Tuesday, December 12, 2023

FED'S HIGHER FOR LONGER STRATEGY. TO THE HIGHER FOR LONG ENOUGH

 Washington, DC

CNN — 

Investors are feeling bullish that the Federal Reserve will begin to cut interest rates in the first half of next year, despite Fed Chair Jerome Powell and other officials saying they’re not considering rate cuts just yet. Still, some think rate cuts could come as early as the first quarter.

"There is growing confidence that rate cuts are only a few months away, with a roughly 44% chance of that first cut coming in March, according to futures."

"But if the predictions of a March cut bear out, or even a rate cut in May, so much for the Fed’s higher-for-longer strategy.

Now we’re moving into higher-for-long-enough,” Diane Swonk, chief economist at KPMG, told CNN in an interview.

Whenever the Fed begins to pare back its key interest rate, the pace will likely be gradual in the beginning, and it’s clear there won’t be a return to ultralow interest rates."

Source: 

https://edition.cnn.com/2023/12/10/economy/stocks-week-ahead-fed-higher-for-longer-crumbling/index.html


Friday, October 13, 2023

LONG TERM INTEREST RATE RISE WHEN UNCERTAINTY ABOUT FUTURE RISES.

 "But there’s not a shred of evidence that long-term interest rates rise and fall with the size of the budget deficit or the nation’s debt. No current economic data point to budget deficits as the cause of the higher long-term rates we’re now seeing."

"And the biggest uncertainty right now is not found in economic data. The biggest uncertainty is politicalnot just about what will happen in global hotspots like Ukraine and now Israel, but more directly, about whether America is still capable of governing itself.
This uncertainty has been caused by those same Republican extremists who didn’t want to raise the debt ceiling, and then refused to fund the federal government, and have abdicated political leadership of the House for the first time in the history of the nation."

"And behind these two problems are tens of millions of Americans who have drunk Trump’s Kool-Aid and believe the 2020 election was stolen from him, that Democrats are now persecuting him, and that he should be back in charge, even at the cost of American democracy."

SOURCE:
https://www.alternet.org/the-rubbish-youre-hearing-about-long-term-interest-rates/

Thursday, October 5, 2023

US. STOCK MARKET DOWN BECAUSE OF INFLATION DRIVEN YIELDS OF T. BONDS

 "NEW YORK (AP) — Wall Street fell sharply on Tuesday as it focused on the downside of a surprisingly strong job market.
The S&P 500 dropped 1.4% to its lowest point in four months. The Dow Jones Industrial Average tumbled 430 points, or 1.3%, and wiped out the last of its gains made for the year so far. Some of the heaviest losses came from Big Tech stocks, which sent the Nasdaq composite to a market-leading loss of 1.9%."

",,,Such weight has been the main reason the stock market has lost more than 40% of its value since the end of July, after charging higher for much of the year."

"Why is the stock market down today?
Higher yields on T bonds pull investment dollars away from stocks market.
"What makes bond yields go up?
Yields have been on the march because investors are increasingly taking the Federal Reserve at its word that it will keep its main interest rate high for a long time in order to drive down inflation."

"Fed Gov. Michelle Bowman said in a speech Monday that she expects it will likely be appropriate "to raise rates further and hold them at a restrictive level for some time." Restrictive is what Fed officials call high-enough rates to slow the overall economy."
SOURCE:
https://www.usatoday.com/story/money/2023/10/03/stock-market-falls-treasury-yields-rise-shift-to-bonds/71046838007/


DELOITTE, ACCOUNTING AND CONSULTING FIRM SITS MILES AHEAD OF ITS BIG FOUR RIVALS, RECORDED $65B REVENUE

 "While PwC and KPMG are yet to report their financial year results for 2022/23, Deloitte currently sits miles ahead of its traditional Big Four rivals after posting $65 billion in global revenues.
Professional services firm Deloitte has recorded another recofrd revenue haul over the past financial year, growing by a further 15% (in local currency; 9% given exchange rate fluctuations) to a staggering $65 billion in takings. Notably, the number is almost exactly double the $32.4 billion sum from precisely a decade ago."
"To put the figures in perspective, it was only in 2016, after a few years of jostling, when Deloitte reclaimed the Big Four crown from PwC, with revenues of $36.8 billion against $35.9 billion. Two years later, in 2018, the gap had widened by about $1 billion."

Source:
https://www.consultancy.com.au/news/8135/deloitte-pulls-away-from-big-four-rivals-pwc-ey-and-kpmg

Wednesday, October 4, 2023

AT1 $16B WORTH OF BONDS OF CREDIT SUISSE AND FINMA DECISION TO WRITE OFF IS CHALLENGE IN COURT

 "AT1 investors scored a victory in May when the court ordered the publication of Finma orders writing down the AT bonds worth about $16 billion."
"Accessing those documents is key for bondholders who have borne the brunt of this unprecedented and unacceptable FINMA's order,» said lawyer Dario Item of Lugano-based law firm I&P, which represents a group of AT1 investors. A decision could come in the coming weeks.
"In March, Finma ordered Credit Suisse to completely write off the high-interest AT1 bonds as part of UBS's emergency takeover of the troubled bank, rendering them worthless. By August, lawsuits had been filed on behalf of around 3,000 aggrieved parties against the Finma decision."

SOURCE:
https://www.finews.com/news/english-news/59567-cs-at1-finma-communicatio-ubs-credit-suisses

IMEC. LACKS LOGICAL JUSTIFICATION.

 "Critics argue that India’s new corridor lacks logical justification. India opting for a rail and shipping corridor when the existing and cheaper Suez Canal and maritime routes are available does not make sense. Secondly, building railways through desert terrain requires elevated tracks with deep support to withstand shifting sands and hard bedrock.
The political landscape in the US adds another layer of uncertainty, as opposition to investment in this corridor could increase if the Biden administration loses power. The Republicans, on the other hand, would oppose putting money into a failing project just like they did not want to put money into the Ukraine war. On the other hand, the US and India have previously announced initiatives like the Chabahar Corridor, the International North-South Corridor and the US Blue Dot Network, but the status of these projects remains uncertain."
"...Moreover, IMEC passes through Jordan and Israel, introducing complex geopolitical challenges that demand a delicate blend of economic and diplomatic manoeuvring. Even Türkiye, a key regional player, has expressed dissatisfaction with the project. President Tayyip Erdogan pushed back against plans by India, Saudi Arabia and the EU to create a trade corridor that would bypass Turkey."
Source:
https://tribune.com.pk/story/2439014/imec-unlikely-to-help-float-indias-boat

UBS pays bumper rates on deposits to repair Credit Suisse outflows -sources

 "Clients who deposit their cash at Credit Suisse, now a unit of UBS, earn around 1.8% on upwards of 50,000 Swiss francs ($54,000) held for three months, according to one of the people, who asked to remain anonymous because the matter is private."

"Regaining clients' money and trust in Switzerland is crucial for UBS, which oversees $5.5 trillion in assets for wealthy clients since taking over its former rival. The bank also needs to try to retain clients that would have had funds in both banks and may now look to spread their risk."

SOURCE:

https://www.reuters.com/business/finance/ubs-pays-bumper-rates-deposits-repair-credit-suisse-outflows-sources-2023-10-04/

FED'S HIGHER FOR LONGER STRATEGY. TO THE HIGHER FOR LONG ENOUGH

  Washington, DC CNN  —  Investors are feeling bullish that the Federal Reserve will begin to cut interest rates in the first half of next y...