Investment/Trends

Junk-Rated Borrowers Reap Rewards in a World of Negative Yields

"For investors with $12 trillion of negative-rate bonds worldwide, U.S. junk securities and their 6.9 percent average yield look like a gold mine. But with so many investors streaming into the market, the debt is now yielding almost 3 percentage points less than the average of the past two decades, Bank of America Merrill Lynch index data show. And they’re buying it up at the same time that junk-rated borrowers default at the fastest pace in six years." Continue reading →

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Bernanke Advises “Perpetual Bonds” To Japanese Government

"In April the former Federal Reserve chief warned there was a risk Japan at any time could return to deflation. He noted that helicopter money -- in which the government issues non-marketable perpetual bonds with no maturity date and the Bank of Japan directly buys them -- could work as the strongest tool to overcome deflation, according to Honda. Bernanke noted it was an option, he said. Bernanke joined central bank chief Haruhiko Kuroda over lunch this Monday and on Tuesday he attended a gathering with Abe and key officials, including Koichi Hamada, another influential economic adviser. The central bank didn’t reveal what Kuroda and Bernanke discussed." Continue reading →

Continue ReadingBernanke Advises “Perpetual Bonds” To Japanese Government

Ban $100 bills to tackle crime: Ex-bank chief

"He argued that high-denomination notes in high-value currencies were little used other than for crime, with people in most parts of the world favoring cash for small payments and electronic alternatives like credit cards or Paypal for bigger ones. As such, Sands called for the elimination of the 500 euro note, £50 bill and 1,000 Swiss franc bill and the $100 note. Depending on the country, tax evasion robs the public sector of anywhere between 6 percent and 70 percent of what authorities reckon they should collect, Sands added. He said that global financial crime flows amounted to $2 trillion per year, with corruption accounting for another $1 trillion." Continue reading →

Continue ReadingBan $100 bills to tackle crime: Ex-bank chief

No Negative Rates Without Banning Cash, Says Former Fed Official

"I think it’s going to be hard to push the Fed Funds rate below negative 1. That’s going to be difficult. People can basically take out cash and put it in a vault and they get a zero return on it. This is supporting the ban on cash rhetoric. This is a huge social debate that we should start having. One way of doing it is to ban cash. Banning cash is a social and political debate, which is going to happen increasingly. As long as we have cash, we can’t have rates of much below negative 1 percent." Continue reading →

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Bitcoin Exchange Loses $60M In Hack; US Regulations ‘Prevented Cold Storage Use’

"Bitfinex was previously fined $75,000 by the CFTC for failing to register as an appropriate entity for the services it offered as well as: '[F]or offering illegal off-exchange financed retail commodity transactions in bitcoin and other cryptocurrencies.' These 'off-exchange' transactions could be alluding to the storage of funds offline — commonly known as cold storage — one of the best ways to keep your funds out of hackers’ reach. If this is indeed the case then the incident could undermine calls for more regulation as cryptocurrency exchanges face a dilemma between security and compliance." Continue reading →

Continue ReadingBitcoin Exchange Loses $60M In Hack; US Regulations ‘Prevented Cold Storage Use’

Highway bill revives the Export-Import Bank after only five months

"A measure extending the bank through 2019 was included in a massive transportation bill that cleared the House and Senate Thursday and is expected to be signed by President Barack Obama. The small federal agency makes and guarantees loans to help foreign customers buy U.S. exports. Business groups like the U.S. Chamber of Commerce say it's necessary for U.S. competitiveness, since most overseas competitors rely on similar government help. But conservatives decry the bank as corporate welfare and government interference in the free market. A rarely used procedure in the House forced a floor vote on the bank over the objections of top GOP leaders." Continue reading →

Continue ReadingHighway bill revives the Export-Import Bank after only five months

Norway’s Biggest Bank Demands Cash Ban

rivacy advocates in Norway have expressed worries for years that, without cash, there would be no way for an individual to purchase something without being tracked. In 2014, Finans Norge, a financial industry organization in Norway, said the country was on pace to be a cashless society by 2020, Ice News reported. While DNB said its proposal will take time to complete, executives suggested the country start phasing out cash by discontinuing the 1,000 kroner note so it could focus on updating its banking system. Continue reading →

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Gold Is Back in Fashion After a $15 Trillion Global Selloff

"The $15 trillion rout in global equity markets since May is reawakening the lure of gold for investors seeking safety. Hedge funds more than doubled their net-long position in bullion last week, just three weeks after they were the most-bearish ever. Investor holdings of gold through exchange-traded products are expanding at the fastest pace in a year, and the value of the ETPs has jumped by $3 billion in 2016. Fed Bank of Boston President Eric Rosengren said this month that the central bank’s projected path for more policy tightening is at risk, citing falling estimates for U.S. economic growth. Gold reached a five-year low in December as the dollar strengthened and U.S. inflation stayed stagnant." Continue reading →

Continue ReadingGold Is Back in Fashion After a $15 Trillion Global Selloff

Audit the Fed Legislation Sinks: Plan Accordingly

"Rand Paul and Ron Paul, the dynamic duo of anti-Fed forces, invested a lot of time and money trying to get that legislation passed. But even if it reached Barack Obama's desk, it would have been vetoed. Of course, the Fed pushed back against the legislation. Fed Chairman Janet Yellen penned a letter to senators before the vote claiming that the legislation would deprive the Fed of necessary independence. She also noted that passing the legislation might generate an inflation scare and cause interest rates to rise. One wonders if this was a subdued threat." Continue reading →

Continue ReadingAudit the Fed Legislation Sinks: Plan Accordingly

Iran to be hooked up to global banks in weeks; U.S. investors still banned

"A nuclear deal between world powers and Iran led to the removal of the curbs on Tehran's banking, insurance and shipping sectors last weekend, as well as restrictions on oil exports. But for Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system is used to transmit payments and letters of credit. Many international sanctions relating to Iran's nuclear program were lifted but most involving U.S. measures remain in place. Non-U.S. banks may trade with Iran without fear of punishment in the United States but U.S. banks may not do so, directly or indirectly." Continue reading →

Continue ReadingIran to be hooked up to global banks in weeks; U.S. investors still banned