bank
Page: 2
FILE PHOTO: The logo of Uber is pictured during the presentation of their new security measures in Mexico City, Mexico April 10, 2018. REUTERS/Ginnette Riquelme
April 26, 2019
By Julia Love and Noe Torres
MEXICO CITY (Reuters) – Uber, Didi Chuxing and other ride-hailing firms on Thursday criticized a host of new regulations of the sector in Mexico’s capital city, which include a ban on cash fares that could exclude many potential customers who lack bank accounts.
Mexico City’s government on Wednesday issued rules that prohibit cash payments for ride-hailing services, require drivers to register with the city, and ban the use of cheaper cars, among other measures.
The regulation marks a setback for San Francisco-based Uber in one of its largest markets ahead of a planned initial public offering. The company has fought hard for the right to accept cash fares in Mexico, arguing that it is a critical tool to reach the millions of Mexicans who do not use credit or debit cards.
In a joint statement, Uber, China’s Didi, Spain’s Cabify and Greece’s Beat said Mexico City’s government agreed in February to work with the sector as it updated regulation. But the new rules were issued “unilaterally and without prior dialogue,” the firms said.
“We are concerned that, as it stands, this reform creates a series of barriers to entry,” the companies said in a joint statement, which was also signed by Estonia’s Bolt and Mexico’s Laudrive. They also noted that drivers could see a hit to their earnings.
Mexico City’s transport ministry did not immediately respond to a request for comment. Minister Andres Lajous told a news conference that the rules were aimed at rooting out corruption and leveling the playing field for ride-hailing firms and taxi drivers.
The regulation also prohibits pre-paid cards, which are frequently used by tech companies in Mexico to reach customers who do not have credit or debit cards.
Uber began accepting cash in Mexico City last year after Mexico’s Supreme Court struck down a ban on cash fares in the western state of Colima.
Uber said in a separate statement on Wednesday that the Mexico City regulation contradicts the Supreme Court’s decision, which it argues should be used as a precedent nationwide.
(Reporting by Julia Love and Noe Torres, Editing by Rosalba O’Brien)
Source: OANN
The main entrance of France’s National School of Administration, ENA, (Ecole Nationale d’Administration) is seen in Strasbourg, France April 24, 2019. REUTERS/Vincent Kessler
April 25, 2019
By Richard Lough
PARIS (Reuters) – The Ecole Nationale d’Administration has for decades churned out presidents, ambassadors and industry leaders but on Thursday, President Emmanuel Macron said he would abolish what has become a symbol of inequality in his drive for a fairer society.
“To carry this reform we need to put an end to the ENA,” Macron said as he outlined his response to months of protests in part against elitism in the political establishment.
“This is not about saying the ENA is a bad thing, quite the contrary. This is about ambitious reform, we need to build something that works better.”
The president’s eye-catching move against his own prestigious alma mater will please those who consider the ENA an emblem of the tight-knit club that dominates political and business circles and rile others who see a cynical gesture that fails to address the causes of France’s social imbalances.
“If you keep the same structures, habits are too strong,” Macron said as he sought to calm a five-month street revolt that has derailed his economic reforms and challenged his authority.
The postgraduate school was founded in 1945 by Charles de Gaulle to train a postwar administrative elite drawn from across all social classes. With time, however, it earned a reputation as out of touch and catering to privileged students from the upper social echelons and struggled to modernize its image.
Four modern-day presidents and seven prime ministers are Enarques, as the school’s alumni are known. So too are the chief executives of telecoms group Orange, Societe Generale bank and the former boss of insurer AXA.
The flagbearer of Macron’s European election campaign, Nathalie Loiseau, is a past director of the school and the president said France needed to change the way senior civil servants are recruited, trained and their careers are managed.
The growing tendency for Enarques to move back and forth between the public and private sector has only deepened the public perception of a distant, incestuous old boy’s network.
ELITISM
“The ENA has come to symbolize exactly that which so many French people loathe: elitism,” Alain Klarsfeld, a professor at the Toulouse Business School, wrote in a column in Le Monde.
