CHINA’s COMING CRACKUP: Banker jumps to death over bad loans
(Beijing) – In an apparent suicide, a high-level executive of a state-owned investment company leapt to his death in downtown Beijing.
Wang Shiqiang, 60-year-old chairman of the board of supervisors for China Jianyin Investment Securities Co., appeared to have jumped to his death on the afternoon of April 16 from the top of the office tower that houses China Jianyin.
In an issued [...]
Desperate for Returns, Investors Pour Into Junk
The money manager’s job is supposed to be straightforward: Take people’s cash and put it to work. The more money that comes in, the bigger the manager’s paycheck.
So why would two of the country’s largest fund managers tell would-be investors in junk bonds—the common name for bonds issued by companies with the lowest credit ratings—to go away?
The short answer is that it’s for their [...]
* Domestic banks have bought heavily at Spanish bond sales
* Some close to reaching exposure limit, say market makers
* Two banks say buying debt normally at present
* No sign of strong demand from international investors
* Any cancelled auction could trigger full Spanish bailout
By Nigel Davies
MADRID, July 6 (Reuters) – Domestic banks that have backed Spain’s debt auctions with heavy buying could be reaching a limit for absorbing sovereign bonds, say [...]
Almost six out of ten Germans reject ceding budgetary sovereignty to European Union institutions and almost three quarters don’t want the EU to transform into a U.S.-style United States of Europe, Stern magazine said, citing a poll it commissioned.
A directly elected EU president was rejected by 63 percent of Germans while 59 percent said the Bundestag, the lower house of parliament, should keep its budgetary rights and 74 percent said the EU shouldn’t [...]
By David Waring
The Big Picture: Equity Prices and Bond Yields from 1800 to Present
Reuters: U.S. municipal bond sales to sink to $59.6 million, a 20 Year Low
John Orcutt: Muni Maturing? Proceed With Caution!
Learn Bonds: World Bond Funds: Do You Know the Risks?
BlackRock: The Road Ahead For Bonds
BondSquawk: A Look at the Chart of [...]
(Reuters) – U.S. municipal bond sales next week are expected to drop to the lowest weekly total in more than 20 years with issuance estimated at only $59.6 million, according to Thomson Reuters estimates on Friday.
The coming week will also mark a huge plunge in supply from this week’s estimated $9.5 billion in bond sales.
The sparse calendar comes as Wednesday’s Fourth of July holiday will shorten the coming trading week [...]
By William L. Watts
FRANKFURT (MarketWatch) — The cost of insuring Spanish and Italian government debt against default via instruments known as credit default swaps, or CDS, hit new records on Friday, according to data provider Markit. The spread on five-year Spanish CDS widened to 610 basis points from 596 basis points on Thursday. That means it would now cost $610,000 annually to insure $10 million of Spanish debt against [...]
April 25 (Bloomberg) — European lenders, more reliant than ever on emergency aid after borrowing $1.3 trillion from their central bank, may need additional cash infusions until policy makers stem the crisis engulfing Spain and Italy.
After more than 30 bond sales in the first quarter, no bank has sold unsecured debt this month, and the cost of insuring against default has soared to levels last seen in January. Financial stocks, [...]
(Updates with interest payments in seventh paragraph. For more on the region’s debt crisis, EXT4 <GO>)
April 3 (Bloomberg) — Spain’s public debt will rise to a record this year as it sells almost 37 billion euros ($49 billion) of bonds to finance a budget deficit that was more than twice the euro-region limit last year.
Total borrowing will reach 79.8 percent of gross domestic product after the country breached the European [...]
by Robert Wenzel
Economic Policy Journal
The answer: Very quickly.
Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations. Her writings are followed carefully by the top of the top at CFR. And to a significant degree she uses Hayekian business cycle theory in analyzing the economy. She also has the distinct honor of being hated and attacked by the Keynesian Paul Krugman.
In other words, take her very [...]
A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.
Sometimes Bernanke doesn’t even go that far. He simply says he doesn’t see inflation. The Fed chairman recently described the prospects for price increases across the board as “subdued.”
“Sudden” is more like it. The thing about inflation is that it comes out of nowhere [...]
It would appear that the German public (and political class to some extent) are beginning to see the European project in the same manner as we described back in July. As the increasing burden of saving the eurozone from its own excess falls on the shoulders of every Tobias, Dirk, and Heike taxpayer in Germany, even industry leaders, such as Wolfgang Rietzle, the CEO of Linde, this weekend according to Reuters, are [...]
When back in August, Europe declared a short selling ban of any financials (here we are willing to channel Romney, and make a $10,000 bet with anyone that said ban will never be lifted), and which as we predicted has had no favorable impact on bank stocks which have since tumbled, we suggested that the next step will also be the final one: the passage of laws prohibiting sales of any kind. [...]
Via Peter Tchir, of TF Market Advisors,
If I understand the process in Europe correctly, S&P has to provide 24 hour notice to the countries if they are going to change their ratings. S&P has Italy as A1 on negative watch. Moody’s is A2 with outlook negative. So S&P has Italy higher rated, so it would be weird if they didn’t downgrade them. But if they downgrade them, and they notified Italy, did [...]
