Tuesday, May 17, 2016

Central Banks Are Creating
Massive Distortions In The Financial Markets
"The ECB and BOJ‘s QE programs are causing great distortions in the global bond markets and therefore all technical moves are to be taken with great trepidation for any type of trend. There have been a plethora of articles detailing the ECB‘s impact on corporate bond markets as the beginning of ECB purchases of investment grade corporate bonds in June is creating a rush for multinational corporations to issue euro-denominated bonds. The ECB is pushing all interest rates to levels of zero-priced risks. A couple of weeks ago Unilever was able to sell four-year notes for EIGHT BASIS POINTS. I bring this issue to the fore because it may be a reason for the flattening of the U.S. curve as issuers head to the EU where rates are extremely low and investors are starving for high quality bonds, especially as they have a guaranteed buyer unencumbered by price levels. The ECB has started become the reverse Statue of Liberty when it comes to bond buying. Give me your tired, poor bonds yearning to pay low rates. Regardless, it is important to be aware of the yield curves as a harbinger of problems for the economy .. Central banks have created so much distortion that the market views the FED, ECB and BOJ as lacking credibility."
- Yra Harris
LINK HERE to the commentary


Anonymous said...

17 May 2016
Above the Law: The Age of Impunity

The Age of Impunity
Jeffrey Sachs
May 13, 2016

THE PANAMA PAPERS opened yet another window on the global system of financial corruption, showing how political leaders and businesses use shell companies in secrecy havens like the British Virgin Islands and many US states to evade taxes and hide corruption and other crimes. Yet the system of corruption depends on another factor beyond secrecy, one that is perhaps even more important: impunity. Impunity means that the rich and powerful escape from punishment even when their malfeasance is in full view.

Impunity is epidemic in America. The rich and powerful get away with their heists in broad daylight. When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish “dreamer.” The Journal recently opposed the corruption sentence of former Virginia governor Bob McDonnell for taking large gifts and bestowing official favors — because everybody does it. And one of its columnists praised Panama for facilitating the ability of wealthy individuals to hide their income from “predatory governments” trying to collect taxes. No kidding.

Our major institutions, the ones that should know better, are often gross enablers of impunity...

Read the entire article here.


Anonymous said...

Lending Club & Theranos boards prove big name boards don't do shit, just show up 4 times a year, pass GO, & collect $200k/yr