Friday, September 07, 2007

"Goldilocks" Reality Check

Maybe yesterdays "surprisingly" (LOL) jobs report is shutting down the folks that are still believing "Goldilocks" is here.......

Evtl. hat ja endlich der gestrige "überraschend" (LOL) schwache Arbeitsmarktbericht den letzten die Augen geöffnet das Ihr optimales Szenario "Goldilocks" ( inflationsfreies Wachstum ) wohl nur ein Wunschtraum bleibt.

I wish everyone a nice weekend

Euch allen ein schönes Wochenende

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Anonymous Anonymous said...

Hi, All the government numbers are lies, the latest jobs report too. The only reason they made it look pathetic is to put pressure on the fed to cut rates. The fed wants the government to do the bail outs and the government wants the fed to do it. They are all dirty. Thanks for the hard work this week. Have a nice weekend jmf!

6:40 AM  
Anonymous Anonymous said...

Fed cutting rates here could result in capital flight, resulting in the very thing the rate cuts are supposed to forestall...

11:27 AM  
Anonymous Anonymous said...

"LEADING bankers are warning of the worst crisis in the money markets for 20 years, which will come to a head this week when $113 billion (£57 billion) of commercial paper – market IOUs – comes up for refinancing.

This huge refinancing, mainly through London, exceeds the $100 billion that became due in mid-August, and which sparked the most serious phase in the money-market crisis, which has seen banks scrambling for funds and market interest rates rising sharply. “This is a serious pressure point,” said one leading banker."

3:04 AM  
Anonymous Anonymous said...

Actually I am a bit sceptical about the CP issue with regards to volume. It is my understanding that over 100bn rolls over every week. So the next week will simply not be an exception.

Turnover is not the issue, it is pricing, the quality and potential liquidity calls.

3:44 PM  
Blogger jmf said...

Credit Market in `Pivotal' Test as $140 Billion of Debt Matures

Sept. 10 (Bloomberg) -- Banks seeking to refinance almost $140 billion of commercial paper by the end of next week are likely to push up yield premiums on corporate bonds, according to Deutsche Bank AG, Germany's biggest bank.

``This could be a pivotal seven to 10 days in this crisis,'' Jim Reid, a credit strategist at Deutsche Bank in London, wrote in a note to investors today. ``This will inevitably lead to wider corporate spreads, especially in high yield as liquidity conditions tighten considerably for these companies.''

Investors are demanding the highest premiums in six years to buy commercial paper, short-term IOUs maturing in 270 days or less, because of concern that funds borrowing in the market face losses from assets related to U.S. subprime mortgages. Banks have to bail out their commercial paper units, known as conduits, if they fail to find buyers for new notes.

The amount of commercial paper coming due will peak on Sept. 17 when the equivalent of $48 billion matures, according to a report by Bank of America Corp. analysts in London led by Raja Visweswaran. The analysts said they expect credit markets to remain ``unsettled'' until then.

``Banks have a very limited appetite to hold bonds on their balance sheets given other, more pressing demands for their capital in the short term,'' Deutsche Bank's Reid said in a telephone interview today.

Almost $60 billion of the commercial paper due this week and next is owed by conduits, according to Reid. Conduits issue commercial paper backed by bonds including asset-backed securities, as well as car loans, mortgages and trade receivables.

2:12 AM  

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