Japan has always been a large exporter and has continually exported significantly more goods and services than it imports. The result has been decades of current account surpluses that have positioned Japan as a net creditor to the world.This is a distinction also shared by the Swiss franc, often considered another haven currency.The value of foreign assets held by Japanese investors is substantially higher than […]

A surge in banks’ demand for the European Central Bank’s dollar funding increased concerns on Friday that fears over Deutsche Bank AG where forcing lenders to stock up on greenbacks. But there are signs that the drawdown may have more to do with U.S. financial reform. As investors continue to fret over Deutsche Bank, a jittery market is likely to continue leaping to negative conclusions. […]

The outstanding global derivatives market is over $700 trillion — 10 times global GDP. And amazingly, one bank, Deutsche Bank, owns about $75 trillion of those derivatives. That’s roughly 13% of all outstanding global derivatives. And Deutsche Bank is in trouble…With its tentacles extended throughout the world like a global grapevine, Deutsche Bank presents “systemic risk.” In fact, the IMF declared last month that Deutsche […]

While odds of a deal in Algiers are virtually nil, keep an eye on oil vol: with a barrage of “headlines” (mostly from anonymous Reuters “sources”) imminent, the only guarantee move is that oil will move dramatically higher and lower in the next three days.

Angela Merkel said, “Europe is not at all in a good state.” And Europe is famous for waiting until the last second to actually address crises. The danger is that threats are flowing from so many holes that plugging up the leak at the last moment may take more fingers than the Little Dutch Boy of myth has.

He adds that “no doubt” that Yellen will say at her press conference that Fed expects to tighten over time; yet hard for Fed to be “overly hawkish” since September statement will need to explain why policy makers aren’t hiking this week. FOMC may decide statement should remain neutral, leave it to Yellen to deliver “close but not quite there yet” message. Looking at the […]

The Eurozone’s banking system, incorporating the national central banks and the ECB, bound together in a bizarre settlement system called TARGET, became the means for member nations to buy German goods on credit. Very good for Germany, you may say, but the problem was that the credit was supplied by Germany herself. It is the same as lending money to the buyer of your business […]