EU Plans Complaint on 'Volcker Rule'
http://jlne.ws/ypXsdB
Germany wants Greece to relinquish budget controls
http://jlne.ws/AuT94a
Justice Department Unit Issues Subpoenas in Mortgage Fraud Inquiry
http://jlne.ws/wV3b2I
Basel III requirements will reduce corporate performance, say corporate treasurers
http://jlne.ws/yuvqH7
Lehman Says It May Give Creditors $8.1- $10.7B
http://jlne.ws/ysbAAl
Loans and Leases in Bank Credit
http://jlne.ws/xBN7nZ
Citi to Cut Bonuses in Investment Bank About 30%
http://jlne.ws/yxNIrZ
Fitch Downgrades Five Euro-Zone Members
http://jlne.ws/zYfijX
Federal task force to investigate mortgage crisis misconduct
http://jlne.ws/wuAOvH
Outsized Impact of Inventories on GDP Growth
http://jlne.ws/y4s84h
Spain announces budget reform as jobless rate soars above 5 million [Video]
http://jlne.ws/xXVOxc
Fed’s Dudley Sees Significant Impediments to Economic Growth
http://jlne.ws/wU3BYK
Friday, January 27, 2012
Thursday, January 26, 2012
January 26, 2012: Bernanke has finger on trigger for new bond buys [NEWSLETTER]
January 26, 2012
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
Deloitte Consumer Spending Index Ends 2011 on a Low Note; 2012 Outlook Suggests Contraction in Incomes, Future Spending
NEW YORK, Jan. 26, 2012 /PRNewswire/ -- Despite small improvements in three out of four components, the Deloitte Consumer Spending Index (Index) dipped slightly in December due to a decline in housing prices. The Index tracks consumer cash flow as an indicator of future consumer spending.
"Initial unemployment claims continued to decline in December, while real wages benefited from a decrease in energy prices," explained Carl Steidtmann, Deloitte's chief economist and author of the monthly Index. "This positive movement was not substantial enough to offset the continued pressure from the housing market, which has been the most significant drag on the Index for many months."
The Index, which comprises four components — tax burden, initial unemployment claims, real wages, and real home prices — fell to 1.86 from a reading of 1.93 the previous month.
"The New Year brings new demands on retailers," said Alison Paul, vice chairman and U.S. Retail & Distribution sector leader, Deloitte LLP. "In addition to a challenging economic climate, shifts in consumer behavior – from price consciousness to technology adoption – will force retailers to find new ways to remain relevant to their customers in 2012. Retailers should align talent, physical space, processes and technology in a way that moves the in-store environment from transactional to a complete and engaging brand experience."
Highlights of the Index include:
Tax Burden: The tax burden rose slightly to 11.09 percent as state and local governments increased taxes to cover budgetary shortfalls.
Initial Unemployment Claims: Claims moved lower in the most recent month to 396,250, falling below the 400,000 mark for the first time in seven months.
Real Wages: While down 2.1 percent from a year ago, real wages posted a small gain to $8.75 on falling energy prices.
Real Home Prices: Prices fell 5.72 percent from a year ago. Real home prices are now down to levels not seen since the middle of 2000.
Outlook for 2012
The ability for consumers to continue to spend at the rates seen in 2011 may be in question.
"Going forward, it is unlikely there will be another tax cut, and Social Security tax withholding may rise back to its previous level by March," said Steidtmann. "Another 150 basis point drop in savings is not likely, and while gas prices can always fall, the rising tensions in the Middle East would argue against such a drop."
Steidtmann contends that without income growth, spending will contract in a way that outpaces the decline in incomes.
About Deloitte's Retail & Distribution Practice
Deloitte is a leading presence in the retail and distribution industry, providing audit, consulting, enterprise risk management, financial advisory and tax services to 80 percent of the Fortune 500 retailers. With more than 1,400 professionals, Deloitte's Retail & Distribution practice delivers insights and solutions assisting retailers across all major subsectors including apparel, grocery, food and drug, wholesale and distribution and online address critical issues affecting their businesses. For more information about Deloitte's Retail & Distribution sector, please visit www.deloitte.com/us/retail-distribution.
As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
See the full Deloitte release here:
--------------------------------------------------------------------------
Fed's Bernanke To Lead College Classes On Role Of Fed In Today's Economy
The Federal Reserve Board announced on Thursday that Chairman Ben S. Bernanke will deliver a series of lectures aimed at college students. Beginning on March 20, he will lead four classes on "The Federal Reserve and its Role in Today's Economy" as part of a course offered to undergraduates at the George Washington University School of Business. The class will feature a variety of speakers who will discuss central banking. Chairman Bernanke's lectures are scheduled for March 20, 22, 27 and 29 and will begin at 12:45 pm EDT.
Online viewing will be available to the public at www.ustream.tv/channel/federalreserve Leaving the Board. After the lectures, the Board will post transcripts and video recordings at www.federalreserve.gov.
-- Christine Nielsen
Lead Stories
Bernanke has finger on trigger for new bond buys
Reuters
The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy.
http://jlne.ws/wny4n3
FOMC statement from January 24-25 meeting
Reuters via Yahoo! News
WASHINGTON (Reuters) - Following is the Federal Open Market Committee's statement on interest rate policy issued at the close of its meeting on Wednesday: "Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth.
http://jlne.ws/xXDxwd
The Fed acts without acting
The Economist
ONE truth that emerges clearly from the recent history of Federal Reserve monetary-policy action is that changing central bank policy goals is like steering the Titanic. You can see where the ship ought to go, and the captain himself might do his best to pilot it there, but the nature of the beast is that it simply won't turn on a dime. There are too many extremely cautious people influencing policy decisions and too much political and market scrutiny for that.
http://jlne.ws/y4s4aa
Fed on Hold Til Two Years After Mayan Apocalypse, Markets Cheer
Wall Street Journal Blogs
The Fed just extended its promise to keep rates low at least through late 2014.
http://jlne.ws/A4GoVq
**CN: This one was worth including just for the headline.
Bernanke shakes up central bank
By Robin Harding in Washington - Financial Times
Ben Bernanke’s road towards a more transparent US Federal Reserve was a long one, but he got there in the end. His tenure has been marked by momentous Fed meetings, and while this one may have lacked the drama of a weekend gathering to rescue the financial system, its long-term impact will not be less.
http://jlne.ws/zOT64i
The Fed experiments with imperfect tools
Mohamed El-Erian - Financial Times
Policy experimentation continues unabated in the US with the Federal Reserve launching on Wednesday a new initiative to influence market valuations and, through this, the outlook for the country’s economy. The Fed hopes to use greater transparency to mould expectations in a manner that promotes economic growth and price stability. But this new approach could also create confusion and even greater hesitancy on the part of healthy balance sheets to engage in productive investments.
http://jlne.ws/A3xM3q
Rate futures already say Fed rates low until 2014
Market Watch
NEW YORK (MarketWatch) -- Interest-rate futures traders have already shifted expectations for a rate increase from the Federal Reserve out to 2014, analysts said. That may dampen any market impact of a shift in policymakers' language in its policy statement released Wednesday after a two-day meeting.
http://jlne.ws/xlOsIF
Federal Reserve's transparency steps
Reuters via Yahoo! Finance
The Federal Reserve on Wednesday took a series of historic steps toward making the inner workings of its once-secretive rate-setting committee public.
