from Counterparties:

Capital raise

By Ben Walsh
April 9, 2014

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US banks need $95 billion more capital by 2018. A new federal rule will raise the leverage ratio – a bank’s capital versus its total assets – to a minimum of 5%, while all FDIC-insured banks will see their ratio rise to 6%.

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Euro we go again

By Ben Walsh
April 7, 2014

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The bond markets finally have something nice to say about Greece and Spain. Or at least Greece and Spain are reaping the benefit of ECB president Mario Draghi’s recent comments. Last week, Greek bond yields fell to pre-bailout levels, and the Spanish government sold $7 billion of debt at the lowest rates since the crisis -- lower, in nominal terms, than the US government is paying to issue Treasury notes.

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Environmental balance sheet

By Ben Walsh
April 4, 2014

Want to sign up for the Counterparties email? Click here. Climate change, the latest UN report finds, is very bad already – and it’s getting worse.

The NYT condenses the study’s gloomy findings: ice caps and sea ice are melting; droughts, heatwaves, and heavy rainstorms are intensifying; the ocean is acidifying; “fish and many other creatures are migrating toward the poles or in some cases going extinct”. The Economist says climate change can no longer be seen as a stand-alone risk. Instead, it is already interacting with social, political, and economic risks. All of which means, Philip Bump writes, “more violence, less food”.

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Watching for bubbles like a hawk

By Ben Walsh
April 3, 2014

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Fed governor Jeremy Stein, the central bank’s resident bubble cop, is resigning effective May 28. He will return to Harvard’s economics department, which he left in 2012.

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Multiplication nation

By Ben Walsh
April 2, 2014

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“You can't legislate demographics”, says Derek Thompson, surveying the economic drag of America’s low birthrate. Blame, in part, the world-record cost of giving birth in America, and the recession, for the decline of babies.

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Guilty Motors?

By Ben Walsh
April 1, 2014

Want to sign up for the Counterparties email? Click here. In the first three months of 2014, GM has recalled 6.3 million cars. Among those recalled are all 2005-2010 Chevy Cobalts, whose ignition switches have been faulted for 13 deaths so far.

GM CEO Mary Barra told Congress today that she “cannot tell you why it took years for a safety defect to be announced”.

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Flash mob

By Ben Walsh
March 31, 2014

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“The US stock market... is rigged.” That was Michael Lewis’ one sentence summation of his new book Flash Boys on last night’s 60 Minutes.

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Roasted Turkey

By Ben Walsh
March 28, 2014

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For the last 10 years, Turkey has been a growth miracle. It increased exports by afactor of ten; GDP and per capita income rose threefold. But the cornerstone of that economic success – political stability – is now under threat.

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Citi-wide failure

By Ben Walsh
March 27, 2014

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Citigroup can now claim worst-in-class stress test performance. For the second timein three years, the Federal Reserve rejected the bank’s capital plan. Citi proposed raising its dividend from a penny to 5 cents and repurchasing up to $6.4 billion in stock. However, the Fed rejected the plan, saying it doubted the “overall reliability of Citigroup’s capital planning process”.

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Recovery-lite

By Ben Walsh
March 26, 2014

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