Have central banks been breaking the law? - (www.telegraph.co.uk) Quantitative
easing has had a reverse Robin Hood-type effect by robbing from the poor and
giving to the rich. The best way to destroy the capitalist system, the Russian
revolutionary leader Vladimir Lenin is reputed to have said, is to debauch the
currency. The world’s major central banks have certainly been having a fair old
go at it. In the six years since the financial crisis first broke, they’ve been
printing money like there is no tomorrow. Fortunately, they have not yet
managed to bring down the free market system. On the other hand, they have
succeeded in putting a rocket under asset prices and, in so doing, they have
greatly exaggerated the wealth divide. In a number of cases, including the US
and the UK, they have also significantly assisted governments in financing
burgeoning fiscal deficits. To the extent that quantitative easing (QE) has had
any effect at all, it is asset prices and governments that have been the prime
beneficiaries.
S&P warns Europe debt
market near pre-crash levels - (www.cnbc.com) European
corporate debt markets have become "intoxicated" by monetary stimulus
from central banks and "aggressive" transactions are in danger of
reaching the excesses seen before the global financial crisis, ratings agency
Standard & Poor's has warned. "Artificially low interest rates not
only encourage an inefficient allocation of capital but create the incentive
for excessive speculation in financial markets that ultimately risk doing more
harm than good when boom turns to bust," Credit Analyst Paul Watters
warned in S&P's quarterly European corporate credit outlook on Monday
afternoon. "The greater use of leverage and a growing number of
aggressively structured transactions in the European leveraged finance market
is reminiscent of some of the excesses of the 2006-2007 boom period."
Reports: $180K stolen in
Atlantic City casino heist - (www.cnbc.com) Two
masked thieves stole more than $180,000 from an Atlantic City casino Monday
morning, according to multiple media reports. Police say two suspects entered
Caesars Atlantic City around 6 a.m. and at least one of them pulled out a gun
before stealing two plastic boxes containing more than $180,000 in cash, NBC 10
in Philadelphia reported. The robbers then fled in a car. The New Jersey State
Police Gaming Bureau is investigating the case, indicating the robbery occurred
within the casino, according to the Press of Atlantic City. City police deal
with matters related to the hotel and public areas. Trooper Alina Spies
confirmed to USA TODAY that New Jersey State Police were
investigating a robbery of an undisclosed amount from an Atlantic City casino,
but was unable to provide any further information.
[Reuters]
NY Fed found serious problems at Deutsche Bank's U.S. arms: source - (www.reuters.com) The
Federal Reserve Bank of New York has found serious problems in Deutsche Bank
AG's U.S. operations, including shoddy financial reporting, weak technology and
inadequate auditing and oversight, people close to the matter told Reuters. In
a letter to the German lender's executives last December, a senior official
with the New York Fed described financial reports produced by some of the
bank's U.S. divisions as "low quality, inaccurate and unreliable",
said one of the sources, who is familiar with the letter. The New York Fed, as
the U.S. central bank's eyes and ears on Wall Street, directly supervises the
biggest U.S. and foreign banks,
partly through embedded regulators who go to work each day inside the firms.
Puerto
Rico debt crisis headed for U.S.-style bankruptcy resolution - (www.reuters.com) Momentum
is building toward a deal that would make painful losses inevitable for
investors holding about $20 billion in bonds issued by Puerto Rico's highway,
water and electricity authorities even as some big U.S. mutual funds launch a
legal battle to squelch a new law that authorizes a restructuring. The Puerto
Rican government and most of its creditors have hired U.S.-based bankruptcy
experts to advise them through the Caribbean island’s efforts to solve its debt
problem, and the resolution figures to look a lot like a U.S.-style bankruptcy.
The crisis came to a head late last month when Governor Alejandro Garcia
Padilla pushed through the Public Corporations Debt Enforcement and Recovery
Act to create a bankruptcy-like process for restructuring the debt of
commonwealth-run corporations. That’s caused prices on some of the bonds of the
electric utility, known as PREPA, to fall to 40 cents on the dollar or below.
PREPA is widely viewed to be in the weakest condition of the agencies.
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