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The Credit Crisis Financial Stocks Short Journal
- Thread starter Daal
- Start date
From Bloomberg
The three-month London interbank offered rate in dollars, which is how much banks pay for loans, fell to 0.421 percent, from 0.428 percent on May 7. Thatâs after it jumped 8.2 basis points last week, the biggest increase since October 2008.
âThere were a lot of people who didnât realize how fully interrelated and largeâ the problems caused by the sovereign fiscal crisis were, said Brian Yelvington, head of fixed-income strategy at broker-dealer Knight Libertas LLC in Greenwich, Connecticut.
Libor-OIS Spread
The difference between three-month dollar Libor and the overnight indexed swap rate, the so-called Libor-OIS spread thatâs a barometer of the reluctance of banks to lend, jumped to 19.13 basis points today from 18.11 basis points on May 7. The spread, which earlier reached 20 basis points, is more than three times the 6 basis-point spread on March 15 and is at the highest levels since August.
The rate at which Royal Bank of Scotland Group Plc told the British Bankers Association it could borrow for three months jumped 14 basis points last week to 0.5 percentage point. Barclays reported rates that increased 11 basis points to 0.45, while Societe Generale SA, Franceâs second-largest bank by market value, said its rates climbed 8 basis points to 0.45 percentage point.
Rates being charged for short-term loans are still more than 90 percent below the record levels in 2008, as banks are in better shape to weather a market seizure than when the U.S. subprime mortgage market collapsed. The Libor-OIS spread reached a record 364 basis points in October 2008.
The three-month London interbank offered rate in dollars, which is how much banks pay for loans, fell to 0.421 percent, from 0.428 percent on May 7. Thatâs after it jumped 8.2 basis points last week, the biggest increase since October 2008.
âThere were a lot of people who didnât realize how fully interrelated and largeâ the problems caused by the sovereign fiscal crisis were, said Brian Yelvington, head of fixed-income strategy at broker-dealer Knight Libertas LLC in Greenwich, Connecticut.
Libor-OIS Spread
The difference between three-month dollar Libor and the overnight indexed swap rate, the so-called Libor-OIS spread thatâs a barometer of the reluctance of banks to lend, jumped to 19.13 basis points today from 18.11 basis points on May 7. The spread, which earlier reached 20 basis points, is more than three times the 6 basis-point spread on March 15 and is at the highest levels since August.
The rate at which Royal Bank of Scotland Group Plc told the British Bankers Association it could borrow for three months jumped 14 basis points last week to 0.5 percentage point. Barclays reported rates that increased 11 basis points to 0.45, while Societe Generale SA, Franceâs second-largest bank by market value, said its rates climbed 8 basis points to 0.45 percentage point.
Rates being charged for short-term loans are still more than 90 percent below the record levels in 2008, as banks are in better shape to weather a market seizure than when the U.S. subprime mortgage market collapsed. The Libor-OIS spread reached a record 364 basis points in October 2008.
Surprise surprise, MS taking back their calls for hike in Sep 2010
http://www.zerohedge.com/article/mo...til-2011-pushes-back-call-45-10-year-two-quar
I'm not sure that includes Greenlaw, it appears that its a guy named Jim Caron. In any event I'm sure they will claim 'due the extraordinary events in Europe, we were wrong, otherwise would have been 100% correct'
http://www.zerohedge.com/article/mo...til-2011-pushes-back-call-45-10-year-two-quar
I'm not sure that includes Greenlaw, it appears that its a guy named Jim Caron. In any event I'm sure they will claim 'due the extraordinary events in Europe, we were wrong, otherwise would have been 100% correct'
Rogoff, bailout wont work
http://www.cnbc.com/id/15840232?video=1490225554&play=1
http://www.cnbc.com/id/15840232?video=1490225554&play=1
Let's not forget this brilliance from RBS in mid-March. Has RBS issued a change to this outlook yet?