Macron is not the first French leader to talk about either abolishing the ENA or narrowing the wide gulf between France’s grandes ecoles like the ENA and its public universities.
With the education system already skewed, Nicolas Sarkozy tried to modernize the ENA by broadening the school’s socio-economic in-take and sought to scrap the ‘classement’ system that allows each year’s top 15 achievers to cherry pick the most prestigious posts. He failed.
“There are two types of Enarques: the top 15 and then the rest,” said historian Marc-Olivier Baruch, who studied at the ENA nearly 40 years ago. “The top 15 know they will be the bosses of the rest, and the rest know they will obey the 15.”
Shutting down the ENA is unlikely to solve France’s two-tier education system, as students continue to pass through other grandes ecoles – highly competitive institutions that sit apart from the broader university system.
Asked how far abolishing the ENA would appease yellow vest protesters, Baruch said: “They won’t give a damn.”
Macron’s plans for ENA leaked after a fire ripped through Notre-Dame de Paris cathedral, forcing the president to delay his long-awaited policy announcements and prompting a robust defense of the school from ENA director Patrick Gerard.
“No, ENA students are not cut off from the realities of their time,” Gerard wrote in Le Figaro. “No, ENA students are not in their own little bubble.”
(Additional reporting by Michel Rose, Writing by Richard Lough; Editing by Leigh Thomas, William Maclean)
Source: OANN
FILE PHOTO: Japanese Finance Minister Taro Aso holds a news conference after the G-20 Finance Ministers and Central Bank Governors’ meeting at the IMF and World Bank’s 2019 Annual Spring Meetings, in Washington, April 12, 2019. REUTERS/James Lawler Duggan
April 25, 2019
WASHINGTON (Reuters) – Japanese Finance Minister Taro Aso said on Thursday he told U.S. Treasury Secretary Steven Mnuchin that Tokyo cannot accept discussions that link monetary policy to trade issues, Jiji news agency reported.
Aso also said the two sides agreed that exchange-rate matters would be discussed between financial authorities, and that Tokyo and Washington should not talk about currency issues in the context of the trade debate, according to Jiji.
Aso and Mnuchin held a bilateral meeting in Washington ahead of a summit between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump later this week.
(Reporting by David Lawder and Jason Lange in Washington, Leika Kihara in Tokyo; Editing by Chizu Nomiyama)
Source: OANN
Larry Kudlow, the director of the National Economic Council, told Newsmax TV in an exclusive interview that Federal Reserve Board candidate Stephen Moore has no plans to withdraw his name despite outside pressure.
Kudlow sat down with Newsmax CEO Chris Ruddy at the White House Thursday and said Moore, whose past comments about women have been recently unearthed, continues to be vetted.
From the White House — Larry Kudlow, director of the National Economic Council, sits down with Newsmax CEO Chris Ruddy to discuss the state of our economy, Trump’s agenda, and threat of socialism. See Larry with Chris on Newsmax TV Thursday at 6PM & 9PM ET via Directv 349, Xfinity 1115, Dish 216, Uverse 1220, Fios 615, Spectrum (see channels), or More Info Here
“Steve’s gonna hang in there. He’s gonna hang in there,” Kudlow said.
“Steve is staying on as a candidate. He is being vetted through our process with the FBI and so forth. Then he’ll go through his Senate Banking Committee hearings.”
Earlier this week, Kudlow insisted the White House is still behind Moore’s candidacy for the Federal Reserve Board.
During his interview with Ruddy, Kudlow said he and others have been interviewing other candidates for the Fed, now that Herman Cain has withdrawn his name from consideration.
Cain, Kudlow said, decided to pull out of contention for the Fed seat because of “personal, financial reasons.”
It had been reported that Cain dropped out of the 2012 race for president over allegations of sexual harassment and infidelity. Cain, a former CEO of Godfather’s Pizza who served as chair of the Federal Reserve Bank of Kansas City in the mid-1990s, denied the allegations.
