Search

D.E. Shaw & Co. has successfully raised $1 billion for its latest private credit fund, Alkali VI, focusing on less liquid credit-related assets. This fund is the sixth in the Alkali series and will be managed by Richard McKinney, Marianna Fassinotti, and Seth Charnow. The firm manages over $60 billion across various strategies and has seen success with its private credit vehicles, such as the Diopter series. Private credit funds have outperformed buyout funds recently, but this trend may change as interest rates are cut by the Federal Reserve. [Extracted from the article]

D.E. Shaw & Co. has successfully raised $1 billion for its latest private credit fund, Alkali VI, focusing on less liquid credit-related assets. This fund is the sixth in the Alkali series and will be managed by Richard McKinney, Marianna Fassinotti, and Seth Charnow. The firm manages over $60 billion across various strategies and has seen success with its private credit vehicles, such as the Diopter series. Private credit funds have outperformed buyout funds in recent quarters, but this trend may change as interest rates are cut by the Federal Reserve. [Extracted from the article]

DWS Group, the investment arm of Deutsche Bank AG, experienced net inflows of €18.3 billion in the third quarter, surpassing analyst expectations. The company saw improvements in its cost guidance for the year, indicating a positive performance recovery. Despite outflows in certain funds, DWS has been focusing on growing its alternatives business to attract more fees and capital. The firm's adjusted pretax profit increased by 5% from the previous quarter, and its assets under management reached €963 billion. [Extracted from the article]

China's central bank, the People's Bank of China (PBOC), has established a swap facility to provide liquidity to institutional investors for purchasing stocks. The facility is part of a larger stimulus package aimed at boosting the economy. Eligible securities firms, funds, and insurers can apply for the facility by providing certain collaterals. The size of the tool is 500 billion yuan ($70.6 billion) and can be expanded in the future. This move follows a recent stock market rally, and while it is expected to support the market, the timing is not directly linked to the stock market's performance. [Extracted from the article]

Deputy Governor Sarah Breeden of the Bank of England has suggested that relaxing financial regulations could help boost economic growth. She emphasized the importance of maintaining a resilient banking system while also considering opportunities to increase growth without undermining financial stability. Breeden mentioned potential adjustments to UK pensions rules and lending rules for small and medium-sized businesses as areas where regulation could be altered to encourage growth. She also highlighted the need for intervention when disruptions occur. [Extracted from the article]

Invesco, an investment management company, has announced that it will be closing two of its institutional prime money-market funds before new regulations from the US Securities and Exchange Commission (SEC) take effect. The closures are in response to industrywide reforms that will make it more expensive to withdraw money from these funds during times of financial stress. The new regulations are expected to increase demand for government securities and decrease demand for riskier assets. Several other funds have also announced plans to convert to government-only holdings or close altogether in response to the new regulations. [Extracted from the article]

Federal Reserve Governor Christopher Waller believes that the neutral interest rate, also known as "r-star," is still relatively low. However, he warns that unsustainable fiscal spending could potentially change this trend. Waller's comments came after a speech he gave at the Reykjavik Economic Conference, where he discussed the longer-term trends that have pushed the neutral rate lower over time. He also mentioned that the U.S. is on an unsustainable fiscal path, which could impact the neutral rate. The neutral rate is a theoretical concept that describes a policy setting that neither stimulates growth nor slows demand, and estimates for its value have a wide range of uncertainty. Waller emphasized that determining the value of the neutral rate is challenging and that there is no reliable and straightforward way to do so. Despite this, policymakers are considering whether the rate has increased due to the economy's response to higher rates being less than expected. Waller listed several trends that may have pushed the neutral rate down, including lower inflation, increased demand for safe assets like Treasuries, and increased holdings of dollar assets by foreign institutions. However, he does not believe these factors can explain a recent increase in the neutral rate, but they may contribute to an increase in the future. [Extracted from the article]

Federal Reserve Governor Christopher Waller discussed the decline in the neutral interest rate over time, attributing it to changes in demand for safe assets globally. However, he cautioned that unsustainable fiscal spending could reverse this trend. Waller did not comment on the near-term outlook for monetary policy. The neutral rate, which refers to a policy setting that neither stimulates growth nor slows demand, is a theoretical concept with no reliable way to determine its value. Waller listed several factors that may have contributed to the decline in the neutral rate, such as lower inflation, increased demand for safe assets, and increased domestic demand for Treasuries. He also mentioned that these factors may contribute to an increase in the neutral rate in the future. [Extracted from the article]

