Posts Tagged ‘equity’
October 6, 2011
(Another day older and deeper in debt.)
No surprises from the ECB as they held rates at 1.5% as Trichet ended his reign at the helm of European banking by paying homage to the FONZ: Never admit that you were wrong. The ECB did announce that it was extending its policy of providing liquidity to EUROZONE banks at extremely low rates for a period of 12 and 13 months in an effort to prevent any immediate bank run. Also, the ECB announced that it would buy up to 40 billion euro of covered bonds, but that should not be a big deal for covered bonds are the best collateral so many banks will probably not be running for funding posting the highest rated debt.
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Tags:BOE, bonds, Canada, Dollar, Dow, ECB, equity, Eurozone, FTSE, Gilts, long bond, Loonie, Mervyn King, MPC, nonfarm payrolls, QE, RORO, S&P, stocks, U.S., unemployment, zero interest rate
Posted in BOE, Canada, Central Banks, ECB, unemployment, United States | Leave a Comment »
April 11, 2011
The markets were a bit heavy today as profit taking set in amid rumors that GOLDMAN was selling some long-held commodity trades. I cannot confirm the rumors as nobody from the hallowed tower called to let me know but the rumors weighed heavily on the commodities and certain commodity-related currencies. The GOLD made all time highs and the SILVER put in 31-year highs and both wound up closing lower on the day. Such price action in the precious metals would serve warning about a correction, but as usual I advise consulting your favorite technician or book on technical analysis to determine the best course of action.
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Tags:Bernanke, Bill Dudley, equity, Fed, Gold, Goldman Sachs, Janet Yellen, Long Term Capital Management, silver
Posted in Commodities, Federal Reserve, Gold | 1 Comment »
March 31, 2011
The U.S. unemployment report will be issued on Friday at the regular time: 7:30 CST. It seems that the consensus is for 210,000 nonfarm payroll, a rate of 8.9 percent and an increase in hourly wages of 0.2 percent. It seems that a 300,000-plus number is in the cards which is why the FED Presidents that are not of the perma-dove camp are ramping up the anti-inflationary rhetoric. Today, Minneapolis FED President KOCHERLAKOTA caused a late move in the DOLLAR, METALS and SHORT-DATED interest rates as he raised the possibility of the FED raising rates by 75 BASIS POINTS. The DOLLAR had been lower all day as month- and quarter-end positioning allowed the power trend funds to push their profitable positions in the desired direction, but KOCHERLAKOTA did cause a late reversal with his aggressive comments.
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Tags:Dollar, equity, Euro, Eurodollars, Fed, interest rates, Kocherlakota, metals, NFP, QE2, Taylor rule
Posted in Currency, Federal Reserve, unemployment, United States | 5 Comments »
February 8, 2011
JPMORGAN said yesterday that GOLD will be an acceptable pledge of collateral, even in repo operations. This revelation isn’t new as the CME GROUP and other clearing entities arranged for this last year.
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Tags:3-Year Treasury, Bernanke, bonds, CME Group, ECB, equity, Fed, Gold, Gold-backed bonds, IMF, JPMorgan, PIIGS, QE2, vaults
Posted in Debt Market, Federal Reserve, Gold | 1 Comment »
December 13, 2010
Something to put on your radar screens for the new year: contingent capital, or CoCo bonds. These instruments are contingent convertible and will be a very respected form of TIER 1 capital under the foggy regulations of Basel 3. The regulators like these instruments as they are DEBT that converts to equity if/when the bank-in-question’s equity/capital ratio falls below a certain level. Rather than the BOND holders getting a free ride and the equity owners bearing the burden with an equity raise, the CoCos will automatically convert to EQUITY, which will lower the level of DEBT and increase equity capital to a regulatory acceptable level. Credit Suisse announced it’s going to do a $30 billion CoCo so you can be certain that other large multinational banks will be joining in. It has yet to be determined what effect CoCos will have on the markets overall. If its popularity catches on, as I suspect, it could provide a boost to the global behemoths as it would lower the need to float more stock to reach the needed capital levels.
