The Banking and Strategy Initiative

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The Thursday Fed Update: (Early Report) Budget Deficit Recovers strength

Though the average deficit for each month (Econoday commentary) is still double the traade deficit of $50 B at $904 B for the first 9 months of the Fiscal year, excluding calendaring it is still 12% down over the same period in 2011-12. Receipts bridged over the expected $120B deficit for June to under $60 B even as spending cuts are likely to hit Defence budget components as election year ends with gridlock intact and Romneytainment in full force on the airwaves for the next 4 months hitting Obama for talking about jobs, romney and many more pet subjects of the well funded Super PACs

The Fed will not report much MBS buying in the afternoon today though some central bank swaps may have sneaked in as three Central banks cut rates iin the sam ehour earlier in the week and the Euro plunged from 1.26 levels of last week to probably under $1.21 before this week’s trading ends.

US equities recovered in the afternoon after opening at the bottom and JP Morgan reports the engimatic fortress balance sheeet tomorro in quite contrast to Bank of America which chose to sink to a $0 bottomline in Q2 last year as it mulled its onerous penalties in the housing saga

Wells Fargo joined Citi and Goldman Sachs in paying pennies for crimes not proved when it settled for mortgages mis sold to racial groups during hte heat of the sub prime season, while people at large figure out what exactly happened to , up to and before and after Lehman Bros. Washington Mutual in the mean time integrated into JP Morgan’s est coast banking outfit seems to have got easy end of testimony in a suit against valuer eAppraise IT being heard by Judge Charlie Ramos. According to the judge the expert trying to prove aMu made eAppraise value homes higher could not do well. JP Morgan has an ambitious tagret of 100 new branches on the West Coast to catch up with Wells Fargo and Bank of America in the region

In the afternoon updates, Money Supply is unlikely to be on the mend as the MBS buying here and the ECB buying of bonds has been more or less inactive. Also, ECB has withdrawn its deposit rate of 0.25% for keeping money with the ECB and many banks’ liquid funds have been discontinued as a result

 

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