RBS sees Fed hiking in September, not June
By Deborah Levine NEW YORK (Market Watch) -- RBS Securities now expects the Federal Reserve to begin raising interest rates in September, pushing back its forecast for a June increase in the central bank's target lending rate. The firm pointed to the Fed's monetary-policy setting committee's reiteration on Tuesday that rates would stay low for an extended period. "Given that 'extended period' is generally interpreted to be six months, the prospects for a June rate hike now look extremely dim," said Michelle Girard, an economist at RBS, in a note Friday. Still, once the Fed starts raising rates, it will be done aggressively -- in half-percentage point increases at the last three meetings of the year, according to RBS. That would take the fed funds rate to 1.75% from a range of zero to 0.25% currently. Rate hikes will continue in 2011, pushing borrowing costs to 5%, the firm said. Economists surveyed by MarketWatch expect, on average, that the first rate hike will come in the first quarter of 2011.
RBS sees Fed hiking in September, not June
By Deborah Levine NEW YORK (Market Watch) -- RBS Securities now expects the Federal Reserve to begin raising interest rates in September, pushing back its forecast for a June increase in the central bank's target lending rate. The firm pointed to the Fed's monetary-policy setting committee's reiteration on Tuesday that rates would stay low for an extended period. "Given that 'extended period' is generally interpreted to be six months, the prospects for a June rate hike now look extremely dim," said Michelle Girard, an economist at RBS, in a note Friday. Still, once the Fed starts raising rates, it will be done aggressively -- in half-percentage point increases at the last three meetings of the year, according to RBS. That would take the fed funds rate to 1.75% from a range of zero to 0.25% currently. Rate hikes will continue in 2011, pushing borrowing costs to 5%, the firm said. Economists surveyed by MarketWatch expect, on average, that the first rate hike will come in the first quarter of 2011.
1233 GMT [Dow Jones] As doubts on EU's rescue plan to tackle the debt crisis emerge, borrowing costs in short-term funding market inch up again after a pause Monday. Data from the BBA showed the three-month U.S. dollar rate rose to 0.42281% from Monday's 0.42125%. The three-month dollar Libor/OIS spread widened to 19.3 BP from 18.5 BP Monday. In the US swap market, swap spreads also widen again after Monday's tightening. The two-year swap spread is 4.25bps wider at 32.25 bps while the 10-year spread is 1.75 bps wider at 4.75bps.
(min.zeng@dowjones.com)
(min.zeng@dowjones.com)
Gold is going strong, soundly beating the Dollar Index members
http://www.galmarley.com/Chart_pages/currency_charts.htm
http://www.galmarley.com/Chart_pages/currency_charts.htm
Looks like Greenlaw threw the towel
http://blogs.wsj.com/marketbeat/2010/05/11/rate-debate-update-goldmans-hatzius-ahead/
Of course, he blamed it all on Europe
http://blogs.wsj.com/marketbeat/2010/05/11/rate-debate-update-goldmans-hatzius-ahead/
Of course, he blamed it all on Europe
Carmen Reinhart on Greece
"Fiscal adjustment is not impossible. The list of countries that opted for austerity in the face of market pressures and succeeded includes Mexico in 1995, Korea in 1998, Turkey in 2001, and Brazil in 2002. They paid a price in terms of lost output, but by communicating a credible commitment to a sustainable budget path, market access was restored relatively quickly and growth rebounded. But those countries all started with debt loads significantly below Greeceâs and relied on significant exchange rate depreciation to gain an edge on international competitiveness."
Johnson and Reinhart answered questions here
http://economix.blogs.nytimes.com/
"Fiscal adjustment is not impossible. The list of countries that opted for austerity in the face of market pressures and succeeded includes Mexico in 1995, Korea in 1998, Turkey in 2001, and Brazil in 2002. They paid a price in terms of lost output, but by communicating a credible commitment to a sustainable budget path, market access was restored relatively quickly and growth rebounded. But those countries all started with debt loads significantly below Greeceâs and relied on significant exchange rate depreciation to gain an edge on international competitiveness."
Johnson and Reinhart answered questions here
http://economix.blogs.nytimes.com/
Quote from Daal:
Gold is going strong, soundly beating the Dollar Index members
http://www.galmarley.com/Chart_pages/currency_charts.htm
Daal, you report often on the signs the FED is looking for to evaluate it's policy.
You think the FED would have a problem with gold at 2K?