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’On the perils of plunging repo rates
Understanding repo markets is not easy. It’s a complex and very opaque market.
But there are some developments in Europe, which are worth following. One of them is the ‘specialness’ of German bonds being used for collateral funding — reflected by falling General Collateral rates — versus rising rates for other European debt markets.
[Gavyn Davies] A very big day for UK economic strategy
This is a very big day for the UK economy, with the MPC minutes at 10.30am [GMT] and the Budget at 12.30pm, so I am going to kick off with that.
I wrote a commentary on UK macro economic strategy for the FT on Wednesday,
The end of the home ownership “dream”
Government reports don’t normally make for interesting eulogies, but this one is an exception.
The Treasury-HUD report to Congress on the future of the US housing market is out and generating qualified praise (though little surprise).
Treasury targets LCB, Hizbollah and used car salesmen [corrected]
Correction: The fifth paragraph originally included a reference to the Daedong Credit Bank, rather than Banco Delta Asia. This was a mistake — as the links to the Treasury site and New York Times article show,
HM Banks ad infinitum
Calling experts in placing shares — a lot of shares:
… Your Majesty needs you.
That’s a chart from the National Audit Office’s just-released report on British taxpayer exposure to UK banks rescued during the crisis.
Go on, Treasury: buy dollars
What’s the best way for the US to show commitment to avoiding currency belligerence after pledging its faith at the latest G20 summit?
Answer, courtesy of BNY Mellon’s FX strategist Neil Mellor: it should buy dollars — and help weaken the yen.
Bullet casings on the floor, blades whirring in the distance
Aviator shades? Check. Wagner CD? Check. Money-abseiling kit? Err…
Mr Market is waiting for Fed chair Ben Bernanke’s speech at Jackson Hole. And, though he should know better, he is whispering to himself about more QE.
Money for nothing
Dire Straits wisely observed back in 1985 that it’s nice — but possibly derisible — to have people give you money for nothing.
Nevertheless, it happens to be the way to do it if you’re the US Treasury (H/T Clusterstock).
Hamps across America
There’s a key word missing in the below press release on the US Treasury’s Hamp programme:
WASHINGTON – Today, the Obama Administration released the next monthly report for the Making Home Affordable (MHA) loan modification program.
Did the FSA help push Citi to the brink?
Buried in the Congressional Oversight Panel’s 127-page November report, examining the ‘moral hazard’ involved in the US Government’s guarantees for financial institutions, is this tidbit:
(Footnote 193) Treasury conversations with Panel staff (Oct.
PPIP(ed)
Congratulations to Western Asset Management.
The US fixed income specialist has just raised enough money to participate in the US government’s Public-Private Investment Program, the PPIP.
From the Associated Press:
Gilty opportunism?
Here’s a thought from Monument Securities’ Marc Ostwald.
The UK’s Office for National Statistics has just published a consultation on proposed changes to the measurement of mortgage interest payments within the Retail Prices Index — one of the main inflation rates in the UK;
Tarp exposes US to $23,700bn risk, watchdog says
Neil Barofsky, special inspector-general for the troubled asset relief programme, said that the various US schemes to shore up banks and restart lending exposed federal agencies to a risk of $23,700bn – a vast estimate that was immediately dismissed by the Treasury,
US Treasury pushes ahead with toxic asset plan
The US Treasury on Wednesday pushed ahead with scaled back plans for public- private partnerships to buy toxic assets, naming nine fund managers and allocating $30bn of public funds, but without securing any further backing from the Federal Reserve,
Tabulating financial reform, Darling
Chancellor Alistair Darling’s proposals for financial reform is now available online. A summary:
Related links:
Darling outlines tougher bank regulation – FT
Treasury to delay bank overhaul
The centrepiece of the Government’s plan to overhaul financial regulation has been delayed, perhaps until after the election, the Telegraph said, without citing sources. The long-awaited White Paper on financial regulation,
Smoke, mirrors and Treasury sales
In Friday’s FT, former Fed chairman Alan Greenspan writes (our emphasis):
Excess capacity is temporarily suppressing global prices. But I see inflation as the greater future challenge. If political pressures prevent central banks from reining in their inflated balance sheets in a timely manner,
FSA releases ‘not-so-stressy’-test methodology
Hot off the wires at the FSA – the shock announcement of the much-speculated upon UK stress-test methodology. The highlights: Britain’s stress-tests presumed a peak-to-trough fall in GDP of over 6 per cent,
US Treasury proposes new regulatory framework for derivatives
The US Treasury on Wednesday proposed a sweeping new framework within which to regulate over-the-counter derivatives, including those notorious credit default swaps.
Reuters reports (emphasis FT Alphaville’s):
More than 100 fund managers apply to PPIP
Applications to participate in the investment side of US Treasury sec Tim Geithner’s Public-Private Investment program have now closed. But hey, it’s good to know that “minorities, veterans and women” have been actively “encouraged”
FDIC, the ‘F’ stands for…
Well, it’s not ‘funding’, anyway.
While the financial problems facing the Federal Deposit Insurance Corporation (FDIC) have been apparent for some time, this chart is still striking.
That’s the Deposit Insurance Fund Reserve ratio released on Wednesday in FDIC’s Q4 2008 banking profile.
Terp-gate, revisited
Remember this – former Treasury secretary Hank Paulson’s dramatic November U-turn on the Tarp?
Paulson abandoned his original Tarp plan to snap up toxic assets in favour of buying (toxic) bank shares.
Geithner, the early maths
Anyone worried that Geithner’s toxic asset plan would encourage investors to overpay for toxic bank assets should be relieved. It doesn’t.
What they should be worried about, however, is whether it will actually do anything for the banks.
Fear and loathing on the Geithner Toxic Asset Plan ’09
Oh dear. Something of a blogging war has erupted over the leaked outline of Tim Geithner’s toxic asset plan.
The New York Times outlined the skeleton of the proposed programme on Friday:
WASHINGTON – The Treasury Department is expected to unveil early next week its long-delayed plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions,
What price a warrant? The unaccountable TARP…
On the 20th October 2008, TARP warrant guidelines specified:
In all cases, the Treasury also must obtain warrants for common stock of the applicant. The terms of the warrants are explained in the Treasury agreements available on the Treasury web site.
AIG 2008 loss: $99bn
AIG is to money as black holes are to light: sucky.
NEW YORK–(BUSINESS WIRE)–American International Group, Inc. (AIG) reported today that continued severe credit market deterioration and charges related to ongoing restructuring activities contributed to a record net loss for the fourth quarter.
The shrinking US economy
The US Q4 gdp contraction has been revised to 6.2 per cent from a previous 3.8 per cent estimate. All we can say is ouch.
From Reuters:
NEW YORK, Feb 27 (Reuters) – The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday,