What do you think it means when a Federal Reserve Governor (the St Louis Fed Governor – this week) publishes a statement indicating the Fed should begin buying US Treasuries to help stop deflation?   It’s a sign that the Fed sees a weakening economy, that deflation is here, and that they’re out of bullets. In 2009, when the Fed [...]

The carefully choreographed results were announced yesterday. Markets reacted by doing nothing until the ECB held a PR conference. Markets then gained a little less than 1%.
 
The results are that 91 banks across 20 countries were tested. 7 banks failed: 1 in Germany, 1 in Greece, 1 in Slovenia, and 4 in Spain. Failure of the test means [...]

FINREG was signed into law by the President this week.                 
 
I’m sorry to say that FINREG recommends changes to 12b-1 fees that amount to nothing and offer no further protection of investors from this rip-off fee. 12b-1 fees are an ongoing charge by mutual funds to individual investors and are effectively an annuity payment to stock [...]

Probably the most significant financial news was when the German financial system regulators spooked stock, bond, commodity, and forex markets this week. They announced a ban on naked short selling of stocks and bonds of Germany’s 10 largest banks, German sovereign bonds – called Bunds, and credit default swaps on Bunds. 

Short selling is where you borrow a [...]

Abbey Joseph Cohen is a Sr analyst at Goldman Sachs. She is trotted -out from time to time to be head cheerleader and hype things up.  On Thursday, CNBC TV interviewed Abbey. She had the impossible job of trying to convince viewers that despite the fact that she sees the US economy slowing in the 2nd half of the year, she [...]

 
The Economist magazine says “Greece looks bust”. No argument there…
 
Given that we here in the US are essentially the pot calling the kettle black, we need to pay attention because the stakes are very high. How high?: several estimates for eventual losses on bonds from:Portugal, Greece & Spain total $800B. This is more than sufficient [...]

This sounds like the name of a low-budget Hollywood blood & guts / smash-up movie.  Would that it were true. Repo 105 is a reference to an arcane accounting rule that permits banks to misrepresent the state of their health (balance sheet). This subject is beginning to catch some press because we recently learned that [...]

Here are some updated stats on our economic recovery:

The US trade deficit is falling to the 3% of GDP range (from over 6%). This is good news. It means our cheaper dollar is helping exports and making imports more expensive. This in turn reduces our need to borrow from foreigners (other things being equal).
20% of [...]

The US banking and financial system is in need of updating and improving. Ever since our banking system almost brought Armageddon in 2007-2009, we’ve known the system needs a serious overhaul. Reforming the banking system is always a slow and uphill effort because banks are skilled (OK, their army of lobbyists are skilled) at convincing our [...]

Here we go….

March 16 was a deadline for Greece to update the EU finance ministers on their progress to bring down their deficit this year.
March 17th:  the most important person in Europe right now -Angela Merkel  (the German Chancellor – the leader of the German federal government) gave a statement indicating the Eurozone must change [...]