Federal Reserve Governor Christopher Waller believes that the neutral interest rate, also known as "r-star," is still relatively low. However, he warns that unsustainable fiscal spending could potentially change this trend. Waller's comments came after a speech he gave at the Reykjavik Economic Conference, where he discussed the longer-term trends that have pushed the neutral rate lower over time. He also mentioned that the U.S. is on an unsustainable fiscal path, which could put upward pressure on the neutral rate if the supply of US Treasuries exceeds demand. The neutral rate is a theoretical concept that describes a policy setting that neither stimulates growth nor slows demand, and it cannot be observed in real time. Waller emphasized that determining its value is challenging and uncertain. Despite this, policymakers are considering whether the rate has increased due to the economy's response to higher rates being less than expected. Waller listed several trends that may have pushed the neutral rate down, including lower inflation, increased demand for safe assets like Treasuries, and increased holdings of dollar assets by foreign institutions. However, he does not believe these factors can explain a recent increase in the neutral rate, but they may contribute to an increase in the future. [Extracted from the article]

The Bank of England has postponed one of its weekly repo operations due to technical difficulties with its auction platform. The Indexed Long-Term Repo Operation, originally scheduled for Tuesday, has been rescheduled for Wednesday. The BOE facility allows banks to borrow cash for a six-month period in exchange for less liquid assets. This is not the first time technical issues have affected the BOE's operations, as similar problems occurred in 2020 and 2022. [Extracted from the article]

The Bank of England has postponed one of its weekly repo operations due to technical difficulties with its auction platform. The Indexed Long Term Repo Operation, which allows banks to borrow cash for a six-month period, was rescheduled for the following day. The cause of the technical difficulties was not disclosed. This is not the first time technical issues have affected the Bank of England's operations. [Extracted from the article]

The Bank of England has postponed one of its weekly repo operations due to technical difficulties with its auction platform. The Indexed Long Term Repo Operation, which allows banks to borrow cash for a six-month period, was deferred without a specified resolution time. This is not the first time technical issues have affected the Bank of England's operations, as the Crest financial markets settlement also experienced problems in September 2020. Recent borrowing at the BOE facility has been low, with the latest operation totaling £10 million. [Extracted from the article]

The Bank of England has postponed its weekly repo operation due to technical difficulties with its auction platform. The Indexed Long Term Repo Operation, which allows banks to borrow cash for a six-month period in exchange for less liquid assets, was scheduled to take place at 10 a.m. London time on Tuesday. This is not the first time technical issues have affected the Bank of England's operations, as the Crest financial markets settlement also experienced problems in September 2020. [Extracted from the article]

The Bank of the Philippine Islands (BPI) predicts that the country's population of millionaires will continue to grow due to strong economic growth. BPI Wealth, the bank's asset management arm, aims to capture a significant portion of the high net worth market, with plans to increase its assets under management to 3 trillion pesos by 2026. The Philippines' improving macroeconomic situation and global recovery provide investment opportunities for BPI to attract individuals with liquid assets of at least $1 million. BPI also suggests that it may be a good time to shift to longer-term bonds and expects stocks to become more active as interest rates decline. [Extracted from the article]

Chile's Finance Ministry is expected to issue hard-currency bonds in the near future due to a decrease in liquid assets. The Treasury had only $1.1 billion in liquid assets in November, the lowest since 2010, and the dollar balance decreased from $719 million to $301 million. The country has been facing concerns over its fiscal deficit, with the debt burden increasing to 37.2% of GDP in the second quarter of 2023. Itau economists also noted the risk of the government withdrawing money from its Stabilization Fund. [Extracted from the article]

The article reports on the survey conducted by the Survey Research Center of the University of Michigan regarding the consumer behavior in the U.S. The survey reveals that the buying public appears to be in a good position to put its intentions into action with the two important matters, income and liquid assets. The article also notes that an important component of the index is how often consumers express intentions to buy automobiles and major household items.

