Posts Tagged treasury
China flexed its muscles using U.S. Treasuries
Posted by Oksana Grebenjuk in Fund Markets on Февраль 25th, 2011
Confidential diplomatic cables from the U.S. embassies in Beijing and Hong Kong lay bare China’s growing influence as America’s largest creditor.
As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms — from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck.
The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.
In June, 2009, the head of China’s powerful sovereign wealth fund met with Geithner and requested that he lean on regulators at the U.S. Federal Reserve to speed up the approval of its $1.2 billion investment in Morgan Stanley, according to the cables, which were provided to Reuters by a third party.
Although the cables do not mention if Geithner took any action, China’s deal to buy Morgan Stanley shares was announced the very next day.
The two Treasury officials to whom the cables were addressed, Deputy Assistant Secretary for Asia Robert Dohner and Deputy Assistant Secretary for International Monetary and Financial Policy Mark Sobel, declined through a spokesperson to comment for this story. The State Department also declined to comment. Read the rest of this entry »
As Recovery Takes Hold Treasury Yields Likely To Rise
Posted by Oksana Grebenjuk in Budget, Favourites on Сентябрь 23rd, 2009
With increasing investor sentiment that the economic recovery is gaining steam, many bond analysts are predicting a subsequent rise in Treasury yields. Coupled with the fact that the Fed will be ending it’s program to purchase up to $300 billion in Treasuries sometime in October, there is a general feeling that yields have no where to go but up.
We likely going to see more and more investors leaving the safe haven of Treasuries and seeking higher returns in the next few months. The Fed is still expected to keep it’s targeted Federal Funds rate at between 0% and .25% when it meets this week.
As talk of the government’s exit strategy also gains steam we are also likely to see traders start to price in future Fed rate hikes, although that’s still premature at this time. Based on futures options most investors believe the Fed will keep rates at their current level at least until next summer or fall. Read the rest of this entry »
Moody’s Report Shows Decline In Commercial Real Estate Values
Posted by Oksana Grebenjuk in Banks on Май 27th, 2009
A report released by the ratings service Moody’s states that commercial real estate values have dipped approximately 21% since it’s high in October of 2007. The report sent bank stocks tumbling as worries over future losses continue to plague the banking sector.
While commercial real estate has fared better than it’s residential counterpart thus far, the ongoing recession is clearly having a major impact. We’re seeing a big drop in commercial real estate activity across the entire country and the outlook is for further declines as the year moves forward.
Obviously this is more bad news for banks as well as for the government, which has already spent over a trillion dollars trying to fix the banking system. This will definitely hamper efforts to get private investment back into the mortgage backed securities market. Read the rest of this entry »
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