Bank of New York
The Federal Reserve Bank of New York (FRBNY) has built a new crystal ball (technically a DSGE model) as part of its efforts to forecast the U.S. economy. In part 1 of a week-long series - to provide some background on the model, its use for policy analysis and forecasting, as well as its forecasting performance - they briefly discuss what DSGE models are and explain their usefulness as a forecasting tool.
It all started in Stafford, Virginia in 1782, when Thomas Jefferson documented the first gold discovery himself. Since then, Americans have been searching for gold far and wide. The California Gold Rush brought hundreds of thousands of people to the West in search of new found wealth. Years later, many more ventured into Alaska’s wilderness to hit it rich. Even today, there is a modern gold rush in Nevada, where the five biggest gold mines (by contained oz) are located. While it is true that there have been some hiccups along the way, such as Roosevelt’s confiscation of gold in 1933, it is unlikely that America’s fixation on gold will end any time soon.
HIGHLIGHTS > Gold reserves destination unknown after moved from Ottawa vault as part of Bank of Canada HQ renovation > Switzerland, the Netherlands and Sweden say they hold gold in Ottawa > Upcoming Swiss vote on gold repatriation could lead to gold repatriation from Bank of Canada > Bank of Canada only acts as gold custodian to four foreign central banks > Bank of Canada no longer a major gold custodian; Canada has virtually no gold reserves
- That will teach the UAE who's boss: U.S. Won’t Consult Syria on Militant Strikes: White House (BBG)
- Putin Set to Meet Poroshenko as Ukraine Tensions Escalate (BBG)... but the de-escalation algo?
- Tim Hortons’ Canadian Fans Squeamish of American Hookup (BBG)
- Israeli air strikes target more Gaza high-rises (Reuters)
- How Steve Ballmer Became a Rookie Basketball Mogul (WSJ)
- Buffett to Help Finance Burger King Tax-Saving Deal (BBG)
- U.S. Factories Keep Losing Ground to Global Rivals (WSJ)
- Boehner, Camp Profit From Corporate Bid to Avoid U.S. Tax (BBG)
- Experimental U.S. hypersonic weapon destroyed seconds after launch (Reuters)
- The Neo-Neocons (WSJ)
When a tin-foil-hat-wearing blog full of digital dickweeds suggest the dollar's reserve currency status is at best diminishing, it is fobbed off as yet another conspiracy theory (yet to be proved conspiracy fact) too horrible to imagine for the status quo huggers. But when the VP of Research at the New York Fed asks "Could the dollar lose its status as the key international currency for international trade and international financial transactions," and further is unable to say why not, it is perhaps worth considering the principal contributing factors she warns of.
With the impasse over the latest Argentina default going nowhere fast, late last night president Kirchner stunned its creditors when she announced what amounts to a cramdown plan for holdouts, in which all bonds would be stripped of their existing indentures and converted to local law bonds. Or, as some would call it, a "scorched earth" transaction that burns all bridges, and goodwill, with the international creditor community and likely leaves Argentina unable to access global capital markets for the foreseeable future.
- Here come the gates which we predicted in 2010: SEC Is Set to Approve Money-Fund Rules (WSJ)
- Dick's cuts 400 jobs as golf now less popular (MW)
- Kerry arrives in Israel, pushes for peace (Reuters)
- Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
- Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
- Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
- Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
- Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
- Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
Despite yesterday's lackluster earnings the most recent market levitation on low volume was largely due to what some considered a moderation in geopolitical tensions after Europe once again showed it is completely incapable of stopping Putin from dominating Europe with his energy trump card, and is so conflicted it is even unable to impose sanctions (despite the US prodding first France with BNP and now Germany with the latest DB revelations to get their act together), as well as it being, well, Tuesday, today's moderate run-up in equity futures can likely be best attributed to momentum algos, which are also rushing to recalibrate and follow the overnight surge in the AUDJPY while ignoring any drifting USDJPY signals.
Well, if you take the US Supreme Court and representatives of the Federal Reserve System at their own words, the case is pretty clear: the member banks of the Federal Reserve System are private corporations / banks.
Several months after it was revealed that Germany was able to only recover a miserable 5 tons of its gold in all of 2013 (under 10% of the 84 tons it was scheduled to repatriate), Germany appears to have given up entirely in its attempt to recover gold which simply is not there, and as Michael Krieger reports, citing Bloomberg, has decided to keep "it" (by "it" we don't mean the gold since that clearly has not been at the Fed for decades, but merely the paper promises of ownership: for more see China's gold rehypothecation scandal and how the unwind works) at the NY Fed after all. That is to say, in the "safe hands" of former Goldmanite Bill Dudley.
The NY Fed has been kind enough to just release a pic of the NY Fed's "Open Market Operations" team - i.e., its last line of defense tasked with preserving the American way of life - as it was first seen in the heat of World War II, some time in 1944. Because when one thinks of the veterans, one must not forget the men and women who quietly held it all together by BTFD.
- Canada Aims to Sell Its Oil Beyond U.S (WSJ)
- ECB Unanimity May Prove Fleeting (WSJ)
- Chinese military spending exceeds $145 billion, drones advanced: U.S. (Reuters)
- France to sell 10 warships to Russia next? BNP Executive Firings Sought by Top New York Bank Regulator Amid Probe (BBG)
- Vodafone says governments have direct access to eavesdrop in some countries (Reuters)
- Home Price Gains of 20% Vanish as Hottest Markets Cool (BBG)
- G-7 Heads Warn Moscow Before Facing Putin (WSJ)
- Barclays Fine Spurs U.K. Scrutiny of Derivatives Conflict (BBG)
- "Or Costs" - Obama Says Putin Running Out of Time Over Ukraine (BBG)
- Banca Monte Paschi Falls After Offering New Stock at 35.5% Discount (BBG)
Long before Virtu was forced to pull its IPO due to the backlash against HFT frontrunners in party due to being stupid enough to post its perfect trading record of 1 trading day loss in 5 years which could only be the result of a grossly rigged market, we pointed out that another entity, one having little in common with your garden variety HFT parasite, namely JPMorgan, had a 2013 trading record which could be summed up on one word only: perfection. Yet while one could simply attribute the same kind of market rigging to JPM as one can (and should) to the average hi-freak, it seems there may be more here than meets the eye so used to seeing manipulation everywhere it looks. According to Australia's Sydney Morning Herald, "a technical support person who worked for JP Morgan in Australia claims the bank regularly misled its New York parent and the US Federal Reserve by failing to report losing trades."
In a well-crafted 688 words published just 5 minutes after the minutes were exposed to the public, the Wall Street Journal's Jon Hilsenrath provides what bullish equity market believers might consider one of his more hawkish commentaries on what the Fed is really thinking. "Federal Reserve officials turned their attention to longer-run issues at their April policy meeting," he noted; adding that discussion of the Fed's "exit strategy" from low interest rates has heated up in recent weeks. His summation - lots of talk, no action... not what the bad-news-is-good-news crowd wants to hear.
The bells are ringing for the markets, but few are noticing.