http://jlne.ws/yN85Kt
Fed Rate Decision Welcome, but US Economy Shaky: CEOs
CNBC
The Federal Reserve's announcement on interest rates was welcomed by business leaders in Davos Thursday morning - but there is still nervousness about the future of the US economy.
http://jlne.ws/zdhEQs
Swonk, Broaddus on Fed Statement, QE3 Outlook
Bloomberg
Jan. 25 (Bloomberg) -- Diane Swonk, chief economist at Mesirow Financial Inc., and Alfred Broaddus, former president of the Federal Reserve Bank of Richmond, talk about today's Federal Open Market Committee policy statement and decision to specify a 2 percent goal for long-term inflation.
http://jlne.ws/wSPYAm
Geithner Says Obama Won’t Ask Him to Stay for Second Term
Bloomberg
Jan. 25 (Bloomberg) -- Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected
http://jlne.ws/wnOZyI
Audit rips exec pay in bailouts
Detroit News
An audit released Tuesday criticized the U.S. Treasury Department's decision to allow firms that got large government bailouts to pay some executives cash salaries of more than $500,000 to keep them from quitting.
http://jlne.ws/zDmHb9
Taxpayers still owed $132.9B from bailout: report
Associated Press via Yahoo! Finance
A government watchdog says U.S. taxpayers are still owed $132.9 billion that companies haven't repaid from the financial bailout.
http://jlne.ws/x7ghhj
World Bank's action on Europe reflects fear of another global meltdown
Washington Post
The World Bank is moving to shore up economies in eastern Europe and central Asia as fear intensifies that problems in the euro area have begun spilling over to other parts of the world. The bank announced on Wednesday it would commit $27 billion to protect developing nations in the region from a western European crisis that has begun to undercut trade and investment.
http://jlne.ws/wzqkEL
Soros Promotes Crisis Plan for Europe
By ERIC PFANNER - NY Times
The billionaire investor George Soros said on Wednesday that it was possible Greece could be pushed out of the euro zone this year.
http://jlne.ws/xsziVf
Greek Debt Talks to Resume in Athens as Policy Makers Squabble
BusinessWeek
Talks on a debt swap to avert a Greek default resume today as international policy makers squabble over the mounting cost of the rescue.
http://jlne.ws/yUff34
Germany Approves Bank Bailout Bill
BY ANDREA THOMAS - WSJ
BERLIN—German lawmakers Thursday approved a bill to reactivate the country's bank bailout fund SoFFin to help banks weather the current debt crisis and improve their capital base.
http://jlne.ws/wWH9am
Illinois AG sues S&P over mortgage ratings
By Alejandra Cancino - Chicago Tribune
The nation's largest credit agency, Standard & Poor's, violated Illinois law when it assigned its highest credit rating to risky mortgage-backed investments in the years leading to the collapse of the housing market, Attorney General Lisa Madigan alleged Wednesday.
http://jlne.ws/ydp7RE
Old mortgages rise from the dead, haunt homeowners
In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.
http://jlne.ws/zhSAWb
**CN: An attorney with the National Consumer Law Center says record keeping on the part of the mortgage servicers is not to be trusted
U.S Economy Preferred by Investors in Global Poll on Markets
Bloomberg
Investors are turning increasingly bullish on U.S. markets as they declare its economy in better health than major rivals from Europe to Asia, according to the Bloomberg Global Poll.
http://jlne.ws/yKgR4F
Bank Tejarat Banned by U.S., EU in Move Stifling Iran Trade
BusinessWeek
The U.S. and European Union took steps to cut off from the international financial system Bank Tejarat, the last institution financing high-volume exports and imports between Iran and Europe.
http://jlne.ws/wNPuEe
Events
Treasury Futures: Using International Fixed-Income and Money Market Spreads
January 31, 2012
The IFM Instructs On Using Fixed Income And Money Market Spreads
http://jlne.ws/u7MgUK
National Association of Home Builders' Show
February 10, 2012
Special Session With Fed's Bernanke Open To All Registered Attendees
http://jlne.ws/tEcqjW
Retail Banking in Europe
March 13 and 14, 2012
Marketforce And The IEA’s 13th Annual Conference
http://jlne.ws/wNoXDO
Exchanges, Clearing Houses & MTFs
DTCC Names Mark Davies Vice President, Data Business Development
Press Release
NEW YORK & LONDON--(BUSINESS WIRE)-- The Depository Trust & Clearing Corporation (DTCC) announced today that it has named Mark Davies to the new position of vice president, Data Business Development, focusing on DTCC’s involvement in the Legal Entity Identifier (LEI) program in Europe.
http://jlne.ws/xiSlKD
Eurex and IFM announce joint educational initiative
Press Release
Eurex: Eurex Group and the Institute for Financial Markets (IFM) announced today that they have teamed up to offer a joint educational initiative. Both partners aim to bring IFM’s best-in-class derivatives education to Eurex Exchange members and potential clients as well as the general industry. One joint initiative will be the first-time offering of IFM’s well-respected courses in the form of webinars in English. A large subset of the webinars also will be available in Brazilian Portuguese. Members of the brokerage community will be involved to further extend customer outreach.
http://jlne.ws/y6EQPe
ELX Names Richard Jaycobs Chief Executive Officer
Marketwire
NEW YORK, NY--(Marketwire - Jan 20, 2012) - ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today that veteran futures industry executive Richard Jaycobs will succeed Neal Wolkoff as Chief Executive Officer of ELX.
http://jlne.ws/yxyLKt
Wolkoff Announces Plans to Depart ELX Effective April 30
Marketwire via Yahoo! Finance
NEW YORK, NY-- - Neal L. Wolkoff, Chief Executive Officer of ELX Futures, L.P. , today notified the ELX board of his resignation, effective April 30.
http://jlne.ws/yb1C87
CBOE Futures Exchange (CFE) to Launch Futures on Radar Logic 28-Day Real Estate
Press Release
http://jlne.ws/ybpaRd
GuavaTech Inc. Announces Presence in CME Group's Co-Location Facility
Press Release
Chicago January 25, 2012 – GuavaTech, Inc., a leading managed service provider specializing in customized IT solutions for proprietary trading firms, investment banks, hedge funds, broker/dealers, and FCM’s, today announced that it will begin offering proximity hosting and ultra-low latency connectivity solutions at the new CME Group data center located in Aurora, IL. CME Co-Location Services will launch live trading on January 29, 2012.
http://jlne.ws/AFqEEG
CME deal shows the problem with corporate tax breaks
Chicago Tribune
For several months, CME Group Inc., which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, threatened to relocate outside of Illinois unless it received a specially tailored tax break from the state. The company got its wish when the Illinois Senate passed a bill last month that reduced the financial exchanges' tax bill by about $77 million.
http://jlne.ws/Al18Ah
NYSE Dream of Global Exchange Coming Apart on Derivatives Review
BusinessWeek
A decade-long march by market owners toward greater worldwide scope may be ending in Europe with antitrust regulators recommending against Deutsche Boerse AG's bid for NYSE Euronext.
http://jlne.ws/xiK4Ma
Firms & Banks
MF Global Clients May Lose in $700 Million Bankruptcy Fight
Kit Chellel - Bloomberg
MF Global Holding Ltd.'s clients may be the losers no matter who wins a $700 million dispute between bankruptcy administrators in London and New York that threatens the return of money locked in customer accounts.
