Chile’s dollar buys bring only short-term relief 4 Jan 2011 The central bank's plan to buy $12 bln worth of U.S. currency, funded by domestic debt, should help hold down the peso. But with record copper prices Chile's budget should be in surplus and interest rates higher. Intervention will stop working if high copper prices persist.
Latest corporate debt deals offer inflation hedge 4 Jan 2011 It may still be only a twinkle in investors' eyes, but eventually easy money and a recovering U.S. economy will bring rising prices. A slew of floatingrate issuance by Corporate America's heavyweights is giving inflation worriers an early chance to protect themselves.
BofA’s mortgage settlement gets too-giddy welcome 3 Jan 2011 The bank s shares jumped 5 pct on a $3 bln deal to buy back bad home loans from Fannie and Freddie and draw a line under the exposure. The cost is lower than outsiders worstcase scenarios and BofA s own expectations. But there s plenty of mortgage risk still on BofA s books.
Goldman’s old-school Facebook deal sets new tests 3 Jan 2011 The bank is raising $1.5 bln from clients to invest in the social network while putting in $450 mln itself. Like Morgan Stanley s reported Groupon deal, it looks like classic merchant banking. But with hot firms in the driver s seat, banks could wind up in sticky situations.