Lobbying efforts surrounding stablecoins in the US Congress have increased significantly in 2023, as the industry seeks to influence legislative outcomes. Stablecoins are tokens that are meant to be backed by safe and liquid assets, serving as a bridge between cryptocurrencies and traditional finance. Both Democrats and Republicans have shown interest in regulating stablecoins, with lobbying spending from companies like Tether and Circle increasing. The House Financial Services Committee is a key battleground for stablecoin regulation, and overall lobbying spending by the crypto industry is on track to set a record in 2023. [Extracted from the article]

Lobbying efforts surrounding stablecoins in the US Congress have increased significantly in 2023, as the industry seeks to influence legislative outcomes. Stablecoins are tokens that are meant to be backed by safe and liquid assets, serving as a bridge between cryptocurrencies and traditional finance. Both Democrats and Republicans have shown interest in regulating stablecoins, with lobbying spending from companies like Tether and Circle increasing. The House Financial Services Committee is a key battleground for stablecoin regulation, and overall lobbying spending by the crypto industry is on track to set a record in 2023. [Extracted from the article]

Mercon Coffee Corp., a bankrupt global coffee trader, has had its proposed loan from Coöperatieve Rabobank rejected by a US judge. The loan, which would have been up to $40 million with high interest rates and fees, included provisions that would likely force Mercon to liquidate rather than be bought or reorganized. The judge deemed the arrangement too generous and has encouraged Mercon to negotiate a new deal with Rabobank. The company may not need to borrow any money in the near future, as it has at least $12 million in cash. [Extracted from the article]

Central clearinghouses that hold over $1 trillion in liquid assets may worsen financial stress and lead to "margin spirals" that push down asset prices, according to researchers from the Bank for International Settlements (BIS). The researchers expressed concern over clearinghouses' $600 billion holdings of government bonds, which can act as both collateral and underlying assets, creating a "wrong way risk" during a selloff. Clearinghouses require members to place collateral to protect against counterparty risk, but meeting these demands can create liquidity risks during market volatility. The BIS's findings add to regulatory scrutiny of clearinghouses' role in market meltdowns. [Extracted from the article]

Argentine banks are increasing their holdings of liquid assets ahead of the upcoming presidential election to ensure they can accommodate a potential surge in peso withdrawals. While no one is predicting a run on deposits after the vote, banks want to be prepared after being caught off guard by increased demand before the first-round vote in October. There is speculation that a currency devaluation may occur after the election, leading savers to withdraw their peso deposits to buy dollars on the black market. Banks have increased their holdings of 1-day term notes in pesos and reduced holdings of 28-day term notes. Despite some withdrawals in October, most deposits remained in the financial system. Both presidential candidates have shifted toward more centrist positions, which may be boosting confidence in the economy. [Extracted from the article]

(Bloomberg) -- The time is ripe to buy Treasuries after a four-month selloff, as the US central bank is close to signaling its hiking cycle is over and will ease next year, driving the benchmark yield as low as 2.5%, said AllianceBernstein LP. Fed's Higher-for-Longer Mantra Has Doubters in Bond Market The US central bank is likely to start easing from as early as late first quarter 2024, and 10-year US yields will probably drop to between 2.5% and 3% next year, Sheridan said. [Extracted from the article]

Yields on 10-year Treasuries will probably drop to between 2.5% and 3% next year as the Federal Reserve cuts interest rates, said Matthew Sheridan, lead portfolio manager for income strategies at AB. Investors who buy 10-year Treasuries now will reap a return of almost 20% if yields drop as low as 2.5% by the end of next year from around 4.30% on Tuesday. Sheridan's strategy is underpinned by expectations that the Fed won't hike further, making it less risky to buy Treasuries after 10-year yields surged about 100 basis points from an April low. [Extracted from the article]

Traders now stand to pocket 9 basis points over the risk-free rate to part with their cash and borrow the securities, the most since 2015, according to RepoFunds Rates Benchmark data from CME Group. (Bloomberg) -- German debt hasn't been this appealing relative to cash in years, the latest sign a collateral shortage that dogged the region's money markets is easing. [Extracted from the article]

FTX is looking for court permission to sign an investment services agreement with Galaxy Asset Management as part of the plan. (Bloomberg) -- The administrators of FTX are seeking to appoint the asset management arm of billionaire Michael Novogratz's Galaxy Digital Holdings Ltd. to help oversee the bankrupt exchange's giant pile of digital tokens. [Extracted from the article]

(Bloomberg) -- The administrators of bankrupt crypto exchange FTX criticized traders and market makers on a key creditor panel, accusing them of seeking control of assets regardless of the impact on other stakeholders. The dispute flared in the wake of last month's draft reorganization plan from FTX's new management team under Chief Restructuring Officer John J. Ray III. [Extracted from the article]

(Bloomberg) -- A brokerage run by a former London Stock Exchange executive was sued by the Securities and Exchange Commission for "repeated violations" of net capital requirements. Startup Bets on an Unusual Market Weeresinghe and Ustocktrade underfunded the broker-dealer, the SEC alleged in a lawsuit filed in Manhattan federal court. [Extracted from the article]