http://jlne.ws/xJXvXz
Citigroup's Pandit Says Banks Have to Regain Public Trust
Bloomberg
Citigroup Inc. (C) Chief Executive Officer Vikram Pandit said banks need to start serving clients rather than themselves as the industry tries to rebuild public trust following the financial crisis.
http://jlne.ws/xfTZnI
Citigroup to Consider Further Cuts in Trading, Investment Bank
BusinessWeek
Citigroup Inc., the third-biggest U.S. bank, may make more spending cuts at its securities unit after an investment of almost $1 billion in the business last year failed to boost revenue.
http://jlne.ws/wGP6Ei
Barclays's Diamond Says Still Backs Universal Banking Model
BusinessWeek
Barclays Plc Chief Executive Officer Robert Diamond said he continues to believe in the "strength of the universal banking model" even as some regulators push lenders to split up businesses.
http://jlne.ws/zPlkGB
London Bankers Stay Put as Bonuses Wane
By JULIA WERDIGIER - NY Times
LONDON – The beginning of the year is usually a busy time for bankers and recruiters as many staffers wait to get their bonuses before setting off to a rival.
http://jlne.ws/y8Uybb
Morgan Stanley CEO Says Pay-Cut Complaints Would Be 'Naive'
BusinessWeek
Morgan Stanley Chairman and Chief Executive Officer James Gorman said employees understand why the investment bank had to cut pay, and those who don't grasp the reasoning need to adjust their attitude.
http://jlne.ws/xDaJLK
RBS Said to Be Nearing Sale of Hoare Govett Unit to Jefferies
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest state-owned lender, is nearing an agreement to sell its Hoare Govett corporate broking unit to Jefferies Group Inc., two people with knowledge of the talks said.
http://jlne.ws/wH9D4S
HSBC Seeks Buyer for Japan Retail Banking
BusinessWeek
HSBC Holdings Plc, Europe's largest bank, is seeking buyers for its Japanese consumer banking unit four years after starting the business, said three people familiar with the matter.
http://jlne.ws/yFcKtW
Cantor Fitzgerald & Co. Continues to Expand Its Credit Fixed Income Team
http://jlne.ws/xpDRub
Bank of America Mortgage Woes Lurk Behind Earnings
Forbes
Bank of America's (BAC) fourth-quarter earnings report showed the bank continuing to wrestle with mortgage-related headaches. First take, things look good. Bank of America?s mortgage banking unit earned $2.12 billion, versus an estimate of a $1.44 billion profit from Sandler O?Neill analyst Jeffrey Harte.
http://jlne.ws/xDVx3S
Regulators
Keith Smith Appointed Chairman of Los Angeles Branch Federal Reserve Board
Business Wire via Yahoo! Finance
The Federal Reserve Bank of San Francisco appointed Keith Smith chairman of the Los Angeles Branch board of directors, effective January 1, 2012.
http://jlne.ws/ymR9le
CFTC says customer-fund review comes up clean
Reuters via Yahoo! News
WASHINGTON (Reuters) - The futures regulator said on Wednesday that its spot check of major futures brokerages did not find any material breaches of protections for customer funds. The Commodity Futures Trading Commission conducted the sweep of the industry after the collapse of futures brokerage MF Global in late October.
http://jlne.ws/yfMezL
Global News
Swiss Regulator Steps Up Focus On Housing Market Boom -Survey
FOX Business
Switzerland's financial markets supervisor is stepping up its focus on the country's booming housing market to try and avoid a potential price bubble developing, it said Wednesday.
http://jlne.ws/xz8dPw
The Central Bank Of Myanmar Visits The Stock Exchange Of Thailand
Press Release
SET President Charamporn Jotikasthira welcomed an executive group of the Central Bank of Myanmar, led by Mr. Nay Aye – Deputy Governor of The Central Bank of Myanmar, on the occasion of visiting the SET’s office.
http://jlne.ws/xtwWBY
Brazil Rate Futures Yields Fall as Central Bank Signals Sub-10% Selic Rate
Bloomberg
Yields on Brazilian interest-rate futures contracts fell the most in four months after policy makers signaled they may cut the benchmark Selic rate to below 10 percent.
http://jlne.ws/xxRxoD
RBNZ Stays on Hold but Softens Rate Outlook
CNBC
New Zealand's central bank held its cash rate steady on Thursday, as expected, because of the European debt crisis and modest domestic demand, but added a dovish tone by softening its rate outlook.
http://jlne.ws/zpXPMB
Australian Core Inflation Quickens; Currency Gains as Rate-Cut Bets Pared
Bloomberg
Australia's core inflation rate accelerated above the middle of the central bank's 2 percent to 3 percent annual target range last quarter, prompting traders to pare bets on another interest-rate reduction next month.
http://jlne.ws/yZVGJD
Bank of England unanimously backed steady policy
Market Watch
FRANKFURT (MarketWatch) -- The Bank of England's nine-member Monetary Policy Committee unanimously backed the Jan. 12 decision to leave the central bank's key lending rate unchanged at 0.5% and to maintain its program of asset purchases at 275 billion pounds ($429.2 billion), according to minutes of the policy meeting released Wednesday.
http://jlne.ws/ABedy3
Czech central bank agrees on loan to IMF
Associated Press via Yahoo! News
The board of the Czech central bank has conditionally approved a loan to the International Monetary Fund as part of efforts to stabilize the European debt crisis.
http://jlne.ws/x1iTMB
Thai Central Bank Set To Cut Rates Further In Q2: Capital Economics
Nasdaq
http://jlne.ws/zlcIVN
Japan central bank downgrades growth forecast
Associated Press via Yahoo! News
Japan's central bank said Tuesday it expects the economy to shrink slightly during the fiscal year ending in March instead of expanding as it forecast earlier because of the overseas slowdown.
http://jlne.ws/wStgZy
India's Central Bank Lowers CRR To Infuse Liquidity
Nasdaq
http://jlne.ws/w5IN0S
Disclaimer: The John Lothian, Environmental Markets, JLN Metals, JLN Managed Futures, JLN Interest Rates, JLN Options and JLN FX newsletters and blogs and MarketsWiki are products of John J. Lothian & Company, Inc. The opinions expressed in these publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
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JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
Deloitte Consumer Spending Index Ends 2011 on a Low Note; 2012 Outlook Suggests Contraction in Incomes, Future Spending
NEW YORK, Jan. 26, 2012 /PRNewswire/ -- Despite small improvements in three out of four components, the Deloitte Consumer Spending Index (Index) dipped slightly in December due to a decline in housing prices. The Index tracks consumer cash flow as an indicator of future consumer spending.
"Initial unemployment claims continued to decline in December, while real wages benefited from a decrease in energy prices," explained Carl Steidtmann, Deloitte's chief economist and author of the monthly Index. "This positive movement was not substantial enough to offset the continued pressure from the housing market, which has been the most significant drag on the Index for many months."
The Index, which comprises four components — tax burden, initial unemployment claims, real wages, and real home prices — fell to 1.86 from a reading of 1.93 the previous month.
"The New Year brings new demands on retailers," said Alison Paul, vice chairman and U.S. Retail & Distribution sector leader, Deloitte LLP. "In addition to a challenging economic climate, shifts in consumer behavior – from price consciousness to technology adoption – will force retailers to find new ways to remain relevant to their customers in 2012. Retailers should align talent, physical space, processes and technology in a way that moves the in-store environment from transactional to a complete and engaging brand experience."