“Herman Cain was qualified as a successful businessman, as the chairman of the Federal Reserve Bank of Kansas City,” Kudlow told Ruddy. “Herman had some issues in his presidential campaign. That seems to have been the problem. A bunch of Republican senators said they wouldn’t vote for him now.”
Among the Republicans who said they would not vote Cain onto the Fed were Mitt Romney, R-Utah; Lisa Murkowski, R-Alaska; and Kevin Cramer, R-N.D.
“I think if he had stayed in, he could have turned around those senators,” Kudlow said. “But he chose to withdraw because of personal, financial reasons. He didn’t want to give up some radio and TV and so forth. I get that.”
On the larger issue of whether President Donald Trump has the right to criticize the Fed, which he has done on multiple occasions because of rate hikes last year, Kudlow said presidents are allowed to have and vocalize an opinion.
“People are all up in arms because the president dares to talk about the Fed. And I just think that’s wrong,” Kudlow said. “He’s not trying to end the Fed’s independence, he’s not storming the walls, but he has opinions. And he’s the president of the United States, he appoints the members to the Fed.
“So my take has been recognizing Fed independence, why shouldn’t the president have opinions? By the way, past presidents have too.”
From the White House — Larry Kudlow, director of the National Economic Council, sits down with Newsmax CEO Chris Ruddy to discuss the state of our economy, Trump’s agenda, and threat of socialism. See Larry with Chris on Newsmax TV Thursday at 6PM & 9PM ET via Directv 349, Xfinity 1115, Dish 216, Uverse 1220, Fios 615, Spectrum (see channels), or More Info Here
Source: NewsMax Politics
FILE PHOTO: The logo of Dow Jones Industrial Average stock market index listed company Goldman Sachs (GS) is seen on the clothing of a trader working at the Goldman Sachs stall on the floor of the New York Stock Exchange, United States April 16, 2012. REUTERS/Brendan McDermid
April 25, 2019
By Elizabeth Dilts
NEW YORK (Reuters) – Goldman Sachs Group Inc is expanding a financial advisory service for top executives to target millions of other affluent employees at some of the biggest U.S. companies, as it seeks to build its retail and wealth management businesses.
Goldman’s Ayco unit provides high-end tax and wealth advice to top executives at some 400 companies, including 60 Fortune 100 companies. According to the bank’s estimates these firms employ at least 8 million people and Goldman now wants them as clients, too.
Goldman began rolling out a new Ayco personal finance website for rank-and-file workers in October and has so far signed up 70 companies. By the end of 2019, the bank hopes to have signed up around 100 companies, which employ 2 million employees, Larry Restieri, the unit’s chief executive, said in an interview this month.
In recent weeks, it has also started pitching high-yield savings accounts and personal loans from its online bank Marcus through the Ayco website, Restieri added.
The rollout is the latest effort of the Wall Street trading and advisory firm to reposition itself as a traditional bank.
Goldman seeks to reach a wider customer base. Its trading business has been shrinking. In the first quarter, the bank’s corporate clients helped it grow mergers and acquisitions revenue but overall revenue slumped.
Chief Executive David Solomon must deliver on a target of $5 billion in new annual revenue by 2020 or risk getting squeezed by rival behemoths like JPMorgan Chase & Co and Bank of America Corp . [https://tmsnrt.rs/2H81K9a]
The bank took its first step toward that goal with the creation of Marcus in 2016. In March, Goldman announced a co-branded credit card with Apple Inc, which will connect it to hundreds of millions of iPhone users.
Expanding Ayco is the next step into the $9 trillion U.S. mass affluent customer market and offers the bank an opportunity to gain new clients cheaply.
The primary cost to the bank – developing the online platform – will be offset by fees companies will pay to offer the service to their workers, Goldman executives said.
Some investors fret Goldman is expanding into an area where it has little experience. They worry the bank is making $40,000 personal loans and extending credit card debt to iPhone users when the economy is showing signs of slowing.
Goldman thinks otherwise. Executives there say the Ayco expansion is part of a bigger plan, culminating with the launch of a retail wealth management offering later this year.