(Bloomberg) -- The US Securities and Exchange Commission is set to impose a slate of new rules on money-market mutual funds, setting up a potential clash with titans in the $5.5 trillion industry. That turmoil prompted the Federal Reserve to intervene and rescue money-market funds for the second time in 12 years, spurring calls for the SEC to impose tougher regulations. [Extracted from the article]

(Bloomberg) -- The UK's financial services regulator has said asset managers are putting investors at risk by not adequately monitoring the liquidity of their funds. Many mutual fund houses did not properly use their liquidity management tools and failed to understand the risks of less liquid assets held in their portfolios, the Financial Conduct Authority said following a multi-firm review. [Extracted from the article]

EU officials considered actively managing the assets to generate returns that could be used to support Ukraine. (Bloomberg) -- The European Union has assessed that it can't legally confiscate outright frozen Russian assets and instead is focusing on using those assets temporarily, according to a document obtained by Bloomberg. [Extracted from the article]

The article focuses on a study which shows over 50 generation was the most reliable source of fueling the economy. The study shows that of the household financial holdings including stocks, bonds and liquid assets, 77% were in the hands of over 50 generation. It also shows that the older generation spending percentage of pretax income has increased to 91% in 1983 from 84% in 1973. Further, during 1960s through mid-1970s, the older generation group personal income has grown to nearly 3% average.

The article offers information on the performance of individual's liquid savings for the first quarter of 1952. According to the U.S. Securities and Exchange Commission (SEC), people have added 13 billion dollars to their savings. However speculations are made regarding the aftermath of World War II and reaction to post-Korean inflation and rearmament program. It discusses the effect of saturation theory for increased production and sales per capita.

(Bloomberg) -- Mobile game developer Huuuge Inc. said about 10% of its liquid assets are held at Silicon Valley Bank and that the group has sufficient resources to meet cash requirements for the foreseeable future. The Warsaw-listed company had a total of about $237 million of cash and securities as of March 10, of which $24.2 million were held at SVB, Huuuge said in filing on Saturday. [Extracted from the article]

The tokens represent the same deposit claims as balances held at a bank, but are recorded on a blockchain and can be used for cross-border payments or on decentralized-finance platforms. (Bloomberg) -- A potential new form of digital money - deposit tokens issued by banks on blockchain - may become more widely used than stablecoins, a JPMorgan Chase & Co. study found. JPMorgan Sees Promise in "Deposit Tokens" Issued by Banks. [Extracted from the article]

(Bloomberg) -- Binance said it will submit evidence to UK lawmakers regarding discussions held about FTX.com when the two were in deal talks, as well as on its decision-making around the sale of FTX.com's native token FTT. Due to several ongoing investigations against FTX in the US, Trinder said Binance may choose to redact certain information. [Extracted from the article]

A decision by the German finance agency to increase securities lending, collateral released by early repayment of ECB pandemic-era loans to banks and eventually quantitative tightening could also help, he added. (Bloomberg) -- The European Central Bank has increased the amount of securities that central banks in the euro area can lend out against cash collateral, a bid to satisfy demand for high-quality liquid assets around year-end. [Extracted from the article]

The Pensions Regulator (TPR) said it will continue to monitor the situation beyond Friday, when the Bank of England is scheduled to stop its emergency bond-buying operations. UK pension programs should review their funding, liquidity and hedging policies in the wake of widespread collateral calls at the heart of the turmoil in the gilt market, according to their watchdog. [Extracted from the article]

Asset managers including Blackrock Inc. and Schroders Plc are limiting institutional investors' withdrawals from some UK property funds after a wave of requests to move money. Schroders said in an emailed statement the redemptions were requested before last week's gilt meltdown, but the trend is likely to intensify in light of pension funds' liquidity issues. [Extracted from the article]

(Bloomberg) -- A dash for cash among sterling investors after market turmoil sparked by pension fund margin calls is coming at a bad time, according to an M&G Investments executive. Nina Moylett, the firm's head of cash and currency, sees her markets as divided between pension funds desperate for cash and others who have built up sufficient buffers. [Extracted from the article]

RDJTAUT0G1KW (Bloomberg) -- Australians have built up strong liquidity buffers in recent years, reducing the threat to financial stability from a sharp rise in household debt, according to a Reserve Bank research paper. Keywords: ALLTOP; ASIA; AU; BNK; BON; BUSINESS; COS; ECOTOP; FIN; