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An Italian banking crisis and mark-to-market rules
Italy's 10-year sovereign bond yield has risen from 1.78% at end of April and prior to the general election to 3.66%. That's the highest since the beginning of 2014 and the yield is still rising. Domestic banks and Italian life insurers are…
Income inequality as a sovereign rating input, Italy flouting EU fiscal rules
1 - Moody's: Widening income inequality will weigh on US credit profile
Rising income and wealth inequality is a key social consideration that will affect the credit profile of the United States (Aaa stable) through multiple rating factors,…
On the Kavanaugh nomination battle and partisanship
The last post I wrote was from a Republican partisan perspective. And it told a story about Trump remaking the party in his image. I will have more to say about that later from a non-partisan view. But, right now, I want to focus on…
How Trump remade the Republican Party in his image
This is going to be a post framed from a partisan Republican perspective. The nomination fight over Supreme Court Associate Justice made the Republican Party close ranks to rally around their embattled nominee. In the end, Donald Trump came…
Market shift to bear steepening as important as regime shift under Powell
Back in late February, I told you there was a new hawkish tone coming from the Fed that I believed meant an acceleration of the Fed's rate hike timetable. When Lael Branard got onboard, I knew a regime shift was at hand.
This has proved to…
More evidence that the Fed will accelerate its timetable in 2019 as it did in 2018
Real quick here
Atlanta Fed President Raphael Bostic has added his voice to the hawkish chorus at the Fed. And what he has said bears noting because of what it means about the Fed's policy path.
In a speech today at the 57th Annual…
More on the impact of bear steepening on risk assets
Shares are down today as the FANG stocks retreat due to investor concern about growth companies in a period of rising rates. This is only a one-day impact though. The question is whether the caution regarding riskier assets will endure.
No…
US situation: Conflict with China and Russia plus turmoil domestically
Conflict is the watchword for what I'm seeing in the US now. Though the US is settling trade disputes with allies, the tension internally and with geopolitical rivals Russia and China has increased.
In the case of China, I would look at…
Jobs report makes December rate hike a lock, raises chance of four hikes in 2019
The latest monthly report on the employment situation in the US saw the unemployment rate dip to its lowest level since 1969. While the addition to non-farm payrolls was below expectations, upward revisions to prior months made this a very…
On the yield curve’s bear steepening in a period of cyclically low credit spreads
I was off last week when the Fed raised rates a quarter percentage point. But I promised to comment on the Fed's action when I returned. I am doing so now.