TOKYO, Nov 28- Japanese government bond yields on Friday turned negative for the first time as the Bank of Japan's massive asset-purchase scheme aimed at boosting inflation and reviving the economy led to a severe shortage of bonds in the market. Record low interest rates in Europe have seen yields in Germany and Switzerland turn negative, prompting European...» Read More
Financial market turbulence leading to tighter mortgage lending standards noticeably hurt housing activity in most Federal Reserve districts in recent weeks, adding uncertainty about the recovery of the downtrodden housing sector, the Fed said on Wednesday.
Stocks closed broadly lower and the Dow saw a triple-digit loss amid mixed signals from the Federal Reserve and weak economic data. "I think the market is going through a tremendous amount of uncertainties," said John Manley, private client strategist at Smith Barney.
Pending sales of existing U.S. homes plunged by a record 12.2 percent in July, and private employers hired the fewest workers in more than four years in August, according to reports released Wednesday that point to a weakening U.S. economy.
I couldn’t have been less welcome if I were a subprime borrower begging a bank for a jumbo loan. There I stood, in the early September heat, smack in front of the visitor's entrance of the Federal Reserve, as the CEOs of the nation’s very top home builders filed out of a meeting with the Fed Chairman. They may not have marched in lock step, but their refusal to talk to me was in dead-bolt lock step.
Ben Bernanke's comments last week that "we will pay particularly close attention to the timeliest indicators, as well as information gleaned from our business and banking contacts around the country" is causing traders to focus their attention on the Beige Book, which is out at 2:00 today.
Euro zone growth next year could be weakened by the credit crisis triggered by high-risk U.S. mortgage debt, the chairman of euro zone finance ministers, Jean-Claude Juncker, said on Wednesday.
Futures lower this morning for several reasons: 1) LIBOR (London Interbank Offering Rate) higher in London; this is important becuase a large amount of corporate financing is tied to it. 2) Challenger, Gray & Christmas August job cuts up 85% from July, 21.7% from same period last year.
Applications for U.S. home loans rose last week, while the highest adjustable rate mortgages in over six years put another nail in the coffin of the once-torrid sector, an industry group's data showed on Wednesday.
The Reserve Bank of Australia (RBA) said Wednesday its board decided to leave the cash target rate at 6.50 percent after Tuesday's monthly policy meeting.
Richmond Federal Reserve Bank President Jeffrey Lacker said on Tuesday he would back an interest rate cut if the evidence pointed to slowing U.S. economic growth and diminished inflation, but he warned that this outcome was by no means automatic.
All 12 regional Federal Reserve banks asked the U.S. central bank's board to hold the cost of emergency loans steady in July and the first week of August, with most bank directors seeing little threat from tightening credit conditions.
Lower short-term bond prices are being seen as a sign of less fear by the Street, which is helping support stocks this morning. Trading desks falling all over themselves this morning advising clients on how to play the expected September volatility. After years where no one made money playing volatility, that is the big call.
Central bankers and politicians are in the business of confidence building. Without it, markets - financial or otherwise - do not function. Both Bush and Bernanke did what they are tasked to do...and middle America now believes it may get a reprieve on foreclosure of its mortgage and the credit markets are starting to convince themselves a September rate cut is a foregone conclusion.
An excellent source, Janet Tavakoli, who knows more about the credit markets and asset-backed securities than I ever ever want to, sent me the following note over the holiday weekend. I consider it worth sharing, despite its conclusion, with which some may disagree. Not my place to take a side, but I do think, on the blog, opinions, especially from someone of her caliber, are worth sharing...
Though Ben Bernanke did not come out with a billboard and say he was cutting rates, there was ample indication that he stood ready to act: "It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions...
Economics is known as an imprecise science and one might need look no further than the business of calling recessions to see that. Unlike the weather, recessions arrive before you know it and depart under the same circumstances.
"It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions. But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy."
The Fed will take the necessary steps to shelter the economy from turmoil in financial markets but will not bail out investors, Chairman Ben Bernanke said.
A sharp drop in investment and government spending more than halved quarterly euro zone growth for April to June, but this is unlikely to stop further ECB interest rate rises as analysts expect the economy to pick up.