Fed Seen Avoiding Historic Loss by Holding Mortgage Debt

“The Federal Reserve can avoid unprecedented losses by never selling mortgage-backed securities from its record $3.84 trillion balance sheet, according to updated estimates by Fed economists in Washington. The Fed every month is purchasing $85 billion in Treasuries and mortgage-backed securities in a program aimed at fueling economic growth and combating unemployment, which was 7.2 percent in September.”   […]

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Germany Summons U.S. Ambassador to Explain Merkel Phone Tapping

Germany summoned the U.S. ambassador to the Foreign Ministry over reports ChancellorAngela Merkel’s mobile phone was monitored by U.S. spy agencies as European Union leaders prepared to discuss tighter data protection. Ambassador John B. Emerson was called in for talks with Foreign Minister Guido Westerwellein Berlin this afternoon, a ministry spokeswoman said, speaking under customary condition of anonymity. France summoned […]

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Senate Passes Accord to End Shutdown as House Set to Act

The Senate voted 81-18 to halt the 16-day government shutdown and raise the U.S. debt limit, moving one step closer to ending the nation’s fiscal impasse. The House of Representatives began debate at 9:24 p.m. and plans to vote later tonight. The Senate acted the day before U.S. borrowing authority was scheduled to lapse as Congress […]

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A U.S. Default Seen as Catastrophe Dwarfing Lehman’s Fall

“Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever […]

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First U.S. Shutdown in 17 Years Imminent With No Talks

“Republicans and Democrats say they don’t want to close the government, though neither side is budging from their positions. House Republicans, led by Speaker John Boehner, want to delay President Barack Obama’s Affordable Care Act for a year and make other changes to the law. Democrats, led by Obama, say that won’t happen. Obama will […]

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Gross Says Investors Shouldn’t Trust Moody’s on U.S. AAA Rating

“Investors shouldn’t trust the opinion of Moody’s Investors Service on the U.S.’s Aaa rating and should rely instead on the company’s competitors, according to Pacific Investment Management Co. founder Bill Gross. Moody’s and the U.S. Treasury are one “happy family,” Gross, manager of the world’s biggest bond fund, said today in a post on Twitter. […]

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Bullard Says Taper Possible Next Month After Close QE Call

“Federal Reserve Bank of St. Louis President James Bullard, a voter on policy this year who has backed record stimulus, said a small tapering of bond buying is possible next month after the Fed made a close call this week in deciding not to slow purchases.”   Continue reading on bloomberg.com

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Summers Quit Fed Quest as Democrats Spurned Obama Favorite

“Lawrence Summers’s withdrawal as a candidate for Federal Reserve chairman came after an unprecedented campaign to stop a Fed nominee even before he was announced, spearheaded by Democratic senators who took on a president of their own party. The decision by Summers, the former Treasury secretary and economic adviser to President Barack Obama, followed Democrats […]

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Russia to Brazil Intervention Adds to U.S. Debt Distress

“Investors suffering the worst losses in Treasuries since at least 1978 can add dollar sales by emerging-market central banks to their list of challenges. Speculation that the Federal Reserve, the biggest buyer of Treasuries, will reduce its purchases sent U.S. debt down 4.1 percent this year and boosted the dollar against developing-nation currencies for four […]

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How the Bank Lobby Loosened U.S. Reins on Derivatives

“One by one, Gary Gensler’s supporters deserted him. Now the chief U.S. regulator of derivatives was being summoned by Treasury Secretary Jacob J. Lew to explain why he refused to compromise. Banks and lawmakers, as well as financial regulators from around the world, had besieged Lew with complaints about Gensler’s campaign to impose U.S. rules […]

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