Restieri said it is too early to put numbers on the contribution the expanded Ayco could make toward Goldman’s $5 billion goal.
In November, the bank said that it was halfway toward meeting that target and that Ayco, along with private wealth management and asset management, had so far contributed $400 million.
ONLINE QUESTIONNAIRE
Ayco’s website, called Financial Wellness, starts with an online questionnaire. Employees of corporate clients such as Google’s parent Alphabet Inc answer questions like, “Do you generally live within your means?” and “Do you have an emergency fund?”
After workers answer questions about their savings, credit card debt, student loans and other finances, Ayco offers what it calls solutions such as Marcus savings accounts, personal loans or products from other financial institutions.
Adoption rates are a question. One company that offered a financial incentive got as much as 60 percent of its employees to use Financial Wellness. Others have seen lower pick-up rates.
But as Ayco rolls out its mass-market offering, Restieri thinks it will benefit from brand cachet of having already served the bosses.
“When this offering is presented to employees, the top C-suite of those companies would have already been using us for 10-15 years,” Restieri said.
(Reporting By Elizabeth Dilts; editing by Neal Templin and Paritosh Bansal)
Source: OANN
FILE PHOTO: Volodymyr Zelenskiy, Ukrainian comedian and candidate in the upcoming presidential election, hosts a comedy show at a concert hall in Brovary, Ukraine March 29, 2019. REUTERS/Valentyn Ogirenko/File Photo
April 25, 2019
KIEV (Reuters) – Ukraine’s president-elect Volodymyr Zelenskiy, keen to build parliamentary support, said on Thursday the election commission was preventing him from calling a snap parliamentary election by delaying the announcement of his election victory.
Zelenskiy won by a landslide in last Sunday’s presidential election but he has no lawmakers in parliament. Calling a snap election could help his new party win seats while his popularity is high.
But he has only a limited time in which to call a snap election: He can do so only after the election commission has officially declared his election win, but no later than six months before the next scheduled parliamentary election, which is due in late October.
“There is victory, but no authority,” Zelenskiy said in a video posted on social media.
The central commission delayed the announcement of the official results, in order to delay his inauguration beyond May 27, he said. “Why? So that President Zelenskiy does not even have the opportunity to think about the dissolution of the Verkhovna Rada (parliament),” he said.
An election commission spokesman declined immediate comment but on Tuesday the deputy head of the commission said the result would be declared on April 30, ahead of its official deadline.
Zelenskiy is expected to take power within weeks. His ability to work with parliament will be crucial to meeting the expectations of his voters and passing reforms to keep foreign aid flowing.
Zelenskiy’s powers will include appointing the head of the state security service, the head of the military, the general prosecutor, the central bank governor and the foreign and defense ministers.
But parliament must confirm each appointment. Zelenskiy also needs lawmakers to pass legislation that matters to the International Monetary Fund, Ukraine’s most important foreign backer, such as a bill to criminalize illegal enrichment.
(Reporting by Natalia Zinets; writing by Matthias Williams, Editing by William Maclean)
Source: OANN
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 23, 2019. REUTERS/Brendan McDermid
April 25, 2019
By Trevor Hunnicutt
NEW YORK (Reuters) – After months of handwringing about the possible crash-landing of the housing market, investors awaiting quarterly earnings from No. 3 U.S. homebuilder PulteGroup Inc this week were ready for the worst.
Their trepidation was justified. New home sales across the country had fallen for three consecutive quarters to close out 2018. Housing stood out as a particularly dark spot among several key sectors of the American economy showing signs of fatigue by the end of last year, giving rise to worries about recession.
Instead, Pulte delivered something unexpected: optimism.
“2019 can turn out to be a good year for the housing industry,” Chief Executive Ryan Marshall said on a conference call. Historic lows in unemployment are “allowing for some wage inflation and continued high consumer confidence,” he said.
Marshall’s renewed confidence was backed up by government data that same day showing new home sales rose nearly 15% in the first three months of the year, the strongest quarter in six years.
And it’s not just the housing market looking up.
