Salient to Investors: Simon Johnson at MIT Sloan School of Management says: The euro area faces a major economic crisis, most likely a series of rolling, country-specific problems involving some combination of failing banks and sovereigns that can’t pay their debts in full. Expect system wide stress, emergency liquidity loans from the
READ MORE... →Salient to Investors: The Bank for International Settlements said government bonds losing their risk-free status are depriving investors of wealth-preservation opportunities while Europe’s debt crisis boosts demand for havens. The global pool of safer assets has shrunk just as demand has risen due to a flight to safety, leading to a
READ MORE... →Salient to Investors: George Soros said: A failure to produce drastic measures could spell the demise of the Euro. Europe should create a European Fiscal Authority to purchase sovereign debt in return for Italy and Spain implementing achievable budget cuts – funding to come from the sale of European Treasuries, which would
READ MORE... →Salient to Investors: Every measure of risk in the credit markets shows the banks enjoy greater confidence among investors now than before Moody’s downgrades. Richard Bove at Rochdale Securities says Moody’s downgrading the debt of companies that investors want to buy is the most obscene act he’s ever seen by a major institution. Money managers
READ MORE... →Salient to Investors: Ian Lyngen at CRT Capital Group said we are back in a risk-off mode until there is a reason not to be, and the market is stepping back from any meaningful expectation for anything from the summit. Benchmark notes are trading at almost the most expensive level ever. Treasuries beat
READ MORE... →Predictions: Bill Gross warned that risk markets are vulnerable as the monetary bag of tricks empties. Gross prefers U.S., Mexico and Brazil debt with intermediate maturities over the next few years, and stocks in companies that produce stable cash flow in high growth markets. Gross increased the proportion of U.S. government and Treasury debt in the
READ MORE... →Salient to Investors: Downgrades of 15 global banks by Moody’s Investors Service were met instead by rallies in stocks and bonds. Gerard Cassidy at RBC Capital Markets said American banks are stronger than three years ago, and market prices have long reflected concerns raised by Moody’s. Moody’s announced on Feb. 15 that it was reviewing the
READ MORE... →Salient to Investors: Investor Jim Pogoda said just extending Operation Twist was seen as not enough to keep positive momentum in gold, which will attract some safe haven investment as the focus turn quickly back to debt troubles in Europe. Nick Moore at Royal Bank of Scotland Group said global financial market risks abound and
READ MORE... →Salient to Investors: Fifty-eight percent of economists polled by Bloomberg expect the Fed to expand Operation Twist today. Sixty percent said the Fed won’t start QE3. Josh Feinman of DB Advisors says extending Operation Twist is the path of least resistance. Stuart Hoffman of PNC Financial Services Group says the economy needs monetary stimulus, though QE3 is a
READ MORE... →Salient to Investors: U.S. crude stockpiles rose to highest level since July 1990. Predictions: Todd Horwitz at Adam Mesh Trading Group sees below $80 in the next two weeks. Fifty-eight percent of economists polled expect the Fed to expand Operation Twist. Read the full article at http://www.bloomberg.com/news/2012-06-20/oil-declines-before-fed-decision-projected-supply-drop.html
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