executive Officer, Rand Construction Corporation, Washington, D.C., renamed Deputy Chair.
Atlanta
Carol B. Tomé, Chief Financial Officer and Executive Vice President, The Home Depot, Atlanta, Ga., renamed Chair.
Thomas I. Barkin, Director, McKinsey & Company, Atlanta, Ga., renamed Deputy Chair.
Chicago
William C. Foote, Retired Chairman of the Board, USG Corporation, Chicago, Ill., renamed Chair.
Jeffrey A. Joerres, Chairman and Chief Executive Officer, ManpowerGroup, Milwaukee, Wis., named Deputy Chair.
St. Louis
Ward M. Klein, Chief Executive Officer, Energizer Holdings, Inc., St. Louis, Mo., named Chair.
Sharon D. Fiehler, Executive Vice President & Chief Administrative Officer, Peabody Energy, St. Louis, Mo., named Deputy Chair.
Minneapolis
Mary K. Brainerd, President and Chief Executive Officer, HealthPartners, Minneapolis, Minn., named Chair.
Randall J. Hogan, Chairman and Chief Executive Officer, Pentair, Incorporated, Minneapolis, Minn., named Deputy Chair.
Kansas City
Paul DeBruce, Chief Executive Officer and Founder, DeBruce Grain, Inc., Kansas City, Mo., renamed Chair.
Barbara Mowry, Chief Executive Officer, GoreCreek Advisors, Greenwood Village, Colo., named Deputy Chair.
Dallas
Herbert D. Kelleher, Founder and Chairman Emeritus, Southwest Airlines, Dallas, Tex., renamed Chair.
Myron E. Ullman III, Chief Executive Officer and Chairman of the Board, J.C. Penney Company, Inc., Plano, Tex., renamed Deputy Chair.
San Francisco
Douglas W. Shorenstein, Chairman and Chief Executive Officer, Shorenstein Properties LLC, San Francisco, Calif., renamed Chair.
Patricia E. Yarrington, Vice President and Chief Financial Officer, Chevron Corporation, San Ramon, Calif., renamed Deputy Chair.
-- Christine Nielsen
Lead Stories
EU Leaders Commit To New Fiscal Compact: Draft
Reuters
The European Central Bank spooked financial markets Thursday by dousing hopes of dramatic crisis-fighting action in the euro area shortly before European leaders began what the French president billed a last chance summit
http://jlne.ws/swTTBZ
ECB Launches New Crisis Measures, Won't Commit to Bigger Bond Buys
By MARGIT FEHER And GEOFFREY T. SMITH, WSJ.com
The European Central Bank responded Thursday to pressure for radical action to stop the rot in the euro zone's financial markets, but stopped well short of giving any commitment to increased purchases of government bonds.
http://jlne.ws/sD5bjV
China's Dagong Rating Agency Downgrades France
Reuters
Chinese rating agency Dagong downgraded France on Thursday, saying that the government would likely miss its deficit-reduction targets due to weaker-than-expected growth and the fallout from the euro zone's debt crisis."
http://jlne.ws/sPIFZi
Bottom Line - S&P: Entire 27-nation EU is at risk of downgrade "S&P: Entire 27-nation EU is at risk of downgrade
By msnbc.com news services
Ratings agency Standard & Poor's injected urgency into talks aimed at saving the euro currency from collapsing under the weight of huge state debt by warning Thursday that it may downgrade the bonds of all 27 EU nations."
http://jlne.ws/sODCKy
Draghi Courts Bundesbank in Bid to Avoid Trichet’s Bond Fate
Businessweek
http://jlne.ws/uUm3BI
Reading the Draghi Tea Leaves
CNBC
Draghi's ECB moves markets up, then down. S&P futures initially moved up, then down, as ECB head Mario Draghi said he was "surprised" by the reaction to his now-famous comment that "other elements might follow" if there was a new fiscal treaty. He said this was not necessarily a signal that he would be initiating more bond purchases.
http://jlne.ws/uw8SMl
ECB cuts key rate to 1%; BOE on hold
Market Watch
The European Central Bank on Thursday cut its key lending rate, while the Bank of England leaves its bank rate at a record low and makes no changes to its quantitative easing program.
http://jlne.ws/t3O5IN
ECB douses rescue hopes as EU seeks crisis deal
Reuters
http://jlne.ws/rtXO3V
Standard & Poor's Ratings Services: Long-Term 'AAA' Rating On The European Union Placed On CreditWatch Negative
Press Release
Standard & Poor's Ratings Services today placed its 'AAA' long-term issuer credit rating on the European Union (EU) on CreditWatch with negative implications. At the same time, we affirmed the 'A-1+' short-term issuer credit rating on the EU.
http://jlne.ws/sQj3bM
Fed's Discount Rate Among Tools to Counter Europe's Debt Crisis
BusinessWeek
The Federal Reserve could if necessary dig deeper into its toolkit to ease the sovereign-debt crisis in Europe, by cutting the U.S. discount lending rate or restarting a program that auctions loans to banks.
http://jlne.ws/spUQTK
Fed disputes report of secret help to big banks
Washington Post
The Federal Reserve has launched an unusual public rebuttal of media claims that the central bank massively subsidized big Wall Street banks during the financial crisis. Bloomberg News reported last week that emergency lending programs by the Fed gave major banks about $13 billion in extra profit by handing them money at below-market rates. The Washington Post, which has a content partnership ...
http://jlne.ws/v5klBq
Banks seek to avoid Volcker rule "fire sale"
Reuters via Yahoo! News
U.S. banks want regulators to give them more time to liquidate investments in certain private equity funds under the Volcker rule, arguing that without more leeway they will have to hold "fire sales."
http://jlne.ws/uhPBym
Accelerating U.S. Economy May Ease Pressure on Bernanke to Buy More Bonds
Bloomberg
"Recent economic data takes away some of the urgency for the need to engage in a new round of quantitative easing," said Michael Feroli , a former Fed economist who is now chief U.S. economist at JPMorgan Chase & Co. in New York. The Federal Open Market Committee "can say, 'Let's wait and see if this is going to build on itself.
http://jlne.ws/ufIGui
Events
Markets Demystified: OTC vs. Exchange-Traded Derivatives
December 8, 2011
The IFM Explains The OTC Market Vs Derivatives
http://jlne.ws/vGLTAx
Lifecycle of a Listed and OTC Derivatives Trade
December 8, 2011
The IFM Explains OTC Vs Listed Trades
http://jlne.ws/tb32fH
Fixed Income Markets 2012
January 24, 2012
Tabb Forum Looks At Changes Ahead And Staying Ahead In Fixed Incomes
http://jlne.ws/snQ3VO
Treasury Futures: Using International Fixed-Income and Money Market Spreads
January 31, 2012
The IFM Instructs On Using Fixed Income And Money Market Spreads
http://jlne.ws/u7MgUK
Exchanges, Clearing Houses & MTFs
DTCC warns of OTC threat from Asia
By Philip Stafford
The Depository Trust and Clearing Corporation (DTCC), the post-trade group, has warned that Europe and the US could lose derivatives business to Asia while they delay finalisation of new rules governing the vast off-exchange trading market.
http://jlne.ws/sjyr1f
LCH.Clearnet lowers margin on Italian bonds
MarketWatch
Clearing firm LCH.Clearnet has lowered the margin it requires traders to deposit to trade Italian government bonds, partly reversing a November rise. In a notice on its website dated Wednesday, the firm said the margin on Italian bonds was lowered, with the deposit required for bonds maturing in 7 to 10 years reduced to 8.15% from 11.65%. Italian bond yields have ...
http://jlne.ws/tQRLeb
CME forms panel to head off future MF Globals
Reuters
CME Group Inc., under fire for its handling of the collapse of futures brokerage MF Global Holdings Ltd., recently tasked a board committee to look at ways to defend against future failures. CME's strategic steering committee is spearheading the charge to see "how do you strengthen the system, if it's necessary," said a person close to the matter, who declined to be identified because the examination is just beginning. "It's not something you are going to get a decision on tomorrow, or anything like that."
http://jlne.ws/rPi8bo
Firms & Banks
Tradition swaps platform suffers glitch
By Philip Stafford, Financial Times
Tradition, the Swiss interdealer broker, was forced to halt dealing on its new interest rate swap platform for more than two hours earlier this week amid technical problems following an IT upgrade.