Highlights of the Index include:
Tax Burden: The tax burden rose slightly to 11.09 percent as state and local governments increased taxes to cover budgetary shortfalls.
Initial Unemployment Claims: Claims moved lower in the most recent month to 396,250, falling below the 400,000 mark for the first time in seven months.
Real Wages: While down 2.1 percent from a year ago, real wages posted a small gain to $8.75 on falling energy prices.
Real Home Prices: Prices fell 5.72 percent from a year ago. Real home prices are now down to levels not seen since the middle of 2000.
Outlook for 2012
The ability for consumers to continue to spend at the rates seen in 2011 may be in question.
"Going forward, it is unlikely there will be another tax cut, and Social Security tax withholding may rise back to its previous level by March," said Steidtmann. "Another 150 basis point drop in savings is not likely, and while gas prices can always fall, the rising tensions in the Middle East would argue against such a drop."
Steidtmann contends that without income growth, spending will contract in a way that outpaces the decline in incomes.
About Deloitte's Retail & Distribution Practice
Deloitte is a leading presence in the retail and distribution industry, providing audit, consulting, enterprise risk management, financial advisory and tax services to 80 percent of the Fortune 500 retailers. With more than 1,400 professionals, Deloitte's Retail & Distribution practice delivers insights and solutions assisting retailers across all major subsectors including apparel, grocery, food and drug, wholesale and distribution and online address critical issues affecting their businesses. For more information about Deloitte's Retail & Distribution sector, please visit www.deloitte.com/us/retail-distribution.
As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
See the full Deloitte release here:
--------------------------------------------------------------------------
Fed's Bernanke To Lead College Classes On Role Of Fed In Today's Economy
The Federal Reserve Board announced on Thursday that Chairman Ben S. Bernanke will deliver a series of lectures aimed at college students. Beginning on March 20, he will lead four classes on "The Federal Reserve and its Role in Today's Economy" as part of a course offered to undergraduates at the George Washington University School of Business. The class will feature a variety of speakers who will discuss central banking. Chairman Bernanke's lectures are scheduled for March 20, 22, 27 and 29 and will begin at 12:45 pm EDT.
Online viewing will be available to the public at www.ustream.tv/channel/federalreserve Leaving the Board. After the lectures, the Board will post transcripts and video recordings at www.federalreserve.gov.
-- Christine Nielsen
Lead Stories
Bernanke has finger on trigger for new bond buys
Reuters
The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy.
http://jlne.ws/wny4n3
FOMC statement from January 24-25 meeting
Reuters via Yahoo! News
WASHINGTON (Reuters) - Following is the Federal Open Market Committee's statement on interest rate policy issued at the close of its meeting on Wednesday: "Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth.
http://jlne.ws/xXDxwd
The Fed acts without acting
The Economist
ONE truth that emerges clearly from the recent history of Federal Reserve monetary-policy action is that changing central bank policy goals is like steering the Titanic. You can see where the ship ought to go, and the captain himself might do his best to pilot it there, but the nature of the beast is that it simply won't turn on a dime. There are too many extremely cautious people influencing policy decisions and too much political and market scrutiny for that.
http://jlne.ws/y4s4aa
Fed on Hold Til Two Years After Mayan Apocalypse, Markets Cheer
Wall Street Journal Blogs
The Fed just extended its promise to keep rates low at least through late 2014.
http://jlne.ws/A4GoVq
**CN: This one was worth including just for the headline.
Bernanke shakes up central bank
By Robin Harding in Washington - Financial Times
Ben Bernanke’s road towards a more transparent US Federal Reserve was a long one, but he got there in the end. His tenure has been marked by momentous Fed meetings, and while this one may have lacked the drama of a weekend gathering to rescue the financial system, its long-term impact will not be less.
http://jlne.ws/zOT64i
The Fed experiments with imperfect tools
Mohamed El-Erian - Financial Times
Policy experimentation continues unabated in the US with the Federal Reserve launching on Wednesday a new initiative to influence market valuations and, through this, the outlook for the country’s economy. The Fed hopes to use greater transparency to mould expectations in a manner that promotes economic growth and price stability. But this new approach could also create confusion and even greater hesitancy on the part of healthy balance sheets to engage in productive investments.
http://jlne.ws/A3xM3q
Rate futures already say Fed rates low until 2014
Market Watch
NEW YORK (MarketWatch) -- Interest-rate futures traders have already shifted expectations for a rate increase from the Federal Reserve out to 2014, analysts said. That may dampen any market impact of a shift in policymakers' language in its policy statement released Wednesday after a two-day meeting.
http://jlne.ws/xlOsIF
Federal Reserve's transparency steps
Reuters via Yahoo! Finance
The Federal Reserve on Wednesday took a series of historic steps toward making the inner workings of its once-secretive rate-setting committee public.
http://jlne.ws/yN85Kt
Fed Rate Decision Welcome, but US Economy Shaky: CEOs
CNBC
The Federal Reserve's announcement on interest rates was welcomed by business leaders in Davos Thursday morning - but there is still nervousness about the future of the US economy.
http://jlne.ws/zdhEQs
Swonk, Broaddus on Fed Statement, QE3 Outlook
Bloomberg
Jan. 25 (Bloomberg) -- Diane Swonk, chief economist at Mesirow Financial Inc., and Alfred Broaddus, former president of the Federal Reserve Bank of Richmond, talk about today's Federal Open Market Committee policy statement and decision to specify a 2 percent goal for long-term inflation.
http://jlne.ws/wSPYAm
Geithner Says Obama Won’t Ask Him to Stay for Second Term
Bloomberg
Jan. 25 (Bloomberg) -- Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected
http://jlne.ws/wnOZyI
Audit rips exec pay in bailouts
Detroit News
An audit released Tuesday criticized the U.S. Treasury Department's decision to allow firms that got large government bailouts to pay some executives cash salaries of more than $500,000 to keep them from quitting.
http://jlne.ws/zDmHb9
Taxpayers still owed $132.9B from bailout: report
Associated Press via Yahoo! Finance
A government watchdog says U.S. taxpayers are still owed $132.9 billion that companies haven't repaid from the financial bailout.
http://jlne.ws/x7ghhj
World Bank's action on Europe reflects fear of another global meltdown
Washington Post
The World Bank is moving to shore up economies in eastern Europe and central Asia as fear intensifies that problems in the euro area have begun spilling over to other parts of the world. The bank announced on Wednesday it would commit $27 billion to protect developing nations in the region from a western European crisis that has begun to undercut trade and investment.
http://jlne.ws/wzqkEL
Soros Promotes Crisis Plan for Europe
By ERIC PFANNER - NY Times
The billionaire investor George Soros said on Wednesday that it was possible Greece could be pushed out of the euro zone this year.
http://jlne.ws/xsziVf
Greek Debt Talks to Resume in Athens as Policy Makers Squabble
BusinessWeek
Talks on a debt swap to avert a Greek default resume today as international policy makers squabble over the mounting cost of the rescue.
http://jlne.ws/yUff34
Germany Approves Bank Bailout Bill
BY ANDREA THOMAS - WSJ
BERLIN—German lawmakers Thursday approved a bill to reactivate the country's bank bailout fund SoFFin to help banks weather the current debt crisis and improve their capital base.
