World’s not falling apart for everyone, not yet anyhow. Caterpillar reports best quarter in its history as Q2 earnings beat forecasts
End of reserve accumulation? Letting likes of yuan, rouble etc float to halt bleeding of reserves in 0% western debt? http://t.co/XTFLH1DF
Final straw for decade-long FX reserve accumulation
LONDON (Reuters) – July 2012 may well prove a watershed in the decade-long policy of hard-currency reserve accumulation by China and other developing countries that has helped transform the global economy and world investment since the turn of the millennium.
Vanishing returns on scarce “safe” sovereign debt – where U.S. Treasury bill rates are the lowest since the 1800s and many European bills and bonds are selling with negative rates – and Monday’s threat to Germany’s top-notch credit rating could be the final straw for central banks managing $10.4 trillion (6.7 trillion pounds) of these national savings and emergency hard cash buffers.
Analysis: Final straw for decade-long FX reserve accumulation
LONDON (Reuters) – July 2012 may well prove a watershed in the decade-long policy of hard-currency reserve accumulation by China and other developing countries that has helped transform the global economy and world investment since the turn of the millennium.
Vanishing returns on scarce “safe” sovereign debt – where U.S. Treasury bill rates are the lowest since the 1800s and many European bills and bonds are selling with negative rates – and Monday’s threat to Germany’s top-notch credit rating could be the final straw for central banks managing $10.4 trillion of these national savings and emergency hard cash buffers.
QE, negative yields and the paradox of thrift
LONDON (Reuters) – The investment world is tying itself up in a string of paradoxes spun by pervasive economic and financial fear and its resultant central bank bond-buying and money-printing.
The spread of negative yields on debt from government borrowers perceived as the safest may well be forcing lenders and investors to tip-toe into longer-term securities and less credit-worthy debtors just to try and recoup the face value of loans despite the higher risks assumed.
Analysis: QE, negative yields and the paradox of thrift
LONDON (Reuters) – The investment world is tying itself up in a string of paradoxes spun by pervasive economic and financial fear and its resultant central bank bond-buying and money-printing.
The spread of negative yields on debt from government borrowers perceived as the safest may well be forcing lenders and investors to tip-toe into longer-term securities and less credit-worthy debtors just to try and recoup the face value of loans despite the higher risks assumed.
Aversion to negative bill yields among cenbank reserve managers/SWFs expanding the “core”? “Macro Man: Hamlet Act III” http://t.co/PBo41PQZ
@iron_emu Fed and also ECB LTRO (which kinda QE-lite) doesn’t include BoE…tho scale of that not enough to affect world indices in same way
While waiting for Ben, a reminder of market reactions to various bouts of QE. Diminishing returns? http://t.co/HGSOb6pl
What would a benign dictator do with the euro?
The idea of a “benign dictator” may well be an oxymoron but as a thought exercise it goes a way to explaining why giant global fund manager Blackrock thinks the chances of a euro zone collapse remains less than 20 percent. When push comes to shove, in other words, Europe can sort this mess out. Speaking at an event showcasing the latest investment outlook from Blackrock Investment Institute, the strategy hub of the investment firm with a staggering $3.7 trillion of assets under management, Richard Urwin said the problem in trying to second-guess the outcome of the euro crisis was the extent to which domestic political priorities were working against a resolution of the three-year old crisis.
“The thing is if you could imagine a benign dictator, then the problems are all solvable and could be fixed in a matter of weeks,” said Urwin, who is Head of Investments at Blackrock’s Fiduciary Mandate Investment Team. Playing with the idea, Urwin said parts of a workable plan may involve debt rescheduling or restructuring for the existing bailout countries Greece, Portugal and Ireland; a buildup of a sufficiently large liquidity fund to help the larger countries such as Spain and Italy; a euro banking union with deposit guarantees and single supervisor to ring-fence and close insolvent banks that will never function properly; the creation of a central finance ministry and the issuance of jointly-guaranteed euro bonds etc etc.
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