Pizzaflation is creeping through the nation. Inflation is slow, and subtle, and making our favorite things like Pizza unaffordable. Pizzaflation explains the deterioration of the US Dollar in something we all love; Pizza.
The Fed has created a situation where the housing industry is so dependant on the massive interest rate subsidy that any uptick in rates is likely to cause a cataclysm. The Fed and its cohorts are responsible for this mess. They have left themselves, and us, with no way out.
It is becoming very clear that the Deutsche Bank debacle is getting very serious. How do we know? Simple - everyone is denying everything. Overnight DB CEO Cryan denied any need to raise capital or need a bailout; this morning ECB's Draghi denied low rates were responsible, and denied The IMF's statement the bank is systemically important; and now IMF's Lagarde is denying any need for government intervention.
Last week, the Federal Reserve decided to keep US interest rates unchanged, marking its 96th month of life at the zero bound. Apparently, for all of its "data dependence", the Fed feels the economy could still benefit from *just* a little more of its ZIRP happy juice. But as anyone with a little common sense will tell you,More is not always better. It's quite possible to have too much of a good thing. And in its pursuit to kick the can for a little longer, the Fed has crossed a dangerous line.
When the results for the sale of $28bn in 7 paper printed, the result was a modest tail, with a high yield of 1.389% tailing the 1.385% When Issued. As a reminder, last month's 7Y auction had an even bigger tail but that was due to concerns of a potential rate hike by the Fed in September; this time there was no such concern.
European banks are in a “very fragile situation” and are “not really investable as a sector" according to Credit Suisse chief executive Tidjane Thiam. Speaking at a conference in London this morning, The FT reports, the CEO of Europe's 'other Deutsche Bank' said "only a fool would try to make a five-year prediction in a world that is so random," wishing John Cryan (DB CEO) well, "I hope that they come out of their current predicament."
Yigit Bulut, chief adviser to Turkish President Recep Erdogan, Turkey should consider "using a new wealth fund or a group of state-owned banks to buy" the embattled Deutsche Bank. Bulut made the proposal on Tuesday via his Twitter account, saying Germany’s largest lender should be made into a Turkish bank.
On September 22, Donald Trump reaffirmed his intent to revive the American coal industry - without many details on how to do it. What influences the price and demand for coal? Can Donald Trump influence the forces behind these market drivers?
Despite its peg, Spot Riyal is trading at its weakest in 8 months as turmoil mounts in The Kingdom as a failed 'deal' in Algiers, pay cuts for royalty, and now growing concerns that the US vote/veto on 9/11 Legislation will delay Saudi Arabia's first international bond sale. Forward bets on Saudi currency devaluation are surging and default risk is on the rise again as Bloomberg reports, a Senate vote to override President Barack Obama’s veto could cause some investors to balk at the issue.
Following the surprising across-the-board inventory draws report by API overnight, DOE confirmed crude's overall draw (-1.88mm bartrels vs +3mm exp). However, gasoline saw the biggest build in 4 months (as distillates saw the biggest draw in almost 2 months). Crude production dropped very modestly on the week but remains stuck around 8.5mm barrels. Oil prices popped then dropped and remain lower for now...
As the credibility of the FBI continues to dwindle away over it's handling of the Hillary email investigation, FBI Director James Comey is back on the Hill today to explain why he was "handing out immunity agreements like candy."
This morning, Janet Yellen testifies before the House Financial Services Committee on financial regulation topics. While there us unlikely to be much talk of monetary policy, it may come up, although most of the lawmakers’ questions are likely to relate to the Fed’s oversight of banks; other questions may touch on the Fed's recent bank commodity oversight push, the November election, and especially the recent Wells scandal.