http://jlne.ws/v7xrdR
UBS, Citigroup $674 Million CMBS Price Talk Tighter Than Recent Deal
By Al Yoon, Of DOW JONES NEWSWIRES
UBS and Citigroup Global Markets expect to sell their $673.9 million in commercial mortgage-backed securities in coming days at yield spreads tighter than a similar issue that sold on Tuesday, according to an investor who has seen terms of the deal.
http://jlne.ws/suXK2R
Mortgage servicers at Chase, BofA slapped for poor performance
By Mary Ellen Podmolik, Chicago Tribune
The Treasury Department said Wednesday it would withhold loan modification incentive payments from Bank of America and JPMorgan Chase for the third consecutive quarter, and took Chase in particular to task for its poor compliance with federal loan modification programs.
http://jlne.ws/tCvlr9
Deutsche Bank, BNP May Be Cut by S&P in European Credit Review
BusinessWeek
Deutsche Bank AG and BNP Paribas SA are among European lenders that were placed on CreditWatch negative by Standard & Poor's amid a similar review of 15 countries in the region.
http://jlne.ws/u2yDEw
Santander to Sell Colombian Unit for $1.23 Billion
By DEALBOOK - NY Times
Grupo Santander, seeking to bolster its capital reserves, announced on Wednesday that it would sell its Colombian unit to CorpBanca of Chile for $1.225 billion.
http://jlne.ws/u8fznB
HSBC to widen mis-selling bond review
By Josephine Cumbo, Financial Times
HSBC is to extend its review of sales practices at NHFA, the discredited care home fees advisory group, following public outrage over the mis-selling of investment bonds to thousands of elderly and vulnerable customers.
http://jlne.ws/swctT7
JPMorgan increases lending to eurozone
By Shahien Nasiripour in New York, Financial Times
JPMorgan Chase has increased its lending to troubled eurozone economies, its chief executive said on Wednesday, as US rivals retreat from the region.
http://jlne.ws/vmonlG
Two Banks Repay $145 Million In TARP Funds, Provide Additional Positive Return On Tarp Bank Programs For Taxpayers
Press Release
The U.S. Department of the Treasury announced that the following two financial institutions have repurchased Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) investments, delivering a total of $145 million in proceeds today for taxpayers.
http://jlne.ws/sM7Q8w
Regulators
US Regulators To Propose Removal Of Credit Ratings In Capital Rules
By Alan Zibel, Dow Jones Newswires
U.S. bank regulators proposed Wednesday to remove references to credit ratings in requirements for how strong of a capital buffer banks must hold for their trading accounts.
http://jlne.ws/scjiVK
Testimony of Daniel J. Roth, President and CEO, National Futures Association
Before the Committee on Agriculture, U.S. House of Representatives
Press Release
http://jlne.ws/vl4Dvj
Regulators diverge over MF Global collapse
By Shahien Nasiripour, Tom Braithwaite and Kara Scannell, Financial Times
Regulators are expected to give diverging accounts about when they first became concerned over the state of MF Global, the broker-dealer that collapsed on October 31 with an estimated $1.2bn of customer money missing.
http://jlne.ws/tC0X2h
Federal Reserve May Thwart Dividend Plans From Bank of America and Citigroup
Marketwire
The Bedford Report Provides Equity Research on Bank of America & Citigroup
http://jlne.ws/uDZcqb
Fed's Yellen Sees Scope for More Easing to Spur Recovery
BusinessWeek
Federal Reserve Vice Chairman Janet Yellen said the central bank has leeway to spur the U.S. recovery and reduce unemployment by buying more assets or clarifying its plan to sustain record-low borrowing costs.
http://jlne.ws/uWCYJw
Bernanke Favored by 71%, Obama by 48% in Poll
Bloomberg
Federal Reserve Board Chairman Ben S. Bernanke's standing is soaring among global investors, who say the U.S. central bank is outperforming its European counterpart in economic crisis management, a Bloomberg poll shows.
http://jlne.ws/uIWhqg
Bloomberg News Responds to Bernanke Criticism
Bloomberg
Federal Reserve Chairman Ben S. Bernanke said in a letter to four senior lawmakers today that recent news articles about the central bank's emergency lending programs contained "egregious errors."
http://jlne.ws/rtl7si
Why We All Should Welcome Bernanke's Complaints: Matthew Winkler
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke's response to Bloomberg News reporting regarding the Fed's emergency lending to banks and other companies, although hardly complimentary, sounded a welcome note of engagement by the U.S. central bank in issues that frame one of the most important financial stories of our time.
http://jlne.ws/voN2ul
Global News
Australia's Worst Jobs Gain in 15 Years Raises Rate-Cut Chances
BusinessWeek
Australia is headed for its worst year of jobs growth in 15 years, boosting prospects central bank Governor Glenn Stevens will extend interest-rate cuts into 2012 as inflation pressure eases.
http://jlne.ws/sXJBqU
Brazil's November Consumer Prices Increase 0.52%, Faster Than Expected
Bloomberg
Brazilian consumer prices rose faster than expected in November, cementing expectations the central bank won't have room to accelerate the pace of interest-rate cuts.
http://jlne.ws/vsX37k
Bank of England keeps policy settings steady, as expected
ShareCast
The Bank of England's Monetary Policy Committee has just announced its decision to maintain its key policy rate unchanged at 0.5%.
http://jlne.ws/uFhJBp
Vietnam Risks Stability If Policy Eased, IMF, World Bank Say
BusinessWeek
Vietnam may undermine progress toward economic stability if it loosens monetary policy now, the International Monetary Fund and World Bank said as the nation struggles with the fastest inflation in Asia.
http://jlne.ws/sff8qI
Chilean Policy Maker Sees Bank Keeping 'Neutral Stance' Amid Euro Criss
Bloomberg
Chilean policy makers may keep interest rates unchanged as Europe's debt crisis has a limited impact on the Andean nation, the central bank's deputy governor said, downplaying evidence of weaker domestic growth.
http://jlne.ws/tYwqDh
Indonesia Central Bank Pauses Interest-Rate Cuts to Assess Inflation Risk
Bloomberg
Indonesia's central bank kept its benchmark interest rate unchanged, pausing after cutting borrowing costs in the previous two meetings to assess the inflation risk as the rupiah falls.
http://jlne.ws/tFdZ83
Iceland's Central Bank Leaves Key Interest Rate Unchanged
Nasdaq
Iceland's Central Bank Leaves Key Interest Rate Unchanged
http://jlne.ws/uHEmtr
Disclaimer: The John Lothian, Environmental Markets, JLN Metals, JLN Managed Futures, JLN Interest Rates, JLN Options and JLN FX newsletters and blogs and MarketsWiki are products of John J. Lothian & Company, Inc. The opinions expressed in these publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
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Rabu, 07 Desember 2011
Top Interest Rate Headlines 12-07-2011: Wall Street Warned After Deutsche Bank Letter Bomb Threat
Wall Street Warned After Deutsche Bank Letter Bomb Threat
http://jlne.ws/s9cpxc
UK economic output loses five years, says NIESR
http://jlne.ws/urDUFD
Citi cuts 4,500 jobs, will take $400 million charge
http://jlne.ws/u
Europe wrangles worsening debt crisis
http://jlne.ws/tnLodYECDar
Bloomberg News Responds to Bernanke Criticism
http://jlne.ws/rtl7si
http://jlne.ws/s9cpxc
UK economic output loses five years, says NIESR
http://jlne.ws/urDUFD
Citi cuts 4,500 jobs, will take $400 million charge
http://jlne.ws/u
Europe wrangles worsening debt crisis
http://jlne.ws/tnLodYECDar
Bloomberg News Responds to Bernanke Criticism
http://jlne.ws/rtl7si
Selasa, 06 Desember 2011
Top Interest Rate Headlines 12-06-2011: EU Talks On Doubling Financial Firewall
EU talks on doubling financial firewall
FT.com
http://jlne.ws/tjOZK5
The euro crisis: Tricky treaty
The Economist
ANGELA MERKEL and Nicolas Sarkozy have agreed on the framework of a fiscal deal, to be put to other heads of state at this week's summit. Charlemagne provides details here. There are a few key points worth making.
http://jlne.ws/uysO0Y
Geithner to add U.S. weight to euro zone talks [Video]
Reuters
Treasury Secretary Timothy Geithner arrived in Germany on Tuesday for a three-day blitz of euro zone officials to urge them to take decisive action to backstop their currency union and resolve a crushing debt crisis.
http://jlne.ws/uQLCnw
Bank of American unit in $315-million mortgage settlement
The Globe And Mail
Bank of America Corp. (BAC-N5.78-0.01-0.17%) agreed to pay $315-million (U.S.) to settle claims by investors who said they were misled about mortgage securities offerings by its Merrill Lynch unit.
