From: The Market Today Online
1) A Bloomberg report says that banks are increasingly having to consider riskier assets to maintain margins because of the Fed’s activity in their markets. The report says that banks are looking at subprime auto paper, company loans, and commercial mortgages as a way to put assets with yield on the books. Anecdotally, we see more and more bank portfolio managers looking around the fixed income arena to see where they can find yield without creating excessive risk exposure.
Pushing for yield enhancement in this economic climate will most likely provide another level of risk to the financial system. With projections for continued 'lack luster' economic growth - how will this play out over the next year for the banking community: more risk - potentially more reward; or more risk and potentially more stress?
2) Fed Chairman Bernanke, responding to questions after a speech in Cleveland yesterday, said that the U.S. is dealing with a "national crisis" in the jobs market. "We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of," he said. He urged fiscal discipline at the event.
Bernanke talking about 'fiscal discipline' ! ! ! Now that is a good one! Since when is over zealous leverage a 'fiscal discipline'????
1) A Bloomberg report says that banks are increasingly having to consider riskier assets to maintain margins because of the Fed’s activity in their markets. The report says that banks are looking at subprime auto paper, company loans, and commercial mortgages as a way to put assets with yield on the books. Anecdotally, we see more and more bank portfolio managers looking around the fixed income arena to see where they can find yield without creating excessive risk exposure.
Pushing for yield enhancement in this economic climate will most likely provide another level of risk to the financial system. With projections for continued 'lack luster' economic growth - how will this play out over the next year for the banking community: more risk - potentially more reward; or more risk and potentially more stress?
2) Fed Chairman Bernanke, responding to questions after a speech in Cleveland yesterday, said that the U.S. is dealing with a "national crisis" in the jobs market. "We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of," he said. He urged fiscal discipline at the event.
Bernanke talking about 'fiscal discipline' ! ! ! Now that is a good one! Since when is over zealous leverage a 'fiscal discipline'????
No comments:
Post a Comment