Consumer protection

Frontrunning: June 19

  • China cash crunch deepens as PBOC withholds funding (FT), just a week behind ZH
  • Platts in hot manipulated crude again: Traders Try to Game Platts Oil-Price Benchmarks (WSJ)
  • Kabul Suspends Security Talks With U.S., jeopardizing plans to maintain a U.S. military presence (WSJ)
  • Afghan government irked over U.S. talks with Taliban (Reuters)
  • BOJ Kuroda: BOJ to Adjust Policy If Japan Econ Changes (MNI)
  • Google Considering Private-Equity Alliances (BBG)
  • Korean Air Buying 747-8s to End Boeing’s Sales Drought (BBG)
  • Syria's Islamists seize control as moderates dither (Reuters)
  • SEC considers policy shift on admissions of wrongdoing (FT)
  • U.K. Banker Bonuses Face Decade Delays in Industry Overhaul (BBG)

Ben Bernanke Speaks - Live Webcast

The Chairman is about to take the lectern to discuss bank structure and competition at the SIFI conference at the Chicago Fed. His prepared remarks are likely to be a little less exciting than the Q&A where the world will be watching for the words "buy, buy, buy", "mission accomplished", or "taper". Charles Evans will be his lead out man. Finally, since Bernanke will be discussing shadow banking, or the source of some $30 trillion in shadow money always ignored by Keynesians, Monetarists and Magic Money Tree (MMT) growers, a topic we have discussed over the past three years, here is the TBAC's own summary on how Modern Money really works.

Niall Ferguson – The Great Degeneration

While Harvard historian Niall Ferguson's off-the-cuff remarks during the Q&A were in his words "as stupid as they were insensitive", the core message of his presentation was clear: the party of the last 20 years is now over and the longer we fail to address the real issues the bigger the hangover will be in the future. The central question Ferguson asks is whether our institutions, corporations and governments, are degenerating. As Lance Roberts of Street Talk Live notes Ferguson believes that without addressing the structural problems that plague the economy from production to employment – stimulus will fail. The reality is that the 'punch bowl' won't fix employment growth, economic growth or the rule of law.

Frontrunning: April 17

  • Boston bomb probe looking at pressure cooker, backpacks (Reuters), Boston Bomb Clues Surface (WSJ) Forensic Investigators Discover Clues to Boston Bombing (BBG)
  • China local authority debt ‘out of control’ (FT)
  • Gold Wipes $560 Billion From Central Banks as Equities Rally (BBG)... or the same impact a 2% rise in rates would have on the Fed's balance sheet
  • More Wall Street leakage: Stock Surge Linked to Lobbyist (WSJ)
  • China's bird flu death toll rises to 16, government warns of spread (Reuters)
  • Chinese official endorses monetary easing (FT)
  • As global price slumps, "Abenomics" risks drive Japan gold bugs (Reuters)
  • North Korea rejects US call for talks (FT)
  • IMF Renews Push Against Austerity (WSJ)
  • India Gains as Gold Plunge Boosts Scope for Rate Cuts (BBG)
  • Germany set to approve Cyprus aid (FT)
  • Easing Is an Issue as G-20 Meets (WSJ)

Surprise! All Banks Pass Stress Test (Except Ally)

In a stunning headline-making moment of clarity, it appears that all the major financials that the Fed monitors (except GMAC Ally) will survive a cataclysmic, Lehman-like moment based on their self-determined analytics of their deeply illiquid off-balance-sheet assets (and a comprehensive understanding of the co-dependence of all those assets). As Bloomberg notes,


Is it any wonder that Government Motors wanted to IPO its GMAC/Ally business recently - with a 1.5% stressed Tier 1 ratio.

Icahn Thanks Ackman For "Very Big Mistakes"

As if today's collapse in JCP's stock price, Bill Ackman had his nose bloodied both figuratively and numerically when his now arch-nemesis appeared on Bloomberg TV to explain his gaining two seats on the board and option to purchase 25% of Herbalife. While obviously not full of the to-and-fro fireworks of their recent encounter, Icahn had quite a few jabs at Ackman record lately, "he has made a few very big mistakes," and thanked him for his big mistake in "giving us an opportunity to buy a company at a discounted price." The interview was full of Icahn's normal bluster but he once again brought up the fact that this whole 300-page dog-and-pony show was undertaken right before year-end, "I do not understand why someone... talks about the fact that he is short," for obvious reasons, "except to say that it certainly helped his year-end numbers."

InBev Sued For Overstating Budweiser Alcohol Content

Maker's Mark recent foray into "diluting" reality by keeping prices flat while reducing the alcohol content - a painful reminder that stealth inflation comes in the most unexpected of shapes - came and went, with the outcry limited to a select group of Bourbon lovers. However, when the realization hits that every other alcohol producer may have been engaging in the same less than ethical behavior, including America's precious Budweiser, we expect the response to be faster and furiouser. We also expect the answer to the question of how it is that food inflation is not far greater, will be made even clearer. It will, however, certainly bring new meaning to the phrase the beer glass is half full. Of course, since the lawsuit was filed by two men who "routinely purchased as many as four cases of Bud per month for the past four years" one can see why it may not be taken very seriously.

A Primer On Europe's Common Bank Supervisor

The Eurozone was once again engaged in burning the midnight oil, in yet another futile endeavor, this time setting the stage for a common bank supervisor in the face of the ECB, which is somehow supposed to "regulate" Europe's thousands of banks. That this was a total practical dud can be seen in the response of the EURUSD to the news. However, for those interested in the theoretical nuances, whose actual implementation has once again been kicked into the future, here is a quick and dirty primer from SocGen.

Frontrunning: November 19

  • Israel Ready to Invade Gaza If Cease-Fire Efforts Fail (Bloomberg)
  • Petraeus: A Phony Hero for a Phony War (NYT)
  • IMF'S Lagarde says Greek deal should be "rooted in reality" (Reuters) "rooted" or "roofied"? And where was it until now?
  • ECB's Asmussen says Greece to need aid beyond 2014 (AP)
  • EU makes budget plans without (FT)
  • Japanese Poll Shows LDP Advantage Ahead of Election (WSJ)
  • Shanghai Composite Dips Below, Regains 2,000 Level (Bloomberg)
  • Bond investor takes big punt on Ireland (FT)
  • Noda defends BoJ’s independence (FT) Indewhatnow?
  • Inaba Says BOJ Could Ease More If Government Reins in Debt (Bloomberg) Actually it's the other way around
  • Miles Says Bank of England Can Do More If U.K. Slump Persists (Bloomberg) So much for the end of QE
  • US tax breaks worth $150bn face axe (FT)