http://jlne.ws/smRt65
U.S. deficit is an ‘abomination,’ Vanguard bond chief warns
MarketWatch
Politicians may not be able to tell by ultra low Treasury yield levels, but investors are still very much worried about the lack of progress towards fixing the budget and deficit problems in the U.S.
http://jlne.ws/v6ImvZ
NFA Signs Agreement with FX Alliance to Provide Regulatory Services to FX Alliance's Swap Execution Facility
Press Release
December 5, 2011, Chicago and New York - National Futures Association (NFA) and FX Alliance Inc. (FXall) today announced that they have entered into an agreement that paves the way for NFA to perform regulatory services for FXall's swap execution facility (SEF).
http://jlne.ws/tVlEAH
Credit FAQ: Factors Behind Standard & Poor's Ratings Services Placement Of Eurozone Governments On CreditWatch
Press Release
Standard & Poor's Ratings Services today placed its long-term sovereign ratings on 15 members of the European Economic and Monetary Union (EMU or eurozone) on CreditWatch with negative implications. We now think that there is at least a one-in-two chance that we will lower each of the ratings that we have placed on CreditWatch.
http://jlne.ws/rCWwJs
IMF Executive Board Completes Fifth Review Under Stand-By Arrangement For Greece And Approves EUR2.2 Billion Disbursement
Press Release
The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Greece's economic performance under a program supported by a three-year Stand-By Arrangement (SBA) for Greece. The completion of the review enables the immediate disbursement of an amount equivalent to SDR1.9 billion (about E2.2 billion), bringing total Fund disbursements under the SBA to an amount equivalent to SDR 17.5 billion (about E20.3 billion).
http://jlne.ws/t2CVLB
Talismanic IMF ponders future role
By Alan Beattie, Financial Times
The Franco-German plan to save the single currency was big on what the eurozone will look like in a year's time. But its immediate aim was to arrest the spiral towards default that seemed to have taken Spain and Italy into its grip.
http://jlne.ws/trRKgF
Why Credit-Default Swaps Work On AMR's Debt, But Not Greece's
By Katy Burne, DOW JONES NEWSWIRES
AMR Corp.'s (AMR) bankruptcy is expected to force sellers of credit default swaps on the company's debt to pay up to $367 million to bondholders, in what would be the latest example of the insurance-like contracts working as expected.
http://jlne.ws/t8x6Ay
Sovereign-Debt Test U-Turn Is Too Late to Save EU Regulator's Credibility
Bloomberg
Less than five months after conducting stress tests that found banks needed to raise 2.5 billion euros ($3.4 billion), the European Banking Authority may tell lenders that they need 40 times that amount to defend against losses on sovereign debt.
http://jlne.ws/veaE4t
Statement Of European Commission Vice President Olli Rehn On The Adoption By The Italian Government Of Extraordinary Fiscal And Economic Measures
Press Release
Following the adoption by the Italian Government of a far-reaching package of fiscal measures and economic reforms, the Vice President of the European Commission in charge of Economic and Monetary Affairs and the Euro, Olli Rehn, delivered the following statement.
http://jlne.ws/td9oPQ
In Ireland, Austerity Is Praised but Painful
By LIZ ALDERMAN, NY Times
As European leaders scramble to overcome the Continent's debt crisis, many are pointing to Ireland as a model for how to get out of the troubles.
http://jlne.ws/tb5Vub
LCH.Clearnet's SwapClear Launches Major Enhancements to FCM Service
Press Release
New York, December 5, 2011 LCH.Clearnet Limited (LCH.Clearnet), the world's leading independent clearinghouse and a CFTC-regulated DCO, today announced that it has gone live with significant enhancements to its SwapClear service. Following extensive consultation with the buy side and Futures Commission Merchants, SwapClear now accepts a broader range of collateral for initial margin and offers increased connectivity and variable notional swaps. In addition, the platform offers risk-free compression and flexible trade submission and is now directly accessible via Tradeweb and Bloomberg (VCON and Electronic Trading) through SwapClear's ClearLink API in addition to MarkitSERV.
http://jlne.ws/uew7Zl
Bankers braced for bonus season scrutiny
By Megan Murphy and George Parker, Financial Times
British banks are braced for the most contentious bonus season since the start of the financial crisis as shareholders ratchet up pressure on pay and regulators push for a radical overhaul of how lenders measure the performance of their most senior staff.
http://jlne.ws/vNyUlU
UBS Joins Chi-X Global Ownership Consortium
Press Release
UBS AG has acquired an equity stake in Chi-X Global Holdings LLCand will join the consortium of five financial institutions that recently bought a minority stake in the firm, Chi-X Global announced today.
http://jlne.ws/uX20mN
HSBC Capital spins out into new firm Graycliff
Market Watch
HSBC Capital Management, the buyout arm of HSBC Holdings PLC's (HBC) business in America, Monday said it has spun out into a new firm called Graycliff Partners--the latest example of a bank disposing of assets in the face of regulatory reform.
http://jlne.ws/tEtgB6
Morgan Stanley Denies Wrongdoing, Says Singapore CDO Investors Knew Risks
Bloomberg
Morgan Stanley (MS) , accused by 18 Singapore investors of fraudulently wiping out their $154.7 million investment, denied wrongdoing and said the group was sophisticated and knew of the risks involved.
http://jlne.ws/v257xJ
FT.com
http://jlne.ws/tjOZK5
The euro crisis: Tricky treaty
The Economist
ANGELA MERKEL and Nicolas Sarkozy have agreed on the framework of a fiscal deal, to be put to other heads of state at this week's summit. Charlemagne provides details here. There are a few key points worth making.
http://jlne.ws/uysO0Y
Geithner to add U.S. weight to euro zone talks [Video]
Reuters
Treasury Secretary Timothy Geithner arrived in Germany on Tuesday for a three-day blitz of euro zone officials to urge them to take decisive action to backstop their currency union and resolve a crushing debt crisis.
http://jlne.ws/uQLCnw
Bank of American unit in $315-million mortgage settlement
The Globe And Mail
Bank of America Corp. (BAC-N5.78-0.01-0.17%) agreed to pay $315-million (U.S.) to settle claims by investors who said they were misled about mortgage securities offerings by its Merrill Lynch unit.
http://jlne.ws/smRt65
U.S. deficit is an ‘abomination,’ Vanguard bond chief warns
MarketWatch
Politicians may not be able to tell by ultra low Treasury yield levels, but investors are still very much worried about the lack of progress towards fixing the budget and deficit problems in the U.S.
http://jlne.ws/v6ImvZ
NFA Signs Agreement with FX Alliance to Provide Regulatory Services to FX Alliance's Swap Execution Facility
Press Release
December 5, 2011, Chicago and New York - National Futures Association (NFA) and FX Alliance Inc. (FXall) today announced that they have entered into an agreement that paves the way for NFA to perform regulatory services for FXall's swap execution facility (SEF).
http://jlne.ws/tVlEAH
Credit FAQ: Factors Behind Standard & Poor's Ratings Services Placement Of Eurozone Governments On CreditWatch
Press Release
Standard & Poor's Ratings Services today placed its long-term sovereign ratings on 15 members of the European Economic and Monetary Union (EMU or eurozone) on CreditWatch with negative implications. We now think that there is at least a one-in-two chance that we will lower each of the ratings that we have placed on CreditWatch.
http://jlne.ws/rCWwJs
IMF Executive Board Completes Fifth Review Under Stand-By Arrangement For Greece And Approves EUR2.2 Billion Disbursement
Press Release
The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Greece's economic performance under a program supported by a three-year Stand-By Arrangement (SBA) for Greece. The completion of the review enables the immediate disbursement of an amount equivalent to SDR1.9 billion (about E2.2 billion), bringing total Fund disbursements under the SBA to an amount equivalent to SDR 17.5 billion (about E20.3 billion).
http://jlne.ws/t2CVLB
Talismanic IMF ponders future role
By Alan Beattie, Financial Times
The Franco-German plan to save the single currency was big on what the eurozone will look like in a year's time. But its immediate aim was to arrest the spiral towards default that seemed to have taken Spain and Italy into its grip.
http://jlne.ws/trRKgF
Why Credit-Default Swaps Work On AMR's Debt, But Not Greece's
By Katy Burne, DOW JONES NEWSWIRES
AMR Corp.'s (AMR) bankruptcy is expected to force sellers of credit default swaps on the company's debt to pay up to $367 million to bondholders, in what would be the latest example of the insurance-like contracts working as expected.
