FED OFFICIAL: TAX SYSTEM ENCOURAGES DEBT June 27, 2011 THE US tax code is guilty of incentivising excessive mortgage borrowing for individuals and debt leverage at corporations, senior Federal Reserve official Narayana Kocherlakota said yesterday. The sudden drop in US land prices may not have set off the recent financial crisis had households and business not been weighed down with so much debt, he [...]
Fields of gold: How to harvest profits from market intervention June 27, 2011 GOLD has been in the headlines since the start of the year. With the Federal Reserve’s second round of quantitative easing (QE2) in place, gold has acted as the de-facto haven currency. Though attention has been on the seemingly inexorable rise of the yellow metal, commodities have been influenced or even manipulated by the authorities, [...]
Bank stocks pressured by new capital requirements June 26, 2011 BANKING stocks could be under pressure this morning, following news over the weekend from Basel that additional capital requirements of up to 2.5 per cent were agreed to be imposed on those financial institutions deemed too big too fail – or, to use the technical term, Global Systemically Important Banks (GSIBs). GFT quotes two-way prices [...]
Why interest rates won’t be going up June 22, 2011 IF you owe a lot of money to your bank, it’s time to rejoice. There is now almost no chance of interest rates going up this year. The Bank of England’s monetary policy committee voted 7-2 to keep rates on hold; and given the arguments and worries about growth expressed by the majority of the [...]
US growth revised down June 22, 2011 AMERICA’S economy will grow by 2.7 per cent this year, the Federal Reserve announced last night, revising down its previous forecast of 2.9 per cent. Yet despite admitting to a confusingly gloomy economic outlook, chairman Ben Bernanke yet again refused to suggest that the Fed would embark on a controversial third programme of quantitative easing [...]
Banks drop but FTSE treads water ahead of Fed decision June 22, 2011 BRITAIN’S top share index closed marginally lower yesterday, as weakness in banks offset gains in defensive stocks with investors jostling positions ahead of a US interest rate decision. London’s blue chip index bobbed around but closed down 2.32 points at 5,772.99, as cautious investors awaited the Federal Reserve’s assessment of the economy and any plans [...]
Shares dip on lack of QE3 suggestion June 22, 2011 US stocks dropped yesterday after the Federal Reserve acknowledged the sluggish pace of the US economic recovery without hinting at further plans for stimulus. The Fed said the recovery was proceeding more slowly than it had expected. In his news conference, Fed chairman Ben Bernanke offered nothing to motivate investors to buy equities. Without new [...]
Looking into the Fed’s crystal ball June 21, 2011 CHARLES SCHWAB LIZ ANN SONDERS We believe monetary policy is largely on hold for the near to medium-term. It’s unlikely the Fed will begin to let its balance sheet shrink; as such, “QE 2.5” – reinvesting proceeds from maturing Treasuries to maintain the level of its balance sheet – would be considered a go once [...]
OIL PULLBACK BRIGHTENS A GLOOMY VISTA June 20, 2011 THE equity market sell-off which began in May has seen most major global stock indices break below significant technical support levels. The S&P 500 and Russell 2,000 are now both trading near their 200-day moving averages (MA). For the S&P, this comes in at 1,260, with a break below here suggesting a test of 1,246 [...]
THE TIPSTER June 20, 2011 IMAGINATION Technologies reports its earnings on Wednesday, but it has got off to a bad start this week, plunging some 8 per cent after analysts had it downgraded. The shares have fallen through the 100-day moving average and support, to around 450p. This might not be the end of the bad news,. Some suspect it [...]