Friday's nonfarm payrolls report easily beat Wall Street expectations but may not be quite what Wall Street wanted.» Read More
Markets Await European Central Bank News Conference (CNBC via Reuters) "The European Central Bank kept interest rates on hold on Thursday at a policy meeting expected to see it keep unlimited liquidity operations in place for longer as the euro zone debt crisis rages unabated. But the ECB is unlikely to announce mass new bond purchases at a 1330 GMT news conference, despite growing speculation that it could rush through new anti-crisis measures, including government bond buying on a much larger scale."
Fed May Be ‘Central Bank of the World’ (Business Week via Bloomberg) As analysis of Fed data begins to trickle in, the global ramifications of the Fed's policy actions during the height of the 2008 crisis have been called into question. Particularly the assistance granted to non-U.S. financial institutions: "Federal Reserve data showing UBS AG and Barclays Plc ranked among the top users of $3.3 trillion from emergency programs is stoking debate on whether U.S. regulators bear responsibility for aiding other nations’ banks. UBS was the biggest borrower under the Commercial Paper Funding Facility, with $74.5 billion overall, more than twice as much as Citigroup Inc., the top U.S. bank recipient, according to the data released yesterday.
London-based Barclays Plc took the biggest single amount under another program that made overnight loans, when it got $47.9 billion on Sept. 18, 2008."
The Federal Reserve today released a trove of data on the emergency loans it made under a variety of programs during the financial crisis. The Fed’s data includes details on more than 21,000 transactions with financial companies and foreign central banks.
The data shows an unprecedented level of support for the global financial markets coming from the Fed, implying that the level of financial distress was perhaps even greater than previously understood.
The previously confidential data was required to be made public by a provision of the Dodd-Frank financial reform law. Senator Bernie Sanders, the independent from Vermont, pushed for the provision to require greater transparency on the part of the Fed.
During the course of the financial crisis, the Fed launched a host of emergency programs that added $3 trillion of liquidity to the markets. Although many of the programs have been closed, the Fed still holds many of the assets it purchased.
While the Dodd-Frank law requires transparency for the new programs, it doesn’t require that the Fed reveal which financial companies turned to its traditional discount window during the crisis.
The Fed released information on at least eight different programs today. Below is our analysis of the use of the programs, based on our first reading of the data.
A preliminary analysis of the Primary Dealer Credit Facility (PDCF) source data released today by the Fed would seem to indicate a startling fact: Approximately 36 percent of the collateral posted, on average, was in the form of equity securities or junk grade debt.
Furthermore, only approximately 1.3 percent of the collateral, on average, was of the type traditionally posted at the Fed's Discount Window: U.S. Treasury or Agency Debt.
\(Those numbers, however, are difficult to interpret—because collateral might be counted multiple times. John Carney explained earlier today : "Although the total numbers appear very large, the Fed never had anywhere near $8.95 trillion of loans outstanding under the program. The loans made under the PDCF were overnight loans, which were rapidly repaid or rolled over into new loans. This inflates the total number because the Fed counts each roll-over as a new loan."\)
JoAnn "Jodi" Crupi, a former Madoff employee was taken into custody at her home in Westfield, N.J., according to the FBI. Crupi had worked for Madoff for more than 25 years.
If the markets were a person, it would be a psychologists dream. Could you imagine the billing on the fears and economic worries plaguing investors?
Diane Swonk, Chief Economist & Senior Managing Director at Mesirow Financial, talked to me about a host of issues that have been driving some of us to neuroses.
Although the Federal Reserve made loans totaling $8.95 trillion to primary dealers in exchange for a wide range of collateral under its Primary Dealer Credit Facility, the size of the facility was likely never more than a fraction of that amount.
Beginning in March of 2008, the Fed undertook 1,376 transactions under the facility, with loans ranging from a $10 million to nearly $48 billion. The largest single loan went to Barclays Capital on September 18, 2008—the day after Barclays agreed to buy Lehman Brothers.
The biggest borrowers were Citigroup , Merrill Lynch and Morgan Stanley , each receiving loans that total more than $1 trillion.
Although the total numbers appear very large, the Fed never had anywhere near $8.95 trillion of loans outstanding under the program. The loans made under the PDCF were overnight loans, which were rapidly repaid or rolled over into new loans. This inflates the total number because the Fed counts each roll-over as a new loan.
UBS has launched a pilot program that will allow its employees to use iPhones and iPads to receive work email, according to a person inside of the Swiss bank.
It’s yet another blow to Blackberry maker Research In Motion’s quasi-monopoly over the Wall Street smart phone market.
A host of other Wall Street firms have already taken the plunge into Apple’s smart phones. Credit Suisse has a pilot program allowing employees to use iPhones, according to people familiar with the matter. Bank of America has begun phasing in iPhones, according to one person at the bank. JP Morgan Chase is reportedly experimenting with the iPhone. Skadden Arps, the powerhouse Wall Street law firm, buys iPhones for attorneys who choose them, and pays for the data plan.
The ongoing infiltration of the iPhone into Wall Street could create a serious problem for RIM.
Gold and silver continue to confound the naysayers, moving higher along with the U.S. dollar as investors flock to so-called safe haven investments.
Taking the pulse of the market, the overriding theme is fear of the crisis in Europe—here is some of the commentary:
Citing concerns about sovereign risk in Europe and the stand-off in Korea, Rohit Savant, Sr. Commodity Analyst at CPM Group says investors are buying "gold, silver, platinum in that order". And while there might be some profit taking into a rally, he says investors see sell-offs as buying opportunities.
Ashraf Laidi, CMC Markets Chief Market Strategist says, "...surging Eurozone bond spreads and a broadening selloff in the single currency \(euro\)" are helping to feed investor demand for gold. "This is a repeat of the Feb-June period when the yellow metal broke to new highs due to uncertainty with Greece and Spain."
The falling out between Bill Gross and his one-time partner Mohamed El-Erian has quickly turned into one of the ugliest bust-ups in recent history.
The founder of a hedge fund with $21 billion under management provided three investing rules and three favorite stocks.
Former executives at Dewey & LeBoeuf were accused of using accounting gimmicks to fool banks and investors.