http://jlne.ws/t8x6Ay
Sovereign-Debt Test U-Turn Is Too Late to Save EU Regulator's Credibility
Bloomberg
Less than five months after conducting stress tests that found banks needed to raise 2.5 billion euros ($3.4 billion), the European Banking Authority may tell lenders that they need 40 times that amount to defend against losses on sovereign debt.
http://jlne.ws/veaE4t
Statement Of European Commission Vice President Olli Rehn On The Adoption By The Italian Government Of Extraordinary Fiscal And Economic Measures
Press Release
Following the adoption by the Italian Government of a far-reaching package of fiscal measures and economic reforms, the Vice President of the European Commission in charge of Economic and Monetary Affairs and the Euro, Olli Rehn, delivered the following statement.
http://jlne.ws/td9oPQ
In Ireland, Austerity Is Praised but Painful
By LIZ ALDERMAN, NY Times
As European leaders scramble to overcome the Continent's debt crisis, many are pointing to Ireland as a model for how to get out of the troubles.
http://jlne.ws/tb5Vub
LCH.Clearnet's SwapClear Launches Major Enhancements to FCM Service
Press Release
New York, December 5, 2011 LCH.Clearnet Limited (LCH.Clearnet), the world's leading independent clearinghouse and a CFTC-regulated DCO, today announced that it has gone live with significant enhancements to its SwapClear service. Following extensive consultation with the buy side and Futures Commission Merchants, SwapClear now accepts a broader range of collateral for initial margin and offers increased connectivity and variable notional swaps. In addition, the platform offers risk-free compression and flexible trade submission and is now directly accessible via Tradeweb and Bloomberg (VCON and Electronic Trading) through SwapClear's ClearLink API in addition to MarkitSERV.
http://jlne.ws/uew7Zl
Bankers braced for bonus season scrutiny
By Megan Murphy and George Parker, Financial Times
British banks are braced for the most contentious bonus season since the start of the financial crisis as shareholders ratchet up pressure on pay and regulators push for a radical overhaul of how lenders measure the performance of their most senior staff.
http://jlne.ws/vNyUlU
UBS Joins Chi-X Global Ownership Consortium
Press Release
UBS AG has acquired an equity stake in Chi-X Global Holdings LLCand will join the consortium of five financial institutions that recently bought a minority stake in the firm, Chi-X Global announced today.
http://jlne.ws/uX20mN
HSBC Capital spins out into new firm Graycliff
Market Watch
HSBC Capital Management, the buyout arm of HSBC Holdings PLC's (HBC) business in America, Monday said it has spun out into a new firm called Graycliff Partners--the latest example of a bank disposing of assets in the face of regulatory reform.
http://jlne.ws/tEtgB6
Morgan Stanley Denies Wrongdoing, Says Singapore CDO Investors Knew Risks
Bloomberg
Morgan Stanley (MS) , accused by 18 Singapore investors of fraudulently wiping out their $154.7 million investment, denied wrongdoing and said the group was sophisticated and knew of the risks involved.
http://jlne.ws/v257xJ
Senin, 05 Desember 2011
Top Interest Rate Stories 12-05-2011: S&P said to warn all nations in euro zone on credit ratings
S&P said to warn all nations in euro zone on credit ratings
http://jlne.ws/sxO2eQ
Storm Clouds Across the Globe
http://jlne.ws/uBSxdZ
IMF Executive Board Completes Fifth Review Under Stand-By Arrangement for Greece, Approves €2.2 Billion Disbursement
http://jlne.ws/soh8V0
CME Group Sets OTC Clearing Volume Record for the Fourth Consecutive Mnth, Surpasses $150 Bln in Notional Cleared
http://jlne.ws/ulTrrZ
Ireland Details Austerity Plans
http://jlne.ws/rBhUiN
Weekly T-Bills Go At 0.005%, 0.050%
http://jlne.ws/tAJAvh
Merkel, Sarkozy Favor Treaty Change
http://jlne.ws/unJhuH
http://jlne.ws/sxO2eQ
Storm Clouds Across the Globe
http://jlne.ws/uBSxdZ
IMF Executive Board Completes Fifth Review Under Stand-By Arrangement for Greece, Approves €2.2 Billion Disbursement
http://jlne.ws/soh8V0
CME Group Sets OTC Clearing Volume Record for the Fourth Consecutive Mnth, Surpasses $150 Bln in Notional Cleared
http://jlne.ws/ulTrrZ
Ireland Details Austerity Plans
http://jlne.ws/rBhUiN
Weekly T-Bills Go At 0.005%, 0.050%
http://jlne.ws/tAJAvh
Merkel, Sarkozy Favor Treaty Change
http://jlne.ws/unJhuH
Jumat, 02 Desember 2011
Top Interest Rate Headlines 12-02-2011: Fed Lifts Veil On Primary Dealer Survey
Fed lifts veil on primary dealer survey
http://jlne.ws/rxzIEK
Geithner to Meet German, Italian, ECB Officials
http://jlne.ws/vTSjfe
Italy's Monti To Unveil More Budget Cuts, Strategy On Monday
http://jlne.ws/uU8R73
Global financial system on verge of collapse, George Soros says
http://jlne.ws/rDZJr7
ISDA and SIFMA File Lawsuits Challenging Commodity Futures Trading Commission’s Rule on Position Limits
http://jlne.ws/rsgR19
Why Some European Countries and Not the U.S.?: Federal Reserve Bank of Cleveland
http://jlne.ws/rBiIh2
Italy's Monti To Unveil More Budget Cuts, Strategy On Monday
http://jlne.ws/usBXDI
Top Goldman Sachs Executive Departs
http://jlne.ws/vm1wJZ
SocGen to cut 700 jobs in Americas, Asia: sources
http://jlne.ws/t2ykEm
Gross Says Fed to Keep Rates Low for Longer
http://jlne.ws/u0xHi4
Fed’s Fisher Says U.S. Risks ‘Social Unrest’ Amid Rising Federal Deficits
http://jlne.ws/u3hxHW
Fed hawks say central banks can't solve fiscal woes
http://jlne.ws/rZqJJP
Cameron Calls for Euro Backing
http://jlne.ws/vAYp8F
ICE, DTCC to vie for swap data repository supremacy
http://jlne.ws/rKQ9aS
Spending on construction in U.S. rose 0.8 percent in October, third increase in a row - St. Louis Fed
http://jlne.ws/tDdnlP
November Unemployment Rate Falls to 8.6 Percent
http://jlne.ws/sv5O9E
http://jlne.ws/rxzIEK
Geithner to Meet German, Italian, ECB Officials
http://jlne.ws/vTSjfe
Italy's Monti To Unveil More Budget Cuts, Strategy On Monday
http://jlne.ws/uU8R73
Global financial system on verge of collapse, George Soros says
http://jlne.ws/rDZJr7
ISDA and SIFMA File Lawsuits Challenging Commodity Futures Trading Commission’s Rule on Position Limits
http://jlne.ws/rsgR19
Why Some European Countries and Not the U.S.?: Federal Reserve Bank of Cleveland
http://jlne.ws/rBiIh2
Italy's Monti To Unveil More Budget Cuts, Strategy On Monday
http://jlne.ws/usBXDI
Top Goldman Sachs Executive Departs
http://jlne.ws/vm1wJZ
SocGen to cut 700 jobs in Americas, Asia: sources
http://jlne.ws/t2ykEm
Gross Says Fed to Keep Rates Low for Longer
http://jlne.ws/u0xHi4
Fed’s Fisher Says U.S. Risks ‘Social Unrest’ Amid Rising Federal Deficits
http://jlne.ws/u3hxHW
Fed hawks say central banks can't solve fiscal woes
http://jlne.ws/rZqJJP
Cameron Calls for Euro Backing
http://jlne.ws/vAYp8F
ICE, DTCC to vie for swap data repository supremacy
http://jlne.ws/rKQ9aS
Spending on construction in U.S. rose 0.8 percent in October, third increase in a row - St. Louis Fed
http://jlne.ws/tDdnlP
November Unemployment Rate Falls to 8.6 Percent
http://jlne.ws/sv5O9E
December 1, 2011: Fed Dollar-Funding Cut Shows Limits of Action
December 1, 2011
Conversation Starter
Federal Reserve Bank of Atlanta: Longer-Term Deflation Probabilities Decline
Prices of Treasury Inflation-Protected Securities (TIPS) with similar maturity dates can be used to measure probabilities of a net decline in the consumer price index over the five-year period starting in early 2011. One measure of this deflation probability declined from 14 percent on Nov. 16 to 13 percent on Nov. 30, the lowest reading since mid-August. An alternative lower bound on the probability of deflation was 0 percent on Nov. 30, the same as two weeks ago.
http://jlne.ws/vExdwn
**CN: Atlanta Fed points to TIPS as economic gauge.
Sponsorship note: GFI Group now a sponsor of JLN Interest Rates, as well as MarketsReformWiki and MarketsWiki.
