Mainstream News

Swiss bank breaks negative deposit rates taboo

"The Alternative Bank Schweiz (ABS) caused shockwaves with a letter sent to all clients informing them that it would begin imposing interest charges on deposits in 2016. For current accounts, the bank said it would impose a -0.125-percent rate, while slapping a -0.75-percent rate on client deposits higher than 100,000 Swiss francs. ABS, which grew out of the ideals the 1960's protest movement, justified the unprecedented development by saying it would provide manoeuvering room for financing 'meaningful projects'. The Swiss central bank introduced a negative deposit rate in January after it abruptly abandoned its three-year effort to hold down the franc's exchange rate to protect exports." Continue reading →

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Banknote printer De La Rue to cut jobs in shift to electronic payments

"Banknote and passport printer De La Rue is to cut about 300 jobs and halve its number of production lines to four as it battles a global decline in demand for cash. The company, which produces notes for the Bank of England, has set out a restructuring plan that will see almost 10pc of its workforce go as it consolidates its banknote printing operations at three centres. The introduction of plastic notes is causing a revolution in the industry, as printers struggle to deal with he challenges of printing on new materials. The banknote printing industry is facing the challenges of global overcapacity, with many of the printers state-backed." Continue reading →

Continue ReadingBanknote printer De La Rue to cut jobs in shift to electronic payments

The disappearing allure of the safe deposit box [2014]

"The safe deposit box, once a staple of any bank branch, has itself become an antique. Banks are reporting that safe deposit box use is on the decline, with occupancy rates dropping quickly as customers buy home safes, digitize and store documents electronically, and, in this era of conspicuous consumption, prefer to display their valuables rather than stash them away for special occasions. Jerry Pluard, the owner of Safe Deposit Box Insurance Coverage LLC, an Illinois company that insures the contents of the boxes, estimates that nearly half — 45 percent — of safe deposit boxes in the country are empty today." Continue reading →

Continue ReadingThe disappearing allure of the safe deposit box [2014]

Want to play the market? Count the Fed leak weeks

"U.S. central bankers not only regularly leak secret information about monetary policy, but the leaks are so predictably timed that a savvy investor without access to the leaked information could make money just by buying stocks in certain weeks. The weeks that have excess stock-market returns are generally the same in which there are closed Fed Board meetings, and increased volatility in short-term interest-rate futures contracts suggests that it is information on monetary policy from those meetings that is driving the pattern." Continue reading →

Continue ReadingWant to play the market? Count the Fed leak weeks

Democrats Work To Block Regulations, After Flood Of Campaign Cash

"The Obama administration’s efforts to rein in Wall Street face opposition from members of the president’s own party. Since 2011, after Dodd-Frank became law, Democrats have raised over $330 million from the financial industry, and their party’s presumptive incoming Senate leader, New York's Chuck Schumer, is considered a close ally of the financial sector. As the year-end legislative wrangling intensifies, here are the other Democrats who have been Wall Street’s key allies in fighting the Obama administration. They have all raised big money from the financial industry." Continue reading →

Continue ReadingDemocrats Work To Block Regulations, After Flood Of Campaign Cash

China Devaluation Is Blow to Cash-Strapped Argentina’s Reserves

"China’s devaluation couldn’t come at a worse time for Argentina. About a quarter of the country’s $33.7 billion of foreign reserves are now denominated in yuan, which suffered its biggest loss since 1994 on Tuesday. The move is eroding the cash Argentina uses to pay its debt and comes as the nation is effectively shut out of overseas bond markets and struggling to defend its slumping peso at home. The country’s yuan holdings have ballooned since it signed an $11 billion currency-swap agreement with the People’s Bank of China in July. In the unregulated market Argentines use to sidestep the government’s currency controls, the peso has sunk 12 percent in the past two months." Continue reading →

Continue ReadingChina Devaluation Is Blow to Cash-Strapped Argentina’s Reserves

China currency devaluation hits stocks; dollar gains on currency war fears

"China's 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth. U.S. stock indices dropped more than 1 percent and stocks also fell in Asia and Europe as investors contemplated the implications of a move designed to support China's slowing economy and exports. Companies that sell to China were hit hard, with heavy equipment maker Caterpillar losing 3.13 percent and Germany's Volkswagen dropping 4 percent. Energy and materials shares also tumbled on China demand concerns." Continue reading →

Continue ReadingChina currency devaluation hits stocks; dollar gains on currency war fears

Former Fed chief Alan Greenspan warns of bond market bubble

"Alan Greenspan, who served as Fed chairman between 1987 and 2006, told Bloomberg: 'I think we have a pending bond market bubble. If we merely substitute the structure of equity prices, and we have the price of bonds, and instead of expected equity return we have expected interest rate return, that price earnings ratio is in an extraordinary unstable position.' Mr Greenspan, who has been criticised for fuelling the US housing bubble by keeping rates down in the early 2000s and failing to keep a closer eye on banks, said behavioural economics was playing a central role in investor decision making. Mr Greenspan also said oil prices had further to fall." Continue reading →

Continue ReadingFormer Fed chief Alan Greenspan warns of bond market bubble

Should Puerto Rico Shut Down Schools to Pay Its Debts?

"The hedge fund report, authored by a trio of former International Monetary Fund economists, noted that Puerto Rico’s education spending had risen 39 percent in a decade during which school enrollment actually fell by a quarter. Surely, there must have been some unnecessary fat in the system to cut. It's easy to understand why this might seem outrageous. Firing teachers in the middle of what's essentially a nine-year depression seems like a good way to further exacerbate Puerto Rican unemployment, possibly while sacrificing some childrens' educations." Continue reading →

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Australian inquiry says digital currencies are real money

"An Australian government inquiry will recommend treating digital currencies as money, simplifying tax for people who trade with them while forcing bitcoin exchanges to monitor customers for potential money laundering and terrorism financing activities. The Senate committee recommendations underscore governments' growing acceptance of the role of so-called 'cryptocurrencies' around the world. If implemented, the changes would align Australia with the United Kingdom and Spain by having people pay sales tax just once if they buy something with bitcoin, while leaving other nations like Sweden to fret over its true legal status. The changes would also match Australia with Canada and Singapore." Continue reading →

Continue ReadingAustralian inquiry says digital currencies are real money