Back in April, while she was quietly jockeying to make sure her name was placed at the top of the list to succeed Mario Draghi at the ECB, Christine Lagarde detoured into the topic of central bank independence. At a joint press conference held with the Governor of the Reserve Bank of South Africa, Lesetja Kganyago, as the Managing Director [...]
As of today’s close, there are only 22 trading days in the entire history of Japan’s government bonds (JGB) where the yield (or “yield”) on its 10-year paper has been more negative. Those 22 all came clustered together in June and July 2016. In other words, Japan’s bond market is today comparable only to that one period at the utter [...]
As of trading on Friday, federal funds for the third time is now back to above where all this began. For much of 2017 and Reflation #3, the effective federal funds rate (EFF) remained steady at 16 bps above the RRP “floor.” Apart from month-end dumpings, it was consistent and predictable; the best of times, or at least what passes [...]
Critics of government debt, a group which really should include every taxpayer, like to point out how governments prefer to pay back that debt with hugely inflated currency. You don’t pay it off so much as inflate it away. Change the convertibility number for your local currency and, voila, a much more manageable credit profile emerges. Only, there are often [...]
The Reserve Bank of India (RBI) cut its benchmark money rate for the second straight meeting. Reducing its repo rate by 25 bps, down to 6%, the central bank once gripped by political turmoil has certainly shifted gears. Former Governor Urjit Patel was essentially removed (he resigned) in December after feuding with the federal government over his perceived hawkish stance. [...]
What was the difference between Bear Stearns and Lehman Brothers? Well, for one thing Lehman’s failure wasn’t a singular event. In the heady days of September 2008, authorities working for any number of initialism agencies were busy trying to put out fires seemingly everywhere. Lehman had to compete with an AIG as well as a Wachovia, already preceded by a [...]
Banking regulation is never easy. Shifting regimes and tightening things up a bit during a rip-roaring global economy, however, makes it much less stressful. Among global banking systems the one in India has lagged. Much of the rest of the world had moved on to higher capital requirements in addition to (sappy) liquidity constraints long ago so as to keep [...]
The news was one of those instances when you could see they were trying a little too hard. It didn’t make any sense, not anyway in the context to which it was delivered. On September 21, unnamed German officials were supposedly championing a megamerger in the banking sector. The country’s two largest financial institutions might be brought together to save [...]
True to form, whoever holds the government it is for them the best economy ever. It doesn’t matter political parties or otherwise affiliations. The rhetoric has become so unhinged that in the US former President Obama is trying to take credit for current President Trump’s economic “miracle” – that doesn’t actually exist. In India, the Modi government is following the [...]
Eurobonds are not a perfect substitute, but they may be someone’s only alternative. In some ways, Reflation #3’s weakness can be found originating in this context. The “rising dollar”, or eurodollar squeeze, of 2014-16 was a failure and even run on credit-based dollar funding offshore. If banks won’t deliver dollars, what’s left? Bonds. There has been an offshore Eurobond market [...]
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