--Christine Nielsen
-----------------------------------------------------------------
Central Bank Liquidity Swaps
By Douglas Ashburn, Editor-at-Large, John Lothian News
Wednesday morning, the Federal Reserve, in conjunction with the world’s leading central banks, announced the expansion and extension of “liquidity swap lines” to the European Central Bank, Bank of England, Canadian National Bank, Bank of Japan, and the Swiss National Bank. The program allows these foreign central banks to enter into temporary swap agreements with the Fed at 50 basis points over the overnight interest swap rate (OIS + 50bp).
The announcement sparked a broad rally on Wall Street and throughout European markets. While it is widely understood that such swap lines tend to calm panicked markets, few people understand exactly what they are and what they do.
Back in May, I wrote an article for JLN FX explaining the role of central bank liquidity swaps (Following the Fed: Actions Speak Louder (and More Coherently) than Words, JLN FX, May 17, 2011). In the article, I explained that the swaps are designed to provide temporary dollar liquidity to foreign central banks during times of financial stress. At the height of the financial panic, the Fed had nearly $500 billion worth of these currency swaps on its books. As markets calmed, fewer and fewer of these short-term swaps were renewed upon maturity. Though the program had a preset end date, the Fed has, on several occasions, extended the date. Wednesday’s press release guarantees that the program will continue at least until February 2013.
Although liquidity swaps sound confusing, the concept is really rather simple. When a foreign central bank wishes to draw upon its line, it enters into two agreements with the Fed - an immediate exchange of its currency for dollars at the current exchange rate, and a binding agreement to repurchase its currency at the same exchange rate at which it was initiated plus interest from the Fed at an agreed-upon date in the future, usually less than three months. In the interim, the foreign central bank is able to provide dollar liquidity to financial institutions in its jurisdiction.
Why is this important, and why has it ignited such a rally? The short answer is that, in times of crisis, no other fiat currency has the same level of confidence as the U.S. dollar. No entity other than the U.S. Federal Reserve is capable of accepting unlimited amounts of these types of transactions onto its balance sheet. (Note to the gold bugs and Fed haters: I realize that there is certainly a natural limit to the Fed’s ability. The future of fiat money schemes is another column for another day). The bottom line is that the Fed provides the ultimate backstop for panicked markets.
This is not to say, however, that the Fed can and will prevent a “day of reckoning” for European markets. There is no free lunch. The Fed does not take on exchange rate risk (each end of the swap is conducted at the same rate). Nor does the Fed take on credit risk, that risk stays between the foreign central bank and the financial institutions to which it provides the dollar liquidity. Yesterday’s toxic assets are still toxic, non-performing loans are still likely non-performing. The Fed simply provides an intermediary by which to curtail the seizing-up of credit markets. My guess is that last week’s tepid bond auction in Germany really spooked the Fed and ECB.
One final note on central bank liquidity swaps: though the Federal Reserve is often criticized for its “veil of secrecy,” it does offer considerable transparency, provided one knows where to look. For example, every Thursday afternoon, the Fed releases its statistical survey, which includes a total of the factors affecting reserve balances. The running total of central bank liquidity swaps currently on the Fed’s books can be found near the bottom of Table 1. (Click HERE for the current issue.) Monitoring this number over time should give you a good idea how much credit stress exists among foreign banks.
Bottom line? The crisis in Europe is far from over. Central bank liquidity swaps have provided some temporary relief while Europe contemplates the future of the common currency, member bailouts, and fiscal unity.
Lead Stories
Fed Dollar-Funding Cut Shows Limits of Action
Bloomberg
The Federal Reserve-led global effort to ease borrowing costs for financial firms shows both the central bank’s power to jolt markets -- and the limits of its ability to alleviate the European debt crisis.
http://jlne.ws/swww2k
Federal Reserve statement on financial liquidity measures
Reuters via Yahoo! News
WASHINGTON (Reuters) - Following is a text of the statement issued by the U.S. Federal Reserve on Wednesday, when central banks from the world's leading developed economies said they will take coordinated steps to prevent a lack of liquidity in the global financial system. ...
http://jlne.ws/rvdu5C
Central Banks Take Joint Action to Ease Debt Crisis
New York Times
Six central banks, including the Federal Reserve and the European Central Bank, took coordinated action on Wednesday to ease the strain of the euro zone crisis on the world economy.
http://jlne.ws/uy1NDE
Central Banks Join To Battle Credit Crisis; Markets See Great Gains
NPR
By adding "liquidity" to the world's markets, the central banks aim to keep credit flowing.
http://jlne.ws/uZesQa
The European debt crisis in eight graphs
http://jlne.ws/s1I5YY
Fed's Fisher: swaps not aimed at bailing out Europe
Reuters via Yahoo! News
WASHINGTON (Reuters) - A top Federal Reserve official said on Wednesday that a decision to alter the terms of dollar swap lines with foreign central banks was meant to help economic growth, not bail out Europe. "We are not bailing out ... Europe," Dallas Federal Reserve Bank President Richard Fisher said in an interview with Fox Business Network. "We are trying to meet a shortage of dollars." He ...
http://jlne.ws/ttpBx0
Draghi Hints Again at Rate Cut in Europe
New York Times
The head of the European Central Bank, Mario Draghi, gave a downbeat view of the economy Thursday, while debt auctions in France and Spain performed well.
http://jlne.ws/tGUPGr
German Note Yields Fall Below Zero on ECB Outlook, Safety Demand
BusinessWeek
German one-year notes rallied, pushing the yield below zero for the first time, amid speculation the European Central Bank will intensify its economic stimulus and crisis-fighting measures.
http://jlne.ws/vn8H9y
Europe hits its debt ceiling
Washington Post
Imagine if, during the depths of the financial crisis, the Federal Reserve hadn't stepped in to save the economy. Imagine, instead, that Ben Bernanke had emerged every few days to offer delphic hints about the importance of a large stimulus package, a medium-term deficit reduction plan, and a financial-regulation bill. Maybe he even threw in some commentary about how states needed more fiscal ...
http://jlne.ws/s42dq7
Bernanke: Economy 'far from where we'd like it to be'
San Antonio Express-News
Bernanke: Economy 'far from where we'd like it to be' San Antonio Express-News Copyright 2011 San Antonio Express-News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Published 02:10 p.m., Wednesday, November 16, 2011 For the first time during his tenure as chairman of the Federal Reserve, Dr. Ben Bernanke met with U.S. Armed Forces at a Nov. 10 ...
http://jlne.ws/uocs8v
Comment on Federal Reserve, banks kept huge size of bailout secret, records show
Denver Post
It's time to break up the banks..take control of the Federal Reserve and start senate hearings and get Bush, Cheney, and the cabinet member who was overlooking the banking industry under oath and find out what they knew and when they knew it.
http://jlne.ws/uWfXGK
Dodd-Frank Law May Hinder Crisis Response by Policy Makers
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke and fellow U.S. policy makers may find themselves hampered in restoring financial stability should the European debt crisis spread to America.
http://jlne.ws/ukADFw
Bernanke Should Testify on Secret Fed Loans, Cummings Says
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke should testify before a U.S. House of Representatives committee on the central bank's loans to Wall Street firms during the 2008 financial crisis, Representative Elijah Cummings said.
http://jlne.ws/u4hFwL
31 Banks That Will Face The Fed's Harshest Stress Tests
Forbes via Yahoo! News
The Federal Reserve required bank holding companies with total consolidated assets of $50 billion or more to submit capital plans for review on an annual basis. A total of 31 firms made the list. Source: SNL Financial
http://jlne.ws/uqQ95l
Fed Economist Promoted To Head Bank Oversight Unit
FOX Business
The Federal Reserve on Wednesday announced it was appointing economist Michael Gibson to head the central bank's division of banking supervision starting January 1.
