Why the Fed was talking to big money investors, leading to a major leak
I think I have the answer to at least one question: why was the Fed talking to big money investors in the first place. My thoughts follow below.
Browsing Tag
banks
US credit growth is decelerating across a variety of areas
This week all eyes will be on the Fed because of its expected interest rate hike and the messaging that will accompany its policy decision. But credit markets should also be focused elsewhere, because credit growth has been decelerating…
Financial conditions have eased enough to get the Fed to hike in March
For years, many Fed watchers have claimed that the Federal Reserve has a secret third mandate beyond inflation and full employment. And this past February 21st, for the first time a Fed President said directly that, indeed, the Fed does…
The re-nationalization of eurozone lending
While most analysts have been focused on credit growth which has re-emerged after the sovereign debt crisis, cross border inter-bank lending has decreased, fragmenting the euro zone along national lines. In a crisis scenario, one should…
The downside risks introduced by the UK Brexit referendum
The unexpected ‘Leave’ victory in the recent referendum on EU membership introduces considerable political risk by elevating tail risk scenarios to reasonable worst case status. However, in a global economy that is already slow and already…
Low interest rates and banks’ net interest margins
Since the Global Crisis, interest rates in many advanced economies have been low and, in many cases, are expected to remain low for some time. Low interest rates help economies recover and can enhance banks’ balance sheets and performance,…
Negative interest rates are just a tax on reserves that lowers net interest margins
The primacy of monetary policy continues unabated as central banks go further and further down the rat hole of increasingly desperate measures to boost demand. First, it was quantitative easing. Now, the latest scheme is negative interest…
How this business cycle ends due to credit writedowns
About a month ago, I wrote a post on how market contagion would happen due to deteriorating credit conditions in energy high yield. And while this doesn’t necessarily lead to recession or financial crisis, it has already meant a real…
Did lending by foreign banks really cause the Greek debt crisis?
There are a lot of competing narratives going around as to why Greece is in such trouble relative to the rest of the eurozone. A lot of this centers on whether Greek fiscal profligacy or poor credit controls by foreign banks was the main…
The coming Greek bank nationalization, bail-in and privatization
The existence of capital controls eliminates contagion and makes it possible to bail-in deposits that would normally be considered to have systemic consequences. The more I look at it, the less benign this bailout deal appears. Indeed it…