Bank of England

Here's What Happens When A Currency Completely Breaks Down

But regardless of the form, money is only credible as long as everyone agrees that it has value, i.e. there’s a large enough market size of people willing to use it. This fundamentally comes down to trust and confidence. But Venezuela’s example shows how quickly that very thin veneer of trust and confidence can shatter, plunging a country into chaotic hyperinflation.

"Panicked" Citi Trader "Who Fired Off Repeated Sell Orders" Behind Pound Flash Crash

A probe into October’s sterling "flash crash" has focused on the Japanese trading operations of Citigroup, which fired off repeated sell orders that exacerbated the pound’s fall. One of the US bank’s traders "panicked" and placed multiple sell orders when the currency slumped in unusually fragile market conditions.

Trump Vs China: Credit Cycles & Gold

As all experience from the past clearly demonstrates, it is a mistake to believe that the gold price is set solely by dollar interest rates, or its relative strength in other currencies. This being the case, the current weakness of the gold price is simply a reflection of temporary dollar shortages, and nothing more.

Frontrunning: December 1

  • Oil hits six-week high after OPEC deal, sterling jumps (Reuters), Oil Holds Gains After OPEC Deal (WSJ), Hangover Awaits as OPEC Celebrates (BBG)
  • Opec agreement: the winners and the losers (FT)
  • Russia’s Pledge to OPEC Will Mean ‘Herding Cats’ to Deliver Cuts (BBG)
  • Mnuchin Made Millions From Financial Crisis (WSJ); Trump reverses stance by turning to Goldman alumni for key roles (FT)
  • Treasury Pick Says ‘No Absolute Tax Cut’ for Wealthy (WSJ)

RBS Tumbles After Failing BoE's "Toughest Ever Stress Test"

While the term 'stress test' has been applied almost mockingly to European and US banks in an effort to create confidence for investors (because if the government sees risks 'contained' then why worry), this morning's Bank of England stress test results highlighted "capital inadequacies" for three major UK banks. While Barclays and Standard Chartered fell short, it is taxpayer-owned Royal Bank of Scotland that is slumping on a need to cut costs, raise capital, and sell assets.

Frontrunning: November 30

  • Oil soars on OPEC hopes, dollar renews its surge (Reuters)
  • Oil Rallies on OPEC Optimism, Spurring Gains in Energy Producers (BBG)
  • Saudis say to take 'big hit' on oil output for OPEC deal, Iran can freeze (Reuters)
  • Leaner and meaner: U.S. shale greater threat to OPEC after oil price war (Reuters)
  • an the U.S. Become an Energy Superpower in 2017? (BBG)
  • RBS Fails Toughest-Ever BOE Stress Test, Boosts Capital Plan (RBS)