http://jlne.ws/rFFJ7b
MF Global sets up CFTC fight over costs, security
Market Watch
MF Global Inc.'s bankruptcy and an estimated $1.2 billion in missing customer funds there is setting up a battle at the Commodity Futures Trading Commission over customer costs and if investors should have their funds parked in separate bank accounts.
http://jlne.ws/v8tsJM
Ex-FBI chief pledges independence in MF Global case
International Business Times
The trustee tapped to control the assets of MF Global Holdings promised an "independent" approach to the futures broker's bankruptcy in his first public comments since accepting the post.
http://jlne.ws/rpo09f
MF Global Customers Missing $1.2 Billion Denied Court Committee
BusinessWeek
MF Global Inc. brokerage customers, who may be missing more than $1.2 billion from their accounts, won't be allowed to form a committee to represent their interests in bankruptcy court, a judge ruled.
http://jlne.ws/vq2dmG
Hank Paulson And The Wall Street/Washington Axis Of Power
Forbes
The revelation that Treasury Secretary Hank Paulson. in July, 2008, just before the apex of the market meltdown, told a group of hedge fund managers-- many of them former Goldman Sachs stars-- that Uncle Sam had a plan to take over Fannie Mae and Freddie Mac-- wiping out their common stock and preferred shares-- was a terrible betrayal of the public trust, if accurate. Paulson had no business ...
http://jlne.ws/upiJkE
Consumer agency sees confusion on credit cards
Reuters via Yahoo! News
(Reuters) - In its first three months in operation, the U.S. consumer financial watchdog received more than 5,000 complaints from credit card customers, led by billing disputes and interest rate problems. The agency on Wednesday released the first batch of data collected on credit card complaints since it opened for business on July 21. "When consumers contact us, we get a snapshot of how the ...
http://jlne.ws/sTTdFj
U.S. Mortgage Relief Program Widens Its Scope
New York Times
The two-year-old Home Affordable Refinance Program would double in size to assist about 900,000 more homeowners.
http://jlne.ws/u5fnqv
Commercial mortgage group spent $150,000 lobbying
AP via Yahoo! News
The Commercial Real Estate Finance Council, which represents buyers and sellers of investments backed by commercial property loans, spent $150,000 in the third quarter lobbying the federal government, according to a recent disclosure report.
http://jlne.ws/tbWG1N
Economic News
ADP says companies added 206,000 workers in November
Los Angeles Times
Companies added more workers than anticipated in November, easing concern the job market is stagnating in the third year of the U.S. recovery, according to a private report based on payrolls.
http://jlne.ws/vPrRrt
Federal Reserve Reports 'Slow to Moderate' Expansion in 11 of 12 Districts
Bloomberg
The Federal Reserve said the economy expanded at a "moderate" pace in 11 of 12 districts, led by gains in manufacturing and consumer spending.
http://jlne.ws/rscTrN
Fed Says Household Debt Declines by 0.6% in Third Quarter
BusinessWeek
Household debt in the U.S. declined by 0.6 percent in the third quarter as mortgage balances shrank, according to a survey by the Federal Reserve Bank of New York.
http://jlne.ws/ryispj
Firms & Banks
Ermotti ousts chief risk officer at UBS
By Haig Simonian in Zurich - Financial Times
Sergio Ermotti flexed his muscles for the first time barely a fortnight after being confirmed as UBS’s chief executive with the abrupt departure of Maureen Miskovic as chief risk officer.
http://jlne.ws/uJIBGD
UBS brings back old risk boss after trading scandal
Reuters via Yahoo! News
ZURICH (Reuters) - UBS appointed Philip Lofts back to his former role as chief risk officer on Thursday, removing Maureen Miskovic with immediate effect after less than a year in the job following the Swiss bank's $2 billion trading scandal. In a sign new Chief Executive Sergio Ermotti -- appointed after the scandal -- is beginning to make his mark on the crisis-shaken bank, he also gave new ...
http://jlne.ws/va2S6z
UBS announces leadership changes
Press Release
Philip J. Lofts, CEO UBS Group Americas, resumes his former role as UBS's Group Chief Risk Officer (CRO). Philip J. Lofts was Group CRO between November 2008 and December 2010, becoming CEO UBS Group Americas in January 2011. He joined UBS in 1984. Maureen Miskovic, Group Chief Risk Officer since January 2011, will leave UBS.
http://jlne.ws/tZ8vI7
Santander May Scale Back U.K. Presence
BY MARGOT PATRICK - WSJ
LONDON—Proposed U.K. bank reforms could result in a smaller presence in the U.K. for Banco Santander SA, Santander UK Chief Executive Ana Botin warned U.K. lawmakers in a letter published Thursday, as she and other U.K. bank bosses said they expected the rules to cost far more than their creators' estimates.
http://jlne.ws/rrSvzR
Deutsche Bank Begins Talks With Fund Bidders
Bloomberg
Deutsche Bank AG, the biggest German lender, has begun talks with suitors for its asset-management arm and may be open to a breakup of the division, said people with knowledge of the matter.
http://jlne.ws/tY2BzA
Goldman Sachs Chief Blankfein May Be Deposed in Gupta Case
BusinessWeek
Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein and six others may be questioned under oath by lawyers for the Securities and Exchange Commission and Rajat Gupta, who was charged with insider trading as part of the Galleon Group LLC investigation.
http://jlne.ws/sA8Ylj
J.P. Morgan Expands Prime Custody Service
http://jlne.ws/tNkhhs
Regulators
Fed's Yellen Sees Scope for More Easing to Spur Recovery
BusinessWeek
Federal Reserve Vice Chairman Janet Yellen said the central bank has leeway to spur the U.S. recovery and reduce unemployment by buying more assets or clarifying its plan to sustain record-low borrowing costs.
http://jlne.ws/tEODcT
Fed's Williams Says Fiscal Aid 'Badly Needed' for Growth
BusinessWeek
Federal Reserve Bank of San Francisco President John Williams called for fiscal aid for the economy, saying government actions beyond Fed easing are imperative for bolstering the recovery and reducing joblessness.
http://jlne.ws/rFk1sG
Fed's Lockhart 'Skeptical' More Bond-Buying Will Aid Growth
BusinessWeek
Federal Reserve Bank of Atlanta President Dennis Lockhart said expanding securities purchases is unlikely to give a sufficient boost to U.S. growth, without ruling out the strategy or other easing options.
http://jlne.ws/vlnqBk
Hoenig Says He Doesn't Support Bailouts for Too-Big-to-Fail
BusinessWeek
Federal Deposit Insurance Corp. nominee Thomas Hoenig told lawmakers that large financial firms must be accountable for their own capital and risk-taking and shouldn't count on government help in the event of a collapse.
http://jlne.ws/v7glz7
Richmond Fed Chief Lacker Voted Against Liquidity Move
Nasdaq
Richmond Fed Chief Lacker Voted Against Liquidity Move
http://jlne.ws/tQUqwM
UK's Financial Services Authority: Swift Trade - Update
Press Release
The judicial review proceedings brought by Swift Trade and Peter Beck earlier this year to challenge the FSA’s decision to publish the decision notice dated 31 August 2011 have been withdrawn by consent. The court order confirming this was sealed on 16 November 2011. There was no order as to costs.
http://jlne.ws/vk5nxn
Global News
Brazil Signals No Shift Ahead in Monetary Policy After Cutting Rate to 11%
Bloomberg
Brazil's central bank signaled it will keep cutting interest rates at its current half-point pace as it tries to prevent Europe's spreading debt crisis from stunting growth in Latin America's biggest economy.
http://jlne.ws/tVfh9U
China Cuts Reserve Ratios as Europe Crisis Threatens Growth
BusinessWeek
China cut the amount of cash that banks must set aside as reserves for the first time since 2008 as Europe's debt crisis dims the outlook for exports and growth.
http://jlne.ws/tWfLsO
France's borrowing costs slip at 10-year bond auction
Market Watch
France's borrowing costs slip at 10-year bond auction
http://jlne.ws/t1J4uO
Santander May Scale Back U.K. Presence
BY MARGOT PATRICK - WSJ
Proposed U.K. bank reforms could result in a smaller presence in the U.K. for Banco Santander SA, Santander UK Chief Executive Ana Botin warned U.K. lawmakers in a letter published Thursday, as she and other U.K. bank bosses said they expected the rules to cost far more than their creators' estimates.
http://jlne.ws/rrSvzR
Greece’s Papademos Sends Letter of Commitment for Economic Plans
http://jlne.ws/uBwinH
Conversation Starter
Federal Reserve Bank of Atlanta: Longer-Term Deflation Probabilities Decline
Prices of Treasury Inflation-Protected Securities (TIPS) with similar maturity dates can be used to measure probabilities of a net decline in the consumer price index over the five-year period starting in early 2011. One measure of this deflation probability declined from 14 percent on Nov. 16 to 13 percent on Nov. 30, the lowest reading since mid-August. An alternative lower bound on the probability of deflation was 0 percent on Nov. 30, the same as two weeks ago.
http://jlne.ws/vExdwn
**CN: Atlanta Fed points to TIPS as economic gauge.
Sponsorship note: GFI Group now a sponsor of JLN Interest Rates, as well as MarketsReformWiki and MarketsWiki.