Italian 10-year yield rises back above 7%
Italian bank shares follow UniCredit lower
ECB Takes Record Deposits Stoked by Emergency Lending Operations
Eurozone unemployment stays at record high
ECB’s Knot: Euro May Collapse If Greece Pushed Out
Soros Says Euro-Area’s Failure Would Have a ’Catastrophic’ Global Impact
UniCredit warns rights issue investors of euro break-up
Europe Banks Tie Up Assets in Covered Bond Sales: Credit Markets
Schools will be cut $4.8 billion if taxes don’t pass, Gov. [...]
Earlier today Germany tried to sell €6 billion of 10 Year bunds. It “sold” €3.644 at a 1.98% yield.Which meant the German debt agency had to retain, i.e., not sell, the 39% balance, or €2.356 billion. Said otherwise the offering was a complete disaster and as Reuters points out, one of Germany’s worst bond sales since the launch of the euro, and that much higher Bund yields are coming very soon to [...]
The Fed was hit with withdrawals of $83.3 billion last Wednesday, the largest withdrawals from its deposit accounts that were not associated with quarterly tax payments since February of 2009. $7 billion of that was the net cash transferred to the US Treasury from its note and bond sales less outlays. The Fed still had to meet the other $76 billion. These transactions were revealed in the Fed’s weekly H.4.1 [...]
1) Companies Stop Selling Bonds as Costs Jump by 40%: Euro Credit
“Company bond sales have ground to a halt in Europe, with August poised to end without a single offering as the sovereign debt crisis drives borrowing costs up by 40 percent.
“When spreads are moving so quickly, it’s very difficult to see clearly how to price new issues,” said Olivier Casanova, the head of financing and [...]
The U.S. plans to auction $32 billion of three-year notes tomorrow, $21 billion of 10-year debt on July 13 and $13 billion of 30-year bonds on July 14. The sizes are unchanged from the last time the U.S. auctioned these securities in June.
The $66 billion of offerings will be the first note and bond sales since the end on June 30 of the Fed’s $600 billion [...]
1) Can anyone comment on the “EuroDollar” and its impact on dollar dilution? In other words, are M1, M2 and “M3″ really accounting for “all” the dollars out there floating around? Is there any way to get visibility to this activity?
2) If foreign bond holders continue to get whacked by increasing rates, and they decide to start jumping out of US bonds, is it not similar to ‘squeezing a [...]
1) US fiscal health worse than Europe: China cbank adviser
“”For now, market attention is still on Europe and for the coming 6-12 months, it will not shift to the United States,” Li said, when asked about U.S. President Barack Obama’s plan to extend tax cuts for all Americans.
“But we should be clear in our minds that the fiscal situation in the United States is much [...]
City workers first to feel the pain (Editorial..Harrisburg)Â and Harrisburg looks to Act 47 to solve looming payroll crisis
Fed’s Bullard could back easing in $100 bln steps
Will Fed Buy Treasuries for an Extended Period? (ABC News)
One in five in Spain live in poverty: statistics office
Brazil Plans Overseas Bond Sales to Curb Real Gain
Dollar-triggered currency war harms both US and global economies: Chinese scholars
ECB Nowotny:Main Refi Rate Won’t Be Raised Before [...]
From today’s FT:
“..Christopher Neely, a researcher at the St Louis Fed, has done the work, following up on a study by Joseph Gagnon of the Peterson Institute for International Economics and three economists at the New York Fed.
Five times between November 2008 and March 2009 the Fed either announced or strongly suggested Large Scale Asset Purchases (LSAP, otherwise known as quantitative easing or printing money). The total eventually acquired [...]
1) Cost of Insuring Greek Debt Hits Fresh Record
“LONDONÃ¢â‚¬â€The cost of insuring Greek sovereign debt against default rose further in early trading Friday to hit a new record, amid growing market anxiety that Greece may suffer from a fall in tourist arrivals.
Greece’s five-year sovereign credit default swaps were quoted at 11.31 percentage points compared with Thursday’s closing level of 11.27 percentage points, according to data provider [...]
1)Ã‚Â Portugal Sells Debt, But Market Edgy
“Still, like other cash-strapped economies on EuropeÃ¢â‚¬â„¢s southern fringe, Portugal is having to pay up to borrow from the market: The average interest rate it paid today was 4.657% compared with 3.701% at an auction in late May.
And while worries about EuropeÃ¢â‚¬â„¢s debt crisis have ebbed of late, traders in the derivatives market remain on edge.
Earlier this morning, the cost [...]
1)Ã‚Â Gold Sales to Europe Jump on Crisis, Perth Mint Says
“June 4 (Bloomberg) — Gold sales to Europe from the Perth Mint surged in May as the Greek sovereign-debt crisis triggered a flight to haven investments, draining stockpiles at the producer of 6 percent of the worldÃ¢â‚¬â„¢s bullion. ”
2) US Corporate Bond Sales Fall on Sustained Europe Debt Concern
“June 4 (Bloomberg) — Sales of U.S. corporate [...]
“What now that stimulus packages are ending, money set to plunge, market control by insiders has to end, Fed doesnt need a monopoly, bond sales down, still high expectations for gold.”
“We believe an inflationary depression began in February of 2009, and little has changed. Since then factory output has increased, as have inventories and other outward signs, such as retail sales. We believe that one-year spurt is ending, unless a [...]