The FDIC has just released its Quarterly Banking Profile (QBP) for the second quarter of 2010, showing improvement in bank balance sheets since last quarter and at the same point last year.
Under the radar due to other priorities, the Senate has taken up its version of a small business stimulus bill. The bill combines two different small business bills that passed the House last month (one that created a lending fund and one that would provide tax breaks).
The CFR has a paper out called "How Dangerous is US Government Debt?", looking at the possibilities of a spike in interest rates in the future. They noted that there were many domestic factors that pointed to such possibility, and potential volatility with regards to foreign inflows.
Major legislation reforming the financial regulatory process hit a snag today as Senator Scott Brown (R-MA) said he would not support the bill because it relies primarily on a $19 billion levy on large financial institutions and hedge funds to pay for its costs.
Today, Congressional negotiators agreed upon a plan to reform the American financial regulation system—which, if it passes next week, would constitute the “most sweeping set of financial reforms since those that followed the Great Depression,” according to Treasury Secretary Tim Geithner.
On the eve of the G-20 in Toronto this weekend, U.S. financial markets have continued to be dominated by safe haven effects as investors (domestic and foreign) have sought what they consider the safety of Treasury instruments, particularly at the long end of the market. Safe haven effects have been driven by persistent fiscal worries about the eurozone’s ability to manage its fiscal crisis.
Yes, financial markets too are being affected by the World Cup. So far today, trading is quiet – even though today is one of the famous Triple Witching Days (which is not about Harry Potter but the day each quarter when contracts in three main markets must be settled and which are famous for being unpredictable). Sometimes however thin markets can be volatile.
Here are the highlights from this weekend’s editorials on fiscal and budget policy:
As of mid-day Friday, April 30, the government bond market was on track to have a good week, with prices up (and therefore yields down, because they move in opposite directions).
According to the financial press, a key driver was end of the month effects (managers needed to buy newly auctioned Treasury instruments, to close the loop on their monthly portfolio strategies).
Safe haven effects from the sovereign debt crisis in Greece were also thought to increase demand for U.S. Treasury instruments.