--Christine Nielsen
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Central Bank Liquidity Swaps
By Douglas Ashburn, Editor-at-Large, John Lothian News
Wednesday morning, the Federal Reserve, in conjunction with the world’s leading central banks, announced the expansion and extension of “liquidity swap lines” to the European Central Bank, Bank of England, Canadian National Bank, Bank of Japan, and the Swiss National Bank. The program allows these foreign central banks to enter into temporary swap agreements with the Fed at 50 basis points over the overnight interest swap rate (OIS + 50bp).
The announcement sparked a broad rally on Wall Street and throughout European markets. While it is widely understood that such swap lines tend to calm panicked markets, few people understand exactly what they are and what they do.
Back in May, I wrote an article for JLN FX explaining the role of central bank liquidity swaps (Following the Fed: Actions Speak Louder (and More Coherently) than Words, JLN FX, May 17, 2011). In the article, I explained that the swaps are designed to provide temporary dollar liquidity to foreign central banks during times of financial stress. At the height of the financial panic, the Fed had nearly $500 billion worth of these currency swaps on its books. As markets calmed, fewer and fewer of these short-term swaps were renewed upon maturity. Though the program had a preset end date, the Fed has, on several occasions, extended the date. Wednesday’s press release guarantees that the program will continue at least until February 2013.
Although liquidity swaps sound confusing, the concept is really rather simple. When a foreign central bank wishes to draw upon its line, it enters into two agreements with the Fed - an immediate exchange of its currency for dollars at the current exchange rate, and a binding agreement to repurchase its currency at the same exchange rate at which it was initiated plus interest from the Fed at an agreed-upon date in the future, usually less than three months. In the interim, the foreign central bank is able to provide dollar liquidity to financial institutions in its jurisdiction.
Why is this important, and why has it ignited such a rally? The short answer is that, in times of crisis, no other fiat currency has the same level of confidence as the U.S. dollar. No entity other than the U.S. Federal Reserve is capable of accepting unlimited amounts of these types of transactions onto its balance sheet. (Note to the gold bugs and Fed haters: I realize that there is certainly a natural limit to the Fed’s ability. The future of fiat money schemes is another column for another day). The bottom line is that the Fed provides the ultimate backstop for panicked markets.
This is not to say, however, that the Fed can and will prevent a “day of reckoning” for European markets. There is no free lunch. The Fed does not take on exchange rate risk (each end of the swap is conducted at the same rate). Nor does the Fed take on credit risk, that risk stays between the foreign central bank and the financial institutions to which it provides the dollar liquidity. Yesterday’s toxic assets are still toxic, non-performing loans are still likely non-performing. The Fed simply provides an intermediary by which to curtail the seizing-up of credit markets. My guess is that last week’s tepid bond auction in Germany really spooked the Fed and ECB.
One final note on central bank liquidity swaps: though the Federal Reserve is often criticized for its “veil of secrecy,” it does offer considerable transparency, provided one knows where to look. For example, every Thursday afternoon, the Fed releases its statistical survey, which includes a total of the factors affecting reserve balances. The running total of central bank liquidity swaps currently on the Fed’s books can be found near the bottom of Table 1. (Click HERE for the current issue.) Monitoring this number over time should give you a good idea how much credit stress exists among foreign banks.
Bottom line? The crisis in Europe is far from over. Central bank liquidity swaps have provided some temporary relief while Europe contemplates the future of the common currency, member bailouts, and fiscal unity.
Lead Stories
Fed Dollar-Funding Cut Shows Limits of Action
Bloomberg
The Federal Reserve-led global effort to ease borrowing costs for financial firms shows both the central bank’s power to jolt markets -- and the limits of its ability to alleviate the European debt crisis.
http://jlne.ws/swww2k
Federal Reserve statement on financial liquidity measures
Reuters via Yahoo! News
WASHINGTON (Reuters) - Following is a text of the statement issued by the U.S. Federal Reserve on Wednesday, when central banks from the world's leading developed economies said they will take coordinated steps to prevent a lack of liquidity in the global financial system. ...
http://jlne.ws/rvdu5C
Central Banks Take Joint Action to Ease Debt Crisis
New York Times
Six central banks, including the Federal Reserve and the European Central Bank, took coordinated action on Wednesday to ease the strain of the euro zone crisis on the world economy.
http://jlne.ws/uy1NDE
Central Banks Join To Battle Credit Crisis; Markets See Great Gains
NPR
By adding "liquidity" to the world's markets, the central banks aim to keep credit flowing.
http://jlne.ws/uZesQa
The European debt crisis in eight graphs
http://jlne.ws/s1I5YY
Fed's Fisher: swaps not aimed at bailing out Europe
Reuters via Yahoo! News
WASHINGTON (Reuters) - A top Federal Reserve official said on Wednesday that a decision to alter the terms of dollar swap lines with foreign central banks was meant to help economic growth, not bail out Europe. "We are not bailing out ... Europe," Dallas Federal Reserve Bank President Richard Fisher said in an interview with Fox Business Network. "We are trying to meet a shortage of dollars." He ...
http://jlne.ws/ttpBx0
Draghi Hints Again at Rate Cut in Europe
New York Times
The head of the European Central Bank, Mario Draghi, gave a downbeat view of the economy Thursday, while debt auctions in France and Spain performed well.
http://jlne.ws/tGUPGr
German Note Yields Fall Below Zero on ECB Outlook, Safety Demand
BusinessWeek
German one-year notes rallied, pushing the yield below zero for the first time, amid speculation the European Central Bank will intensify its economic stimulus and crisis-fighting measures.
http://jlne.ws/vn8H9y
Europe hits its debt ceiling
Washington Post
Imagine if, during the depths of the financial crisis, the Federal Reserve hadn't stepped in to save the economy. Imagine, instead, that Ben Bernanke had emerged every few days to offer delphic hints about the importance of a large stimulus package, a medium-term deficit reduction plan, and a financial-regulation bill. Maybe he even threw in some commentary about how states needed more fiscal ...
http://jlne.ws/s42dq7
Bernanke: Economy 'far from where we'd like it to be'
San Antonio Express-News
Bernanke: Economy 'far from where we'd like it to be' San Antonio Express-News Copyright 2011 San Antonio Express-News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Published 02:10 p.m., Wednesday, November 16, 2011 For the first time during his tenure as chairman of the Federal Reserve, Dr. Ben Bernanke met with U.S. Armed Forces at a Nov. 10 ...
http://jlne.ws/uocs8v
Comment on Federal Reserve, banks kept huge size of bailout secret, records show
Denver Post
It's time to break up the banks..take control of the Federal Reserve and start senate hearings and get Bush, Cheney, and the cabinet member who was overlooking the banking industry under oath and find out what they knew and when they knew it.
http://jlne.ws/uWfXGK
Dodd-Frank Law May Hinder Crisis Response by Policy Makers
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke and fellow U.S. policy makers may find themselves hampered in restoring financial stability should the European debt crisis spread to America.
http://jlne.ws/ukADFw
Bernanke Should Testify on Secret Fed Loans, Cummings Says
BusinessWeek
Federal Reserve Chairman Ben S. Bernanke should testify before a U.S. House of Representatives committee on the central bank's loans to Wall Street firms during the 2008 financial crisis, Representative Elijah Cummings said.
http://jlne.ws/u4hFwL
31 Banks That Will Face The Fed's Harshest Stress Tests
Forbes via Yahoo! News
The Federal Reserve required bank holding companies with total consolidated assets of $50 billion or more to submit capital plans for review on an annual basis. A total of 31 firms made the list. Source: SNL Financial
http://jlne.ws/uqQ95l
Fed Economist Promoted To Head Bank Oversight Unit
FOX Business
The Federal Reserve on Wednesday announced it was appointing economist Michael Gibson to head the central bank's division of banking supervision starting January 1.