Across industries from soda-pop to bulldozers and software to social media, companies are delivering results that suggest the U.S. economy might not be all that bad.
Beyond PulteGroup, scores of companies are beating Wall Street’s forecasts for the first quarter, including beverage maker Coca-Cola Co, heavy-machinery manufacturer Caterpillar Inc, software maker Microsoft Corp and social media platform Twitter Inc, each representing a distinct slice of the economy.
That resilience may be further confirmed on Friday when the Commerce Department releases its first reading of gross domestic product (GDP) for January through March, which just six weeks ago appeared headed for stall speed but has gathered pace since.
Indeed, in the first days of 2019 the odds looked stacked against the U.S. economy, with a partial government shutdown, fallout from tariffs and trade uncertainty, a strong dollar, frigid weather that kept consumers indoors, wild-swinging stock markets late last year and a diminishing boost from tax cuts.
“It looked like we were heading for a very, very poor quarter,” after weak numbers on retail sales earlier this year, said Brian Rose, senior Americas economist at UBS Global Wealth Management’s Chief Investment Office.
From the second half of the quarter, however, job and wage gains as well as retail sales figures have shown improvement.
RECESSION? WHAT RECESSION?
What a difference a month makes. In mid-March, Wall Street analysts were fretting about an imminent profits recession, and some economists worried an economic recession might follow in its wake.
Profits at S&P 500 companies, seen declining for the first time in three years just a month ago, now appear on course for another quarter of growth as first-quarter results pour in, according to I/B/E/S data from Refinitiv.
This is the first quarter in more than a year when investors are poised to get a real view of Corporate America’s strength because so much of last year’s earnings growth came from a major business tax cut. A year ago, S&P 500 profits grew 26.6% year-over-year, and at present this year’s first-quarter earnings are forecast to be flat, although profits among companies that have reported so far are up 7.1%.
That improvement is matched by measures tracking the wider economy.
As recently as March, the Federal Reserve Bank of Atlanta’s widely followed GDP Now model predicted a barely positive reading of first-quarter GDP. Now it forecasts 2.7% annualized growth and the consensus estimate in a Reuters poll calls for 2.0%. Growth clocked in a 2.2% in the fourth quarter.
For the moment at least, fears about the economy so intense that they triggered an end to rate hikes by the Federal Reserve now seem to be unfounded. The Fed’s rate-hike holiday, confirmed after their March policy meeting, has helped keep the pressure off debt-dependent sectors.
Consumers have also weathered the storm. A competitive job market helped lift a key benchmark of private-sector wages 3.2% over the last year, the strongest in a decade, Labor Department data shows. That helped keep demand robust for consumer goods and services, and companies in those areas posted better revenues in the first quarter.
Certainly some risks remain in place.
Any collapse in U.S.-China trade talks that leads to an escalation of tariffs could end the relief surrounding the economy, according to Tony Roth, Chief Investment Officer for Wilmington Trust Investment Advisors Inc.
“I don’t think China or the U.S. can afford to not get a deal done,” he said. “If they don’t get a deal done with China – to the point where there’s additional tariffs that come on – that would be catastrophic for markets.”
And with profits growing more slowly, companies may struggle to justify further spending and investment, especially as margins come under pressure from higher wages and other costs.
Still, the resilience of the American job market, with unemployment near a 50-year low, is providing a strong foundation for continued growth in consumer spending, the engine that accounts for two-thirds of U.S. economic activity.
“If you want to look at the consumer,” said Rose, the UBS economist, “the most important fundamental is the labor market, which is very strong.”
(Reporting by Trevor Hunnicutt; Editing by Dan Burns and Susan Thomas)
Source: OANN
The Reserve Bank of India has jumped on the gold bandwagon.
Since December 2017, the Indian central bank has added 50.4 tons of gold to its reserves.
India bought 8.2 tons of gold in January and February of this year and analysts project that pace to pick up. Economist Howie Lee told Bloomberg he expects the RSB to add as much as 1.5 million ounces of gold to its reserves in 2019. That comes to about 46.7 tons.
