Posts filed under “Credit”

Look Out Below, Chinese Ted Spread Edition

Equity futures are under pressure this morning as concerns about a shadow-banking credit crunch in China increase. A Chinese credit-market risk gauge is hitting new highs amid growing concerns that leverage and credit risk have reached unsustainable levels.

Observers are comparing this to the widening in the Ted spread — a measure of risk in certain eurodollar securities compared with Treasuries — in 2007, which turned out to be a key precursor to the financial crisis. The comparison to the U.S. financial crisis was first observed last June, if not earlier. Goldman Sachs Group Inc. has noted that China’s “bond market has grown from virtually nonexistent into one of the world’s largest.” As of the end of 2013, local government debt had “swollen to 17.9 trillion yuan ($2.95 trillion), underscoring risks to the financial system.”

Continues here

Category: Credit, Markets, Trading

Household Risk Management and Actual Mortgage Choice in the Euro Area

Category: Credit, Think Tank

European Debt Crisis: Visualized

Bloomberg’s ace data visualization team crushes it again; this is an awesome primer:

At the heart of the European debt crisis is the euro, the currency that ties together 17 countries in an intimate manner. So when one country teeters on the brink of financial collapse, the entire continent is at risk. How did such a flawed system come to be? Bloomberg Television and Jonathan Jarvis present “The European Debt Crisis Visualized.”

Source: Bloomberg, Feb. 12 2014

Category: Credit, Currency, Digital Media, Video

More on Puerto Rico Debt

More on Puerto Rico Debt David R. Kotok Cumberland February 9, 2014     IRS Notice 2011-29 & Puerto Rico: An as-yet legally untested US tax credit for the excise tax US multinational companies pay to Puerto Rico essentially functions as a form of ongoing back-door financial aid to the economically distressed Commonwealth. To delve…Read More

Category: Credit, Think Tank

Bank Lending Channels During the Great Recession

Category: Credit, Think Tank

Cash Purchases Spike as Interest Rates Rise

Source: RealtyTrac   The chart above comes form the RealtyTrac Residential & Foreclosure Sales Report. It should come as no surprise that as rates rise, so too do all-cash purchases. There are a few significant factors worth noting: 1) Last year, institutional investor purchases for residential properties (single family homes, condominiums and townhomes) accounted for…Read More

Category: Credit, Fixed Income/Interest Rates, Real Estate

Economic Indicators Dashboard

Click for an interactive graphic. Source: Russell Investments

Category: Consumer Spending, Credit, Economy, Employment, Fixed Income/Interest Rates, Markets

Category: Bailouts, Credit, Think Tank

Tracking Recent Levels of Financial Stress

Tracking Recent Levels of Financial Stress Amanda Janosko Federal Reserve Bank of Cleveland 01.17.14     The Cleveland Financial Stress Index (CFSI) has trended down throughout the fourth quarter of 2013 and early this year, indicating a reduction in the level of stress in the US financial system. During the federal government shutdown in October…Read More

Category: Bailouts, Credit, Federal Reserve, Think Tank

Why Do Banks Feel Discount Window Stigma?

Why Do Banks Feel Discount Window Stigma? Olivier Armantier Liberty Street Economics January 15, 2014     Even when banks face acute liquidity shortages, they often appear reluctant to borrow at the New York Fed’s discount window (DW) out of concern that such borrowing may be interpreted as a sign of financial weakness. This phenomenon…Read More

Category: Credit, Regulation, Think Tank