http://jlne.ws/rFFJ7b
MF Global sets up CFTC fight over costs, security
Market Watch
MF Global Inc.'s bankruptcy and an estimated $1.2 billion in missing customer funds there is setting up a battle at the Commodity Futures Trading Commission over customer costs and if investors should have their funds parked in separate bank accounts.
http://jlne.ws/v8tsJM
Ex-FBI chief pledges independence in MF Global case
International Business Times
The trustee tapped to control the assets of MF Global Holdings promised an "independent" approach to the futures broker's bankruptcy in his first public comments since accepting the post.
http://jlne.ws/rpo09f
MF Global Customers Missing $1.2 Billion Denied Court Committee
BusinessWeek
MF Global Inc. brokerage customers, who may be missing more than $1.2 billion from their accounts, won't be allowed to form a committee to represent their interests in bankruptcy court, a judge ruled.
http://jlne.ws/vq2dmG
Hank Paulson And The Wall Street/Washington Axis Of Power
Forbes
The revelation that Treasury Secretary Hank Paulson. in July, 2008, just before the apex of the market meltdown, told a group of hedge fund managers-- many of them former Goldman Sachs stars-- that Uncle Sam had a plan to take over Fannie Mae and Freddie Mac-- wiping out their common stock and preferred shares-- was a terrible betrayal of the public trust, if accurate. Paulson had no business ...
http://jlne.ws/upiJkE
Consumer agency sees confusion on credit cards
Reuters via Yahoo! News
(Reuters) - In its first three months in operation, the U.S. consumer financial watchdog received more than 5,000 complaints from credit card customers, led by billing disputes and interest rate problems. The agency on Wednesday released the first batch of data collected on credit card complaints since it opened for business on July 21. "When consumers contact us, we get a snapshot of how the ...
http://jlne.ws/sTTdFj
U.S. Mortgage Relief Program Widens Its Scope
New York Times
The two-year-old Home Affordable Refinance Program would double in size to assist about 900,000 more homeowners.
http://jlne.ws/u5fnqv
Commercial mortgage group spent $150,000 lobbying
AP via Yahoo! News
The Commercial Real Estate Finance Council, which represents buyers and sellers of investments backed by commercial property loans, spent $150,000 in the third quarter lobbying the federal government, according to a recent disclosure report.
http://jlne.ws/tbWG1N
Economic News
ADP says companies added 206,000 workers in November
Los Angeles Times
Companies added more workers than anticipated in November, easing concern the job market is stagnating in the third year of the U.S. recovery, according to a private report based on payrolls.
http://jlne.ws/vPrRrt
Federal Reserve Reports 'Slow to Moderate' Expansion in 11 of 12 Districts
Bloomberg
The Federal Reserve said the economy expanded at a "moderate" pace in 11 of 12 districts, led by gains in manufacturing and consumer spending.
http://jlne.ws/rscTrN
Fed Says Household Debt Declines by 0.6% in Third Quarter
BusinessWeek
Household debt in the U.S. declined by 0.6 percent in the third quarter as mortgage balances shrank, according to a survey by the Federal Reserve Bank of New York.
http://jlne.ws/ryispj
Firms & Banks
Ermotti ousts chief risk officer at UBS
By Haig Simonian in Zurich - Financial Times
Sergio Ermotti flexed his muscles for the first time barely a fortnight after being confirmed as UBS’s chief executive with the abrupt departure of Maureen Miskovic as chief risk officer.
http://jlne.ws/uJIBGD
UBS brings back old risk boss after trading scandal
Reuters via Yahoo! News
ZURICH (Reuters) - UBS appointed Philip Lofts back to his former role as chief risk officer on Thursday, removing Maureen Miskovic with immediate effect after less than a year in the job following the Swiss bank's $2 billion trading scandal. In a sign new Chief Executive Sergio Ermotti -- appointed after the scandal -- is beginning to make his mark on the crisis-shaken bank, he also gave new ...
http://jlne.ws/va2S6z
UBS announces leadership changes
Press Release
Philip J. Lofts, CEO UBS Group Americas, resumes his former role as UBS's Group Chief Risk Officer (CRO). Philip J. Lofts was Group CRO between November 2008 and December 2010, becoming CEO UBS Group Americas in January 2011. He joined UBS in 1984. Maureen Miskovic, Group Chief Risk Officer since January 2011, will leave UBS.
http://jlne.ws/tZ8vI7
Santander May Scale Back U.K. Presence
BY MARGOT PATRICK - WSJ
LONDON—Proposed U.K. bank reforms could result in a smaller presence in the U.K. for Banco Santander SA, Santander UK Chief Executive Ana Botin warned U.K. lawmakers in a letter published Thursday, as she and other U.K. bank bosses said they expected the rules to cost far more than their creators' estimates.
http://jlne.ws/rrSvzR
Deutsche Bank Begins Talks With Fund Bidders
Bloomberg
Deutsche Bank AG, the biggest German lender, has begun talks with suitors for its asset-management arm and may be open to a breakup of the division, said people with knowledge of the matter.
http://jlne.ws/tY2BzA
Goldman Sachs Chief Blankfein May Be Deposed in Gupta Case
BusinessWeek
Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein and six others may be questioned under oath by lawyers for the Securities and Exchange Commission and Rajat Gupta, who was charged with insider trading as part of the Galleon Group LLC investigation.
http://jlne.ws/sA8Ylj
J.P. Morgan Expands Prime Custody Service
http://jlne.ws/tNkhhs
Regulators
Fed's Yellen Sees Scope for More Easing to Spur Recovery
BusinessWeek
Federal Reserve Vice Chairman Janet Yellen said the central bank has leeway to spur the U.S. recovery and reduce unemployment by buying more assets or clarifying its plan to sustain record-low borrowing costs.
http://jlne.ws/tEODcT
Fed's Williams Says Fiscal Aid 'Badly Needed' for Growth
BusinessWeek
Federal Reserve Bank of San Francisco President John Williams called for fiscal aid for the economy, saying government actions beyond Fed easing are imperative for bolstering the recovery and reducing joblessness.
http://jlne.ws/rFk1sG
Fed's Lockhart 'Skeptical' More Bond-Buying Will Aid Growth
BusinessWeek
Federal Reserve Bank of Atlanta President Dennis Lockhart said expanding securities purchases is unlikely to give a sufficient boost to U.S. growth, without ruling out the strategy or other easing options.
http://jlne.ws/vlnqBk
Hoenig Says He Doesn't Support Bailouts for Too-Big-to-Fail
BusinessWeek
Federal Deposit Insurance Corp. nominee Thomas Hoenig told lawmakers that large financial firms must be accountable for their own capital and risk-taking and shouldn't count on government help in the event of a collapse.
http://jlne.ws/v7glz7
Richmond Fed Chief Lacker Voted Against Liquidity Move
Nasdaq
Richmond Fed Chief Lacker Voted Against Liquidity Move
http://jlne.ws/tQUqwM
UK's Financial Services Authority: Swift Trade - Update
Press Release
The judicial review proceedings brought by Swift Trade and Peter Beck earlier this year to challenge the FSA’s decision to publish the decision notice dated 31 August 2011 have been withdrawn by consent. The court order confirming this was sealed on 16 November 2011. There was no order as to costs.
http://jlne.ws/vk5nxn
Global News
Brazil Signals No Shift Ahead in Monetary Policy After Cutting Rate to 11%
Bloomberg
Brazil's central bank signaled it will keep cutting interest rates at its current half-point pace as it tries to prevent Europe's spreading debt crisis from stunting growth in Latin America's biggest economy.
http://jlne.ws/tVfh9U
China Cuts Reserve Ratios as Europe Crisis Threatens Growth
BusinessWeek
China cut the amount of cash that banks must set aside as reserves for the first time since 2008 as Europe's debt crisis dims the outlook for exports and growth.
http://jlne.ws/tWfLsO
France's borrowing costs slip at 10-year bond auction
Market Watch
France's borrowing costs slip at 10-year bond auction
http://jlne.ws/t1J4uO
Santander May Scale Back U.K. Presence
BY MARGOT PATRICK - WSJ
Proposed U.K. bank reforms could result in a smaller presence in the U.K. for Banco Santander SA, Santander UK Chief Executive Ana Botin warned U.K. lawmakers in a letter published Thursday, as she and other U.K. bank bosses said they expected the rules to cost far more than their creators' estimates.
http://jlne.ws/rrSvzR
Greece’s Papademos Sends Letter of Commitment for Economic Plans
http://jlne.ws/uBwinH
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