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Big Borrowing by Financials



March 19, 2012 – Comments (0)

Last week's new bond issues totaled over $30 billion - not quite what we saw the week before, but still a big number. 

Foreign banks and financial firms were responsible for nearly half the week's total.  Add in the US financial borrowers and the total for financial firm borrowing jumps to 3/4 of the week's total. 

Foreign firms, especially financials, tapping the US credit market seems to be a developing trend.  My best guess in Operation Twist has suceeded in distorting longer term US bond rates down to somewhere between cheap and crazy low.  That makes the US a good source of funds for carry trades, capital funding, etc.   Nice to know the Fed is busy providing liquidity to the world.

If anyone has other thoughts on why we're seeing an uptick in overseas borrowers pulling out their credit cards in the US bond market, please share your insight here or at the article.

Cheers,  Russ

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