http://jlne.ws/wWH9am
Illinois AG sues S&P over mortgage ratings
By Alejandra Cancino - Chicago Tribune
The nation's largest credit agency, Standard & Poor's, violated Illinois law when it assigned its highest credit rating to risky mortgage-backed investments in the years leading to the collapse of the housing market, Attorney General Lisa Madigan alleged Wednesday.
http://jlne.ws/ydp7RE
Old mortgages rise from the dead, haunt homeowners
In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.
http://jlne.ws/zhSAWb
**CN: An attorney with the National Consumer Law Center says record keeping on the part of the mortgage servicers is not to be trusted
U.S Economy Preferred by Investors in Global Poll on Markets
Bloomberg
Investors are turning increasingly bullish on U.S. markets as they declare its economy in better health than major rivals from Europe to Asia, according to the Bloomberg Global Poll.
http://jlne.ws/yKgR4F
Bank Tejarat Banned by U.S., EU in Move Stifling Iran Trade
BusinessWeek
The U.S. and European Union took steps to cut off from the international financial system Bank Tejarat, the last institution financing high-volume exports and imports between Iran and Europe.
http://jlne.ws/wNPuEe
Events
Treasury Futures: Using International Fixed-Income and Money Market Spreads
January 31, 2012
The IFM Instructs On Using Fixed Income And Money Market Spreads
http://jlne.ws/u7MgUK
National Association of Home Builders' Show
February 10, 2012
Special Session With Fed's Bernanke Open To All Registered Attendees
http://jlne.ws/tEcqjW
Retail Banking in Europe
March 13 and 14, 2012
Marketforce And The IEA’s 13th Annual Conference
http://jlne.ws/wNoXDO
Exchanges, Clearing Houses & MTFs
DTCC Names Mark Davies Vice President, Data Business Development
Press Release
NEW YORK & LONDON--(BUSINESS WIRE)-- The Depository Trust & Clearing Corporation (DTCC) announced today that it has named Mark Davies to the new position of vice president, Data Business Development, focusing on DTCC’s involvement in the Legal Entity Identifier (LEI) program in Europe.
http://jlne.ws/xiSlKD
Eurex and IFM announce joint educational initiative
Press Release
Eurex: Eurex Group and the Institute for Financial Markets (IFM) announced today that they have teamed up to offer a joint educational initiative. Both partners aim to bring IFM’s best-in-class derivatives education to Eurex Exchange members and potential clients as well as the general industry. One joint initiative will be the first-time offering of IFM’s well-respected courses in the form of webinars in English. A large subset of the webinars also will be available in Brazilian Portuguese. Members of the brokerage community will be involved to further extend customer outreach.
http://jlne.ws/y6EQPe
ELX Names Richard Jaycobs Chief Executive Officer
Marketwire
NEW YORK, NY--(Marketwire - Jan 20, 2012) - ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today that veteran futures industry executive Richard Jaycobs will succeed Neal Wolkoff as Chief Executive Officer of ELX.
http://jlne.ws/yxyLKt
Wolkoff Announces Plans to Depart ELX Effective April 30
Marketwire via Yahoo! Finance
NEW YORK, NY-- - Neal L. Wolkoff, Chief Executive Officer of ELX Futures, L.P. , today notified the ELX board of his resignation, effective April 30.
http://jlne.ws/yb1C87
CBOE Futures Exchange (CFE) to Launch Futures on Radar Logic 28-Day Real Estate
Press Release
http://jlne.ws/ybpaRd
GuavaTech Inc. Announces Presence in CME Group's Co-Location Facility
Press Release
Chicago January 25, 2012 – GuavaTech, Inc., a leading managed service provider specializing in customized IT solutions for proprietary trading firms, investment banks, hedge funds, broker/dealers, and FCM’s, today announced that it will begin offering proximity hosting and ultra-low latency connectivity solutions at the new CME Group data center located in Aurora, IL. CME Co-Location Services will launch live trading on January 29, 2012.
http://jlne.ws/AFqEEG
CME deal shows the problem with corporate tax breaks
Chicago Tribune
For several months, CME Group Inc., which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, threatened to relocate outside of Illinois unless it received a specially tailored tax break from the state. The company got its wish when the Illinois Senate passed a bill last month that reduced the financial exchanges' tax bill by about $77 million.
http://jlne.ws/Al18Ah
NYSE Dream of Global Exchange Coming Apart on Derivatives Review
BusinessWeek
A decade-long march by market owners toward greater worldwide scope may be ending in Europe with antitrust regulators recommending against Deutsche Boerse AG's bid for NYSE Euronext.
http://jlne.ws/xiK4Ma
Firms & Banks
MF Global Clients May Lose in $700 Million Bankruptcy Fight
Kit Chellel - Bloomberg
MF Global Holding Ltd.'s clients may be the losers no matter who wins a $700 million dispute between bankruptcy administrators in London and New York that threatens the return of money locked in customer accounts.
http://jlne.ws/xJXvXz
Citigroup's Pandit Says Banks Have to Regain Public Trust
Bloomberg
Citigroup Inc. (C) Chief Executive Officer Vikram Pandit said banks need to start serving clients rather than themselves as the industry tries to rebuild public trust following the financial crisis.
http://jlne.ws/xfTZnI
Citigroup to Consider Further Cuts in Trading, Investment Bank
BusinessWeek
Citigroup Inc., the third-biggest U.S. bank, may make more spending cuts at its securities unit after an investment of almost $1 billion in the business last year failed to boost revenue.
http://jlne.ws/wGP6Ei
Barclays's Diamond Says Still Backs Universal Banking Model
BusinessWeek
Barclays Plc Chief Executive Officer Robert Diamond said he continues to believe in the "strength of the universal banking model" even as some regulators push lenders to split up businesses.
http://jlne.ws/zPlkGB
London Bankers Stay Put as Bonuses Wane
By JULIA WERDIGIER - NY Times
LONDON – The beginning of the year is usually a busy time for bankers and recruiters as many staffers wait to get their bonuses before setting off to a rival.
http://jlne.ws/y8Uybb
Morgan Stanley CEO Says Pay-Cut Complaints Would Be 'Naive'
BusinessWeek
Morgan Stanley Chairman and Chief Executive Officer James Gorman said employees understand why the investment bank had to cut pay, and those who don't grasp the reasoning need to adjust their attitude.
http://jlne.ws/xDaJLK
RBS Said to Be Nearing Sale of Hoare Govett Unit to Jefferies
BusinessWeek
Royal Bank of Scotland Group Plc, Britain's biggest state-owned lender, is nearing an agreement to sell its Hoare Govett corporate broking unit to Jefferies Group Inc., two people with knowledge of the talks said.
http://jlne.ws/wH9D4S
HSBC Seeks Buyer for Japan Retail Banking
BusinessWeek
HSBC Holdings Plc, Europe's largest bank, is seeking buyers for its Japanese consumer banking unit four years after starting the business, said three people familiar with the matter.
http://jlne.ws/yFcKtW
Cantor Fitzgerald & Co. Continues to Expand Its Credit Fixed Income Team
http://jlne.ws/xpDRub
Bank of America Mortgage Woes Lurk Behind Earnings
Forbes
Bank of America's (BAC) fourth-quarter earnings report showed the bank continuing to wrestle with mortgage-related headaches. First take, things look good. Bank of America?s mortgage banking unit earned $2.12 billion, versus an estimate of a $1.44 billion profit from Sandler O?Neill analyst Jeffrey Harte.