India’s gold reserves currently stand at a record high of almost 609 tons, according to data from the IMF.
Indians traditionally have a strong affinity for gold. While Americans generally think of gold as a luxury item, many Indians view it as a necessity. In the Asian nation, buying gold is not just for the rich. In fact, a recent survey shows that possessing the yellow metal is a universal phenomenon across all income classes in India. But the Indian central bank hasn’t added a significant amount of gold to its reserves since 2009. That year, the RBI bought 200 tons of gold from the IMF.
Gerald Celente breaks down what’s ahead as the Federal Reserve crashes the debt & real estate bubble it created worldwide.
Why have Indians suddenly turned to gold? According to an article at The Hindu BusinessLine, the motivation is much the same as in countries like Russia and China. The Indians want to minimize exposure to the US dollar.
“There is a definite pattern apparent in the countries that are leading this central bank gold hunt. Countries with a strong anti-American sentiment, that wish to reduce their dependence on the US dollar, top the list of nations that have been adding gold to their forex reserves in the last few years.”
Through the first quarter of this year, Russia has increased its gold hoard by 56 tons. This continued a 2018 trend. Russia has been endeavoring to reduce its exposure to the dollar over the last several years by buying gold and selling off US Treasurys. Russian gold reserves increased 274.3 tons in 2018, marking the fourth consecutive year of plus-200 ton growth. In February 2018, Russia passed China to become the world’s fifth-largest gold-holding country. Over the last decade, Russia has quadrupled its bullion reserves.
The Central Bank of China has also been adding to its official gold reserves over the last several months. China bought gold for the fourth straight month in March, adding another 11.2 tons of the yellow metal to its reserves.
In total, the world’s central banks accumulated 651.5 tons of gold last year. The World Gold Council noted that 2018 ranked as the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record. That trend appears to have continued into 2019 with central banks globally adding 90 tons of gold in the first two months of this year.
According to The Hindu BusinessLine, US policy and growing wariness of the dollar has also motivated India to jump on the gold bandwagon.
“It is obvious that the trade war unleashed by the US has made emerging economies, including India, nervous about future policies of the US government. The clear anti-globalization stand taken by the current US government, and the scant respect displayed for policies that promote peace and inclusive growth have made it imperative to reduce dependence on the US currency; that can turn volatile in tandem with the policies of the government. The mounting debt in the US and unbridled printing of notes for successive quantitative easing programmes since 2009 have also eroded the intrinsic worth of the dollar significantly.”
As The Hindu BusinessLine article points out, individual investors should take note of these central banks buying gold.
“It signals that gold retains its position as a premier store of value. An asset that is a store of value is one which is expected to retain its purchasing power in the future.”
On his way to bullhorn the White House, Alex Jones bumped into Max Keiser.
Source: InfoWars
Month after month, the Trump administration runs multi-billion dollar deficits. The national debt has ballooned to over $22 trillion. According to the most recent Treasury Report, the US has a net worth of negative $21.5 trillion. And this understates the problem.
As Wolf Richter of WolfStreet puts it, the US government has “debt out the wazoo.”
Is this sustainable?
In a recent WolfStreet report, Wolf analyzes the debt, who is buying it and why.
Wolf points out that few countries are in worse fiscal shape than the US. America is in the same situation as countries like Japan, Greece and Italy.
The US and Japan have one advantage over Greece, Italy and some other nations because they control their own currency. That means their central banks can simply print money to buy government debt.
The Bank of Japan continues to monetize its government’s debt, but over the last year, the Federal Reserve has not been buying US Treasurys. This may change soon with the end of the Fed’s balance sheet reduction program, but currently, the central bank is not propping up America’s spending binge. So, who is buying all of this debt?
And why?
Foreign investors hold $6.4 trillion in US Treasury debt. China and Japan rank as the largest foreign holders.
The Fed holds about $2.1 trillion in US debt.
US investors and institutions hold about 7.7 trillion – by far the largest category.
