bank

Well, liftoff has officially begun. 

Assuming 25 bps doesn't tip EM into crisis and/or trigger some kind of dramatic, unforeseen meltdown elsewhere, the Fed is about to embark on the first rate hike cycle in over a decade. 

Of course the hike itself isn't what's interesting - virtually no one thought the Fed would fold again, even as China did its best to create a bit of pre-Yellen drama by stirring up the deval fears with a nod to a new trade-weighted index for the yuan.

Submitted by Richard Ebeling via EpicTimes.com,

We are living in a time that can only be considered monetary chaos. The U.S. Federal Reserve has manipulated key interest rates down to practically zero for the last six years, and expanded the money supply in the banking system by $4 trillion dollars over that time. And with the true mentality of the monetary central planner, the Fed Board of Governors are now planning to manipulate key interest rates in an upward direction that they deem desirable.

When last we checked in on BTG Pactual, “people were afraid.”

Why? Because the once proud investment bank that billionaire Andre Esteves boasted would be “better than Goldman” is scrambling to raise cash after Esteves’ arrest prompted investors to pull nearly half of their money from the bank’s fixed income funds and triggered a harrowing decline in the company’s equity and debt. 

Yesterday, we highlighted the all too eerie coincidence that the very first hedge fund (not mutual fund) to gate investors late on Friday, was operated by none other than the two former heads of distressed/high yield trading of the bank that started it all, Bear Stearns.

Today, things get even eerier, because while we already have the Bear Stearns link, an even more curious coincidence emerged when according to the BofA-Merrill index of "CCC and below" bond yields, the index just hit 17.24%, soaring nearly 2% in just the past two weeks, and rising fast.

The Federal Reserve has kept its zero interest rate policy (‘ZIRP’) for several years (and much longer than originally anticipated) whilst the European Central Bank seems to be getting serious about doing ‘better’ and has now reduced the deposit rate at the ECB to -0.30%. It’s already remarkable a central bank doesn’t seem to have any problem to reduce interest rates into the negative territory, but now Canada is considering making the same step as well.

Source: tradingeconomics.com