http://jlne.ws/xDVx3S
Regulators
Keith Smith Appointed Chairman of Los Angeles Branch Federal Reserve Board
Business Wire via Yahoo! Finance
The Federal Reserve Bank of San Francisco appointed Keith Smith chairman of the Los Angeles Branch board of directors, effective January 1, 2012.
http://jlne.ws/ymR9le
CFTC says customer-fund review comes up clean
Reuters via Yahoo! News
WASHINGTON (Reuters) - The futures regulator said on Wednesday that its spot check of major futures brokerages did not find any material breaches of protections for customer funds. The Commodity Futures Trading Commission conducted the sweep of the industry after the collapse of futures brokerage MF Global in late October.
http://jlne.ws/yfMezL
Global News
Swiss Regulator Steps Up Focus On Housing Market Boom -Survey
FOX Business
Switzerland's financial markets supervisor is stepping up its focus on the country's booming housing market to try and avoid a potential price bubble developing, it said Wednesday.
http://jlne.ws/xz8dPw
The Central Bank Of Myanmar Visits The Stock Exchange Of Thailand
Press Release
SET President Charamporn Jotikasthira welcomed an executive group of the Central Bank of Myanmar, led by Mr. Nay Aye – Deputy Governor of The Central Bank of Myanmar, on the occasion of visiting the SET’s office.
http://jlne.ws/xtwWBY
Brazil Rate Futures Yields Fall as Central Bank Signals Sub-10% Selic Rate
Bloomberg
Yields on Brazilian interest-rate futures contracts fell the most in four months after policy makers signaled they may cut the benchmark Selic rate to below 10 percent.
http://jlne.ws/xxRxoD
RBNZ Stays on Hold but Softens Rate Outlook
CNBC
New Zealand's central bank held its cash rate steady on Thursday, as expected, because of the European debt crisis and modest domestic demand, but added a dovish tone by softening its rate outlook.
http://jlne.ws/zpXPMB
Australian Core Inflation Quickens; Currency Gains as Rate-Cut Bets Pared
Bloomberg
Australia's core inflation rate accelerated above the middle of the central bank's 2 percent to 3 percent annual target range last quarter, prompting traders to pare bets on another interest-rate reduction next month.
http://jlne.ws/yZVGJD
Bank of England unanimously backed steady policy
Market Watch
FRANKFURT (MarketWatch) -- The Bank of England's nine-member Monetary Policy Committee unanimously backed the Jan. 12 decision to leave the central bank's key lending rate unchanged at 0.5% and to maintain its program of asset purchases at 275 billion pounds ($429.2 billion), according to minutes of the policy meeting released Wednesday.
http://jlne.ws/ABedy3
Czech central bank agrees on loan to IMF
Associated Press via Yahoo! News
The board of the Czech central bank has conditionally approved a loan to the International Monetary Fund as part of efforts to stabilize the European debt crisis.
http://jlne.ws/x1iTMB
Thai Central Bank Set To Cut Rates Further In Q2: Capital Economics
Nasdaq
http://jlne.ws/zlcIVN
Japan central bank downgrades growth forecast
Associated Press via Yahoo! News
Japan's central bank said Tuesday it expects the economy to shrink slightly during the fiscal year ending in March instead of expanding as it forecast earlier because of the overseas slowdown.
http://jlne.ws/wStgZy
India's Central Bank Lowers CRR To Infuse Liquidity
Nasdaq
http://jlne.ws/w5IN0S
Disclaimer: The John Lothian, Environmental Markets, JLN Metals, JLN Managed Futures, JLN Interest Rates, JLN Options and JLN FX newsletters and blogs and MarketsWiki are products of John J. Lothian & Company, Inc. The opinions expressed in these publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
Futures and options trading involve risk. Past results are no indication of future performance.
Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any web site or newsletter content.
Copyright 2011 John J. Lothian & Company, Inc. All Rights Reserved.
Wednesday, January 25, 2012
Top Interest Rate Headlines 01-25-2012: Bernanke Says Fed Pondering Further Stimulus
Bernanke says Fed pondering further stimulus
Reuters
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank was ready to offer the economy additional stimulus after it announced interest rates would likely remain near zero until at least late 2014.
http://jlne.ws/z97Uic
Tim Geithner Won't Stay On If Obama Wins Second Term: Report
Huffington Post
Barack Obama won't ask Timothy Geithner to stay on as Treasury Secretary if the president wins reelection, Geithner told Bloomberg TV's Trish Regan Wednesday.
http://jlne.ws/wOaZwg
Bernanke says Fed pondering further stimulus
Yahoo! News
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank was ready to offer the economy additional stimulus after it announced interest rates would likely remain near zero until at least late 2014.
http://jlne.ws/z97Uic
CFTC Releases Results of Limited Reviews of Futures Commission Merchants
Press Release
The Commodity Futures Trading Commission (CFTC or Commission) today released findings of limited reviews of futures commission merchants (FCMs) to assess compliance with requirements to segregate customer funds pursuant to Section 4d of the Commodity Exchange Act (ACT). The limited reviews also covered the FCMs’ obligation to set aside in secured accounts funds deposited by customers for trading on foreign boards of trade under Section 4(b) of the Act and Part 30 of the Commission’s regulations. As of the review date for each FCM, all of the FCMs were in compliance with the segregation or Part 30 secured amount requirements.
http://jlne.ws/wlTODg
Merkel: Germany Ready to Transfer More Power to Europe
WSJ.com
German Chancellor Angela Merkel, sharply criticized for her government's prescriptions of austerity as a cure for the euro zone's sovereign-debt crisis, said labor-market reforms and greater European integration also were needed to correct flaws in the makeup of the common currency.
http://jlne.ws/xoohUi
Merkel says 'big rethink needed'
BBC
Germany's Chancellor Angela Merkel has told the World Economic Forum that a "big rethink" is needed in the eurozone within the global economy.
http://jlne.ws/xJy16Q
Federal Reserve Board and Federal Open Market Committee release economic projections from Jan 24-25 FOMC meeting
http://jlne.ws/zuXPrs
Barbara Rehm: Fed s Low-Rate Strategy May Come at a High Cost
American Banker
The central bank has held the federal funds rate near zero for over three years and intends to keep it there. Negative consequences are inevitable and policymakers ability to manage them far from certain.
http://jlne.ws/yURArv
Federal Open Market Committee Statement - Jan. 25, 2012
http://jlne.ws/wKabJg
Reuters
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank was ready to offer the economy additional stimulus after it announced interest rates would likely remain near zero until at least late 2014.
http://jlne.ws/z97Uic
Tim Geithner Won't Stay On If Obama Wins Second Term: Report
Huffington Post
Barack Obama won't ask Timothy Geithner to stay on as Treasury Secretary if the president wins reelection, Geithner told Bloomberg TV's Trish Regan Wednesday.
http://jlne.ws/wOaZwg
Bernanke says Fed pondering further stimulus
Yahoo! News
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank was ready to offer the economy additional stimulus after it announced interest rates would likely remain near zero until at least late 2014.
