Bangladesh has learned a valuable lesson over the past two months: Do. Not. Trust. The. New. York. Fed.
On a quiet Friday morning in early February, a series of instructions using authenticated SWIFT codes was sent to 33 Liberty allegedly from the Bangladesh central bank requesting the transfer of nearly $1 billion from the country’s FX reserves.
Earlier this month, a reader noticed something rather disturbing. Piraeus Bank seemed to have added a new line item in one of its reports and that new line item appeared to suggest that the bank was set to charge customers for exchanging €500 notes for smaller bills.
And it wasn’t just Piraeus. Other Greek banks looked to be doing something similar.
One week ago, we documented the Hollywood-esque theft of $100 million from accounts held at the NY Fed and belonging to the central bank of Bangladesh.
In many ways, the heist was elegantly planned and executed and in others it was comically amateurish.
Janet Yellen has spoken and the word was "hold."
And not only that, the FOMC median forecast now only implies two rate hikes for 2016 versus four as the Fed's own outlook converges on market expectations. The read through on the US economy was relatively benign but worries about global markets persist, and the very fact that that has become what certainly appears to be a deciding factor in these decisions speaks to the notion that the invisible "third mandate" is becoming more and more apparent with each passing meeting.
One weekend ago, in an unexpected episode of Zero Hedge trolling by Jefferies economists, the junk-bond focused mid-tier investment bank sent out a note in which it defended the "recovery" as follows: