Diamond News Archives
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By Pam Martens and Russ Martens: December 4, 2019 ~
Federal Reserve Building in Washington, D.C.
The titular head of bank supervision for the Federal Reserve is Randal Quarles. We use the term, titular, because the job was so amorphous that President Obama never bothered to fill the slot, even though it was legally mandated under the Dodd-Frank financial reform legislation of 2010. Everyone on Wall Street knows that it’s the all-powerful New York Fed that “supervises” the behemoth banks on Wall Street[1].
Last week New York Times’ reporter Jeanna Smialek accurately summed up the real job of Randal Quarles, writing this[2]: “In his first 21 months on the job, Randal K. Quarles, the Federal Reserve’s vice chairman for supervision and regulation, met at least 22 times with partners at his former law firm, Davis Polk & Wardwell, which represents many of the nation’s largest banks.” Later in the article, Smialek adds this: “He has talked with Davis Polk more often than other law firms, but executives from Goldman Sachs and JPMorgan have also met with him about 20 times each.”
Today, Quarles will be probed on his supervisory work by the House Financial Services Committee. The questioning comes at a time when the Federal Reserve has authorized its New York Fed branch to pump hundreds of billions of dollars each week into the coffers of Wall Street’s trading houses, the first such loans since the financial crisis.
The Fed first tried to justify the loans by saying they were a short-term measure to stem a liquidity crisis. But the so-called “liquidity crisis” has not prevented the stock market from setting new highs since the loan operations began on September 17. And the...
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(IDEX Online) - After battling power interruptions, Firestone Diamonds plc has announced that stable grid power restored at its Liqhobong mine, allowing it to operate at full capacity again.
Production at Liqhobong was affected by a two-month planned shutdown of the Lesotho Electricity Company's Muela Hydropower Station.
To minimize disruption at the mine, Firestone commissioned diesel generators. These generators have allowed the operating plant to run at 80-90-percent capacity.
The company has reported that the costs associated with operating the rented diesel generators during this period were approximately $1.1 million. Firestone is compiling an insurance claim for the loss of profit and the additional operating costs caused by the shutdown.
Firestone holds a 75-share in Liqhobong mine. The government of Lesotho owns the remaining 25 percent....
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Jan-Pieter Jansen, a 77-year-old retiree from the Netherlands, had high hopes for a worry-free retirement after having saved diligently into a pension during his working life.
But Jansen, a former manager in the metal industry, has been forced to reappraise his plans after receiving notice from his retirement scheme, one of the Netherlands’ biggest industry-sector funds, of plans to cut his pension by up to 10%. Understandably, the news has hit like a sledgehammer.
“This is causing me a lot of stress,” says Jansen, who retired 17 years ago and hoped to use his pension pot to treat his grandchildren and afford good hotels on holidays. “The cuts to my pension will mean thousands of euros less that I can spend on the family and the holidays we like. I’m very angry that this is happening after I saved for so long.”
Jansen is not alone in experiencing pension pain. Tens of millions more pensioners and savers around the world are facing the same retirement insecurity, as plunging interest rates since the financial crisis wreak havoc on the funding of schemes. As average life expectancy increases, pensions have become a defining political issue in countries as diverse as Russia, Japan and Brazil.
General Electric, the industrial conglomerate, recently announced that it is joining a growing list of companies that are ending guaranteed “final salary”-style pension schemes, affecting about 20,000 of its employees. In the U.K., tens of thousands of university academics are preparing to take strike action over steep rises in their pension contributions.
A common factor in this global pension upheaval has been suppressed bond yields.
Bonds have historically provided a simple match for the cash flows needed to be paid out to the members of retirement schemes. But decades of...
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confoundedinterest17[1] #bubble[2], Banking[3], Brexit[4], China[5], Economy[6], Fed[7], Inflation[8], SPX[9], Stocks[10], Trade[11], Treasuries[12], Treasury[13], Uncategorized[14], Yield Curve[15] 0 Minutes
It has been the longest bull market in modern history, enabled by massive Central Bank intervention. But with trade wars raging, Brexit, Presidential impeachment over something, etc., there remains a significant risk of a recession over the next 12 months.
If we look at the normalized change in the 10Y-3M curve minus normalized change in 10Y yields, we can see a heightened recession risk.
Lower yields and steeper curves are not a good recipe.
And then we have the decline in S&P 500 earnings estimates.
Recession coming?
Published ...