http://jlne.ws/z97Uic
CFTC Releases Results of Limited Reviews of Futures Commission Merchants
Press Release
The Commodity Futures Trading Commission (CFTC or Commission) today released findings of limited reviews of futures commission merchants (FCMs) to assess compliance with requirements to segregate customer funds pursuant to Section 4d of the Commodity Exchange Act (ACT). The limited reviews also covered the FCMs’ obligation to set aside in secured accounts funds deposited by customers for trading on foreign boards of trade under Section 4(b) of the Act and Part 30 of the Commission’s regulations. As of the review date for each FCM, all of the FCMs were in compliance with the segregation or Part 30 secured amount requirements.
http://jlne.ws/wlTODg
Merkel: Germany Ready to Transfer More Power to Europe
WSJ.com
German Chancellor Angela Merkel, sharply criticized for her government's prescriptions of austerity as a cure for the euro zone's sovereign-debt crisis, said labor-market reforms and greater European integration also were needed to correct flaws in the makeup of the common currency.
http://jlne.ws/xoohUi
Merkel says 'big rethink needed'
BBC
Germany's Chancellor Angela Merkel has told the World Economic Forum that a "big rethink" is needed in the eurozone within the global economy.
http://jlne.ws/xJy16Q
Federal Reserve Board and Federal Open Market Committee release economic projections from Jan 24-25 FOMC meeting
http://jlne.ws/zuXPrs
Barbara Rehm: Fed s Low-Rate Strategy May Come at a High Cost
American Banker
The central bank has held the federal funds rate near zero for over three years and intends to keep it there. Negative consequences are inevitable and policymakers ability to manage them far from certain.
http://jlne.ws/yURArv
Federal Open Market Committee Statement - Jan. 25, 2012
http://jlne.ws/wKabJg
Federal Open Market Committee Statement - Jan. 25, 2012
Press Release
Release Date: January 25, 2012
For immediate release
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.
2012 Monetary Policy Releases
Last update: January 25, 2012
Release Date: January 25, 2012
For immediate release
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.
2012 Monetary Policy Releases
Last update: January 25, 2012
Tuesday, January 24, 2012
Top Interest Rate Headlines 01-24-12: CME Group Talks Interest Rate Highlights From 2011
[Video] CME Group's global head of interest rate products talks about highlights from 2011 http://t.co/zMGhrZGK
Corzine Is Sued Under Racketeering Law by MF Global’s Commodity Customers
By Linda Sandler - Bloomberg
Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, was sued under U.S. racketeering law by commodity customers alleging he and other executives “unlawfully” took money from their accounts and failed to segregate their money as the law requires.
http://jlne.ws/x9pXRG
Super-Rich Play Snow Polo as Igloo Agitators Heckle Davos Elite
BusinessWeek
Europe's rich and famous faced tough decisions as they assembled at a chic Swiss ski resort this weekend: whether to drink Taittinger or whisky-infused hot chocolate, and which piglet to back in the afternoon race.
http://jlne.ws/A7gnGH
EU's Barnier says will stick to bank capital plan
Reuters via Yahoo! News
LONDON (Reuters) - Michel Barnier, European Commissioner in charge of financial regulation, said on Monday that he would stick strictly to a timetable already agreed for implementing stricter Basel III bank capital requirements.
http://jlne.ws/wE5rNj
Bold thoughts needed to stem banker exodus
By Tom Braithwaite - Financial Times
Kenneth Griffin, the head of Citadel, has a pile of CVs equivalent to half the population of Pittsburgh. Some 150,000 potential recruits are in the hedge fund’s “talent database”, he revealed last week in a letter to investors.
http://jlne.ws/yP5bEL
European Parliament To Scrutinize Credit Rating Agencies' Work And Sovereign Debt Ratings
Press Release
http://jlne.ws/yrTXdC
Fannie, Freddie writedowns too costly: Regulator
Reuters
The regulator for Fannie Mae and Freddie Mac told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.
http://jlne.ws/wJ6Dtq
Dealers frustrated by SG's refusal to clear CDS
By Christopher Whittall - IFR
LONDON, Jan 23 (IFR) - The refusal by Societe Generale to clear eligible credit default swaps through a central counterparty is frustrating some market participants.
http://jlne.ws/y52KJP
Pandit Pariah No More as U.S. Bankers Gain Ascendancy at Davos
Bloomberg
Citigroup Inc. (C) 's Vikram Pandit, leader of the U.S. bank that took the most government aid in the financial crisis and that has the worst stock performance over the past decade, is ready for a starring role at Davos.
http://jlne.ws/zdw4j1
JPMorgan Sued by John Hancock Over Mortgage Securities
Bloomberg
JPMorgan Chase & Co. was sued by Manulife Financial Corp.'s John Hancock Life Insurance unit, which accused the bank of fraud in connection with the sale of residential mortgage-backed securities.
http://jlne.ws/xvoljH
Corzine Is Sued Under Racketeering Law by MF Global’s Commodity Customers
By Linda Sandler - Bloomberg
Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, was sued under U.S. racketeering law by commodity customers alleging he and other executives “unlawfully” took money from their accounts and failed to segregate their money as the law requires.
http://jlne.ws/x9pXRG
Super-Rich Play Snow Polo as Igloo Agitators Heckle Davos Elite
BusinessWeek
Europe's rich and famous faced tough decisions as they assembled at a chic Swiss ski resort this weekend: whether to drink Taittinger or whisky-infused hot chocolate, and which piglet to back in the afternoon race.
http://jlne.ws/A7gnGH
EU's Barnier says will stick to bank capital plan
Reuters via Yahoo! News
LONDON (Reuters) - Michel Barnier, European Commissioner in charge of financial regulation, said on Monday that he would stick strictly to a timetable already agreed for implementing stricter Basel III bank capital requirements.
http://jlne.ws/wE5rNj
Bold thoughts needed to stem banker exodus
By Tom Braithwaite - Financial Times
Kenneth Griffin, the head of Citadel, has a pile of CVs equivalent to half the population of Pittsburgh. Some 150,000 potential recruits are in the hedge fund’s “talent database”, he revealed last week in a letter to investors.
http://jlne.ws/yP5bEL
European Parliament To Scrutinize Credit Rating Agencies' Work And Sovereign Debt Ratings
Press Release
http://jlne.ws/yrTXdC
Fannie, Freddie writedowns too costly: Regulator
Reuters
The regulator for Fannie Mae and Freddie Mac told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.
http://jlne.ws/wJ6Dtq
Dealers frustrated by SG's refusal to clear CDS
By Christopher Whittall - IFR
LONDON, Jan 23 (IFR) - The refusal by Societe Generale to clear eligible credit default swaps through a central counterparty is frustrating some market participants.
http://jlne.ws/y52KJP
Pandit Pariah No More as U.S. Bankers Gain Ascendancy at Davos
Bloomberg
Citigroup Inc. (C) 's Vikram Pandit, leader of the U.S. bank that took the most government aid in the financial crisis and that has the worst stock performance over the past decade, is ready for a starring role at Davos.
http://jlne.ws/zdw4j1
JPMorgan Sued by John Hancock Over Mortgage Securities
Bloomberg
JPMorgan Chase & Co. was sued by Manulife Financial Corp.'s John Hancock Life Insurance unit, which accused the bank of fraud in connection with the sale of residential mortgage-backed securities.
http://jlne.ws/xvoljH
Monday, January 23, 2012
Top Interest Rate Headlines 01-23-2012: Europe Heads to Davos Surprising Doomsayers
Europe Heads to Davos Surprising Doomsayers
Bloomberg
European leaders heading to the home of Thomas Mann’s Magic Mountain sanatorium are surprising credit-ratings companies, and the economists who agree with them, as the consensus predicts another year of trauma for the euro area.
http://jlne.ws/zyHeUu
S&P Downgrades Eurozone Sovereign Debt
CME Group
Standard & Poor's announced that it had downgraded the long-term sovereign debt credit ratings of nine European countries on January 13, 2012. This action was predicated on the view that policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the Eurozone. S&P further rated the outlook, of 14 of the 16 Eurozone sovereign entities as "negative."
http://jlne.ws/z7dngM
Big Banks Killed in 4Q Mortgage Results
American Banker
The big banks' mortgage woes keep piling up, in a backlog that is likely to drag down their profits — and a broader housing recovery — for the foreseeable future.
http://jlne.ws/y7K49F
Australia Economy Still Strong, but China Crucial: Rudd
CNBC
Despite soft economic data out of Australia in recent weeks, the country’s Foreign Minister and Former Prime Minister, Kevin Rudd, tells CNBC the economy remains on solid footing as a result of robust fundamentals and strong growth out of top trading partner China.
http://jlne.ws/yMP7AE
Chinese economy to see significant slowdown in 2012, Nouriel Roubini says
Financial Post
China’s economy will slow in 2012, prompting policy makers to reduce interest rates and loosen lending restrictions, said Nouriel Roubini, the economist who predicted the 2008 financial crisis.
http://jlne.ws/xNVPoy
IMF's Lagarde calls for larger 'firewall' in Europe
CNN Money
The director of the International Monetary Fund said Monday that Europe needs a stronger financial firewall to stop the spread of debt contagion in the eurozone.
http://jlne.ws/AF5JJ4
What’s behind Republican attacks on the Fed
MarketWatch
The Federal Reserve has been working for months on improving its communication with financial markets. But the central bank does not seem to speak the same language as one key group — Republican primary voters.
http://jlne.ws/z7vEt2
Fears Grow for Portuguese Economy
WSJ.com
Investors, economists and politicians are increasingly concerned that Portugal will need a second bailout as fears mount that it won't be able to return to markets for financing next year.
http://jlne.ws/wPOVUB
MarkitServ starts interest rate derivative trade data feed to DTCC repository
Press Release
MarkitSERV, the most widely used electronic trade processing service for OTC derivative transactions, today announced that it is now transmitting confirmed trade records to the Depository Trust and Clearing Corporation's (DTCC) new Global Trade Repository (GTR) for over-the-counter (OTC) interest rate derivatives.
http://jlne.ws/y5uCXV
Number of the Week: When Will Fed Raise Rates?
WSJ.com
The number of months the Federal Reserve has kept rates near zero. The Federal Reserve gives its latest signal next week on when it plans to raise rates from historic lows. The only thing we know for sure is that it won’t be any time soon.
http://jlne.ws/wKdaly
Economists see growth slowing, recession risk falling
USA Today
The U.S. economy's growth will slow this year after a blast of stronger growth in late 2011, leaving the 8.5% unemployment rate about where it is now on Election Day, according to USA TODAY's quarterly survey of economists.
http://jlne.ws/A4CFu7
MOODY'S: Odds Of A Greek Debt Default Disaster And Exit From The Euro Are On The Rise
Business Insider
Moody's downgraded five Greek covered bond transactions today, amid ongoing tensions over private sector involvement in an orderly default that needs to take place by late March.
http://jlne.ws/yQk1F6
Goldman: U.S. Data May Look Better Than They Are
Bloomberg
A decline in unemployment and pickup in manufacturing point to accelerating U.S. growth. Some economists say the numbers may not be as good as they look.
http://jlne.ws/yDjT6n
Bloomberg
European leaders heading to the home of Thomas Mann’s Magic Mountain sanatorium are surprising credit-ratings companies, and the economists who agree with them, as the consensus predicts another year of trauma for the euro area.
http://jlne.ws/zyHeUu
S&P Downgrades Eurozone Sovereign Debt
CME Group
Standard & Poor's announced that it had downgraded the long-term sovereign debt credit ratings of nine European countries on January 13, 2012. This action was predicated on the view that policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the Eurozone. S&P further rated the outlook, of 14 of the 16 Eurozone sovereign entities as "negative."
http://jlne.ws/z7dngM
Big Banks Killed in 4Q Mortgage Results
American Banker
The big banks' mortgage woes keep piling up, in a backlog that is likely to drag down their profits — and a broader housing recovery — for the foreseeable future.
http://jlne.ws/y7K49F
Australia Economy Still Strong, but China Crucial: Rudd
CNBC
Despite soft economic data out of Australia in recent weeks, the country’s Foreign Minister and Former Prime Minister, Kevin Rudd, tells CNBC the economy remains on solid footing as a result of robust fundamentals and strong growth out of top trading partner China.
http://jlne.ws/yMP7AE
Chinese economy to see significant slowdown in 2012, Nouriel Roubini says
Financial Post
China’s economy will slow in 2012, prompting policy makers to reduce interest rates and loosen lending restrictions, said Nouriel Roubini, the economist who predicted the 2008 financial crisis.
http://jlne.ws/xNVPoy
IMF's Lagarde calls for larger 'firewall' in Europe
CNN Money
The director of the International Monetary Fund said Monday that Europe needs a stronger financial firewall to stop the spread of debt contagion in the eurozone.
http://jlne.ws/AF5JJ4
What’s behind Republican attacks on the Fed
MarketWatch
The Federal Reserve has been working for months on improving its communication with financial markets. But the central bank does not seem to speak the same language as one key group — Republican primary voters.
http://jlne.ws/z7vEt2
Fears Grow for Portuguese Economy
WSJ.com
Investors, economists and politicians are increasingly concerned that Portugal will need a second bailout as fears mount that it won't be able to return to markets for financing next year.
http://jlne.ws/wPOVUB
MarkitServ starts interest rate derivative trade data feed to DTCC repository
Press Release
MarkitSERV, the most widely used electronic trade processing service for OTC derivative transactions, today announced that it is now transmitting confirmed trade records to the Depository Trust and Clearing Corporation's (DTCC) new Global Trade Repository (GTR) for over-the-counter (OTC) interest rate derivatives.
http://jlne.ws/y5uCXV
Number of the Week: When Will Fed Raise Rates?
WSJ.com
The number of months the Federal Reserve has kept rates near zero. The Federal Reserve gives its latest signal next week on when it plans to raise rates from historic lows. The only thing we know for sure is that it won’t be any time soon.
http://jlne.ws/wKdaly
Economists see growth slowing, recession risk falling
USA Today
The U.S. economy's growth will slow this year after a blast of stronger growth in late 2011, leaving the 8.5% unemployment rate about where it is now on Election Day, according to USA TODAY's quarterly survey of economists.
http://jlne.ws/A4CFu7
MOODY'S: Odds Of A Greek Debt Default Disaster And Exit From The Euro Are On The Rise
Business Insider
Moody's downgraded five Greek covered bond transactions today, amid ongoing tensions over private sector involvement in an orderly default that needs to take place by late March.
http://jlne.ws/yQk1F6
Goldman: U.S. Data May Look Better Than They Are
Bloomberg
A decline in unemployment and pickup in manufacturing point to accelerating U.S. growth. Some economists say the numbers may not be as good as they look.
http://jlne.ws/yDjT6n
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