Talk about deleveraging. By far the most striking number in Barclays’ first-half profits concerns its balance sheet:
The prospect of California issuing IOUs raises the intriguing prospect of a new, freely tradeable currency in the middle of the world’s principal single currency block. Clearly, the Cali will trade at a discount to the greenback, but how big should it be? Should there be a new Californian Monetary Authority to control the paper the state issues? And will the IOUs carry redemption dates where they can be converted into the real thing? This could be the start of something big…
With the big event for the week – the outcome of the Federal Reserve’s Federal Open Market Committee – not due until Wednesday, global markets are left to focus on number of cross currents that are weighing on the stocks and oil and bolstering government bonds and the dollar.