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Tags:Bernanke, Canada, CoCo bonds, Credit Suisse, Debt, equity, Fed, FOMC, Mark Carney, PPI, QE2, RBC, retail, Ron Paul, trade balance
Posted in Canada, Debt Market, Federal Reserve, FOMC, United States | 3 Comments »
December 5, 2010
Friday’s U.S. unemployment report was far less robust than anticipated. This consensus miss led to a selloff in the DOLLAR and a rally in commodities as the weak number gave rise to the need for more aggressive FED action. At first blush the GOLD was sold and other commodities also were falling but that didn’t last long as the risk-on trade gained the upper hand on the full execution of QE2. The worst part of the unemployment data was that the RATE INCREASED TO 9.8 PERCENT and this is what drives the FED at this juncture.
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Tags:Aussie Dollar, Bernanke, Brazilian real, Bush tax cuts, Canadian Dollar, Dilma Rousseff, Dollar, equity, Euro, Fed, Gold, QE2, RBA, SEC, u.s. unemployment
Posted in Canada, Equity, Uncategorized, unemployment, United States | 3 Comments »
December 1, 2010
Okay, a new month arrives. Where November went out like a lamb, December roared like a lion. The equity markets across the globe put on a stellar performance as the ECB was rumored to have reversed course and began buying the BONDS of the peripheral European nations. The amount purchased was unknown but whatever the total it was enough turn around the damage done on Monday and Tuesday. German BUNDS were sold and Italian, Irish, Portuguese and Spanish were bought, but the Greeks barely moved. Spanish bonds were 18 basis points lower; Italy, 15; Ireland, 29; and Portugal, 30bp lower. The newfound support for PIIGS’ debt was enough to lift the gloom that has weighed upon EQUITY … at least for a day.
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Tags:bonds, ECB, EFSF, equity, Euro, european notes, Fed, PIIGS, QE
Posted in Europe, Federal Reserve, Sovereign Debt | 6 Comments »
November 4, 2010
In day one of the world held hostage, the FED‘s QE2 program proved a great success. The dollar declined. Commodities soared. Metals shined. The equity markets took its newfound wealth effect in full stride. And the Treasury market rallied. Even though the 30-year bond is not a major component of the FED‘s purchasing program, it too rallied strongly as the sub 2.5 percent yield on the 10-year note sent investors further down the curve looking for a little more yield. The FED got all the bang out of the “wealth effect” that it could as investors around the world have realized that their “cash was nothing but trash”–exactly the outcome the FED is looking to achieve.
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Tags:Bond, Brazil, China, Commodities, Dollar, ECB, equity, Fed, FOMC, G-20, Hu Jintao, Irish, LCH.Clearnet, Lula, metals, Nonfarm Payroll, QE2, Rousseff, Sarkozy, Treasuries, Trichet, unemployment
Posted in Debt Market, ECB, Europe, Federal Reserve, G-20 | 5 Comments »
November 4, 2010
Ok.OK. We got it —the FED did not wish to anger Mr.Market so he presided over an 11-1 vote for the further Quantitative Easing by another $600 billion spread throughout the next eight months. It was interesting to see that the DOLLAR rallied at first and that GOLD and other commodities were sold off. The S&Ps and other equities tried to break but they realized that BEN BERNANKE is the greatest thing, well, since SIR ALAN GREENSPAN. It seems that the FED has totally fallen into the trap of perpetuating the wealth effect to keep the economy from falling into a deflationary spiral. No matter how we look at this, the importance of EQUITY market gains is paramount as the FED believes that this is the key to unleashing the “animal spirits” that are necessary for capitalism to thrive.
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Tags:Alan Greenspan, Ben Bernanke, Debt, Dollar, equity, Fed, G-20, Gold, QE, SOMA, SPS, TEGWAR, Tim Geithner
Posted in Federal Reserve | Leave a Comment »
October 6, 2010
Let’s get the IMF and G-7 noise out of the way. As usual, we will hear and read about all the brotherly love that will be shared at the IMF gathering but in the present situation we will be having none of it. The acrimony in the international arena on all economic issues isn’t going to be assuaged over cocktails and photo ops. Last year we heard about all the agreements that had been reached on global financial regulations and of course the prevention of currency manipulation and intervention. In a year all of that has been relegated to trash heap. The emerging world has been asking for free trade and have been rebuffed. China will bear the brunt of the major currency manipulator but many others are seeking to join the Chinese.
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Tags:demand, Dollar, equity, Euro/Yen, Fed, G-7, IMF, IVEY, Lexus, Mercedes, PMI, QE, Yen
Posted in Canada, Currency, Europe | 8 Comments »