Last August, when a paramilitary group almost became the first default among local government financing vehicles, few would have thought that another asset frenzy was afoot in China. Yet off-budget local government debt is having a fun ride. After that scare, yields for AA rated, three-year bonds issued by local government financing vehicles compressed to 3.9 percent from about 5 ...
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UK inequality is running deeper than you think
From left to right, British politicians have taken one particular issue to heart. “When it comes to opportunity we won’t entrench the advantages of the fortunate few, we will do everything we can to help anybody,†said Theresa May in her maiden speech as prime minister in July 2016. Since becoming Labour leader, Jeremy Corbyn has lambasted “grotesque†disparities that ...
Read More »India, China fall into ‘monetary’ leadership
India and China are leading the world. Kind of. In the dovish tilt that’s defined interest rates lately, only two noteworthy central banks have actually loosened monetary policy: the People’s Bank of China (PBOC) and the Reserve Bank of India (RBI). Both have indicated there’s more to come. When people talk about Asia’s two giants moving out front, they tend ...
Read More »Central bankers confronted with climate threats
Towards the end of Federal Reserve Chairman Jerome Powell’s testimony before Congress this week, US Senator Brian Schatz asked him, “Do you agree that climate change creates financial risks for the individual financial institutions and for our financial system as a whole?†His answer reveals the challenge in finding a long-term, universal answer to business as usual. It also raises ...
Read More »US stocks edge lower as dollar rallies for fifth day
Bloomberg US stocks edged lower as investors struggled to find inspiration after a torrid start to the year. The dollar rallied for a fifth day. The S&P 500 Index fell 0.1 percent. Equities opened lower amid a lack of progress on the US-China trade deal before briefly erasing losses on home-sales and service-industries data that beat estimates. General Electric Co. ...
Read More »A $1trillion rally’s reward is billions of ETF outflows
Bloomberg European stocks may be off to a roaring start this year, but exchange-traded funds (ETFs) tracking them aren’t immune to the outflows that hit US equity funds earlier in the quarter. Despite an 11 percent surge for the Stoxx Europe 600 Index, ETFs targeting region’s shares have bled more than $4 billion in 2019. Among the biggest losers: benchmark ...
Read More »Swiss banks an Italian target after record UBS French fine
Bloomberg Italian financial police are demanding Swiss lenders disclose the names of bankers working in Italy, setting up a potential clash with regulators after UBS Group AG was hit with a record fine by French authorities. The Guardia di Finanza has sent a letter to Swiss lenders asking for a list of all their Italian units, data on local relationship ...
Read More »Indian banks risk adding $25bn bad debt on court move
Bloomberg A year after India’s central bank tightened the screws on companies delaying debt payments, the nation’s Supreme Court is poised to begin hearing arguments on whether the regulator’s diktat applies across industries. Hanging in the balance is the fate of more than $25 billion of loans to power producers. They are among parties contesting the central bank directive that ...
Read More »Mizuho Group’s surprise $6.1 billion charge shows risks of yield quest
Bloomberg Japanese banks’ quest for yield is creating more turbulence, with Mizuho Financial Group Inc. announcing another round of losses on its foreign-bond holdings as part of a surprise writedown that will severely curtail full-year profit. Mizuho slashed its net income forecast by 86 percent on Wednesday after booking 680 billion yen ($6.1 billion) of charges tied to business restructuring ...
Read More »Deutsche Bank equities unit records huge loss
Bloomberg Deutsche Bank AG estimates that its equities trading unit lost about $750 million last year, according to people with knowledge of the matter. The US equities unit hasn’t turned a profit for many years, the people said. The bank at one point considered closing its entire equities operation, the people said, asking not to be identified discussing the matter. ...
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