Category: Economics and Banking

The Market’s Game Of Chicken Continues….

US markets remain jittery as fears of a recession continue to build, despite some better than expected earrings reports, form tech. But the key issue relates to financial stability in the regional banking sector as the fall out from First Republic Bank continues. Indeed the regulators and banks are playing chicken – not good considering the 100 or so other institutions which to a greater of lesser effect have the same pressures derived from the rapid rate hike cycle.

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If The RBA Were A Company, The Governor Would Be Out Of A Job!

Where should accountability lay for the decisions of the Central Bank? There are many arguing that more independence is needed, so politicians can claim arms length influence only. On the other hand to date, this approach has not been working, and in a New Daily article Alan Kohler makes some interesting observations.

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Access To Cash Must Be Preserved…

Access to cash is an essential requirement for businesses and households, and this aspect of the current Senate review into Regional Branch Closures is a critical issue.

This same issue is playing out in the UK, and today we look at a recent report which highlights some essential issues. This needs to be incorporated into the Senate’s current thinking.

https://researchbriefings.files.parliament.uk/documents/CBP-9453/CBP-9453.pdf

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Volatility False Signals?

The VIX – or fear index is sitting below 20.00 and some are claiming this means the markets are showing signs of a recovery. However, in fact more options trades are being done on shorter terms than the VIX represents, so it is possible the VIX is broken as a distressed market signal.

Perhaps no surprise to see the CBOT will be releasing a new index, based on zero day options, where nearly half of all business is being written.

So today we discuss the rationale, and consider the consequences. Perhaps the existing VIX is giving a false signal!

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Operation Blancmange

A further deeper dive into the RBA Review recommendations. I felt it was more like blancmange, than a piece of innovative reform – not least because the proposed structural separation and targetting are close to that used by other Central banks, who make precisely the same mistakes as our own.

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Why Closing Branches Leads To More Online Fraud…

Dale Webster has been highlighting the significance of rising online fraud in the context of bank branch closures, and we discuss her recent submission to the current inquiry. Poor mobile coverage in the bush makes two factor identification laughable, and yet banks are paying tellers to push them online.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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A Spring Ramble Round Bath…

This is a quick walk around some of my local walks, on a brilliant spring day, with the dogs in tow. We enjoy views of the City of Bath, birdsong, meeting other dogs, and a bit of poetry from Percy Shelly! The route starts quite close to DFA Central… and follows part of the Bath Skyline walk.

https://www.nationaltrust.org.uk/visit/bath-bristol/bath-skyline

Hope this helps to answer the calls from my followers for some examples of the local country scene!

The Battle Lines Are Drawn: With Robbie Barwick…

The RBA Review has been released, and I discuss the recommendations with Robbie Barwick from The Citizens Party, which will removed important powers from Government and reaffirms the neoliberal philosophy which has undermined our economy for years.

The final week for submissions to the Regional Banking Inquiry also offers an important opportunity to make the case for a National Postal Bank, as an antidote to the banking drive to control our lives.

https://citizensparty.org.au/media-releases/64-more-towns-nabs-regional-bank-firing-line

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More Rate Rises Ahead – Almost Certainly!

The RBA Minutes certainly took the wind out of the sails of those expecting a rate cut anytime soon. More hikes are being signalled, and in fact Morgan Stanley flagged that the markets had got ahead of themselves.

The 30 Day Implied rates are also moving higher. So those being influenced by the spruikers saying now is good buying should be cautious. Things are more complex.

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Deposit Safety Is A Matter Of Confidence

Last week the Bank of England Governor raised the prospect of changes to the Deposit Insurance schemes which exists in many Western Economies. So we look at what he said, and consider the relative security of deposits in the banking system, in the light of recent failures, and Central Bank interventions.

For more on Deposit Bail-In see my recent posts here:

Is Deposit Bail-In A Thing In Australia? https://youtu.be/B8OC2izjKuA

Deposit Bail-In: Who’s Fact-checking The Fact-checkers? With Robbie Barwick https://youtu.be/CAXprMwMnyY

The Deposit Bail In Question… https://youtu.be/n8t-78n1Lrs

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