US government entities, such as pension funds and the Social Security Trust Fund hold nearly $6 trillion in Treasurys. Some argue this is money “we owe ourselves” so it cancels out. Wolf called this baloney.
“This money is owed to those beneficiaries and it doesn’t cancel out. It is a real debt that the US government owes and it has to pay.”
China’s holdings of US Treasurys are down about $46 billion from a year ago. In total, China and Japan’s combined hold about 10% of US debt. That’s down from a little over 11% in 2017.
Over the last 12 months, foreign investors added about $164 billion in US debt as the Federal Reserve shed around $250 billion. US government entities added $160 billion in Treasury holdings. That totals a net increase of $45 billion.
That means that US investors have taken on the bulk of US government debt – in the neighborhood of $1.2 trillion over the last 12 months.
Wolf points out that banks are aggressively trying to attract depositors and are competing with the federal government which has to fund its deficits. With interest rates so low, US bonds are actually an attractive place to stash cash.
“Two-point-four percent 20 years ago would have been a ludicrously low amount of interest to be attractive, but these days are not normal and 2.4% is a fairly attractive number.”
On top of that, there is a great deal of dividend risk in the stock market with so many companies overvalued. Wolf points to GE as one example of a company that has slashed dividends to close to zero.
Wolf says that the trillions of dollars of additional Treasurys the US government is throwing on the market just doesn’t seem to matter to US investors – at least at this moment.
The $64,000 question is how long can this last?
It doesn’t seem like a sustainable scenario. Right now, things appear pretty rosy. It’s a primrose path of debt, that while perhaps troubling on a theoretical level, isn’t really having any actual impact on the economy. But it seems likely at some point the oversupply of Treasurys will begin to swamp demand. When that happens, the US government will have a real problem.
Who will take up the slack?
If you look at who owns US debt, there is really only one viable option – the Federal Reserve. Practically speaking, this means more quantitative easing.
If demand for Treasurys starts to fall, that will push interest rates higher. This is a simple supply and demand function. The Fed will then face two choices.
- Intervene with interest rates cuts and more QE. In other words more inflation.
- Do nothing and let interest rates spike.
No. 2 would not bode well for an economy built on debt. The Sovereign Man summed up the implications.
“Make no mistake: higher interest rates will have an enormous impact on just about EVERYTHING. Many major asset prices tend to fall when interest rates rise. Rising rates mean that it costs more money for companies to borrow, reducing their leverage and overall profitability. So stock prices typically fall. It’s also important to note that, over the last several years when interest rates were basically ZERO, companies borrowed vast sums of money at almost no cost to buy back their own stock. They were essentially using record low-interest rates to artificially inflate their share prices. Those days are rapidly coming to an end.”
The bottom line is that the US federal government is on an unsustainable path.
Patrick Casey, head of the American Identity Movement, joins Owen Shroyer live via Skype to discuss how his team planned and executed their infiltration into a drag queen story time event.
Source: InfoWars
FILE PHOTO: The company logo of the Bank of America and Merrill Lynch is displayed at its office in Hong Kong March 8, 2013. REUTERS/Bobby Yip/File Photo
April 25, 2019
NEW YORK (Reuters) – The U.S. Treasury Department may float the idea of reducing the issuance of coupon-bearing debt at its upcoming May refunding after the Federal Reserve’s decision to end its balance sheet normalization later this year, Bank of America Merrill Lynch analysts said.
Any cuts in issuance will likely be among two-year, three-year and five-year maturities, where the Treasury has ramped up issuance to fund the widening of the federal deficit, Bank of America strategists Mark Cabana and Olivia Lima said.
“We expect the idea of coupon cuts to be discussed at the May refunding as the Fed’s decision to end their (balance sheet) unwind in (September) was likely earlier than (the Treasury) anticipated,” they wrote in a research note.
The issuance reductions could be up to $4 billion for each of these maturities, they said.
They said any decision on issuance changes will likely be announced at Treasury’s August refunding.
(Reporting by Richard Leong; editing by Jonathan Oatis)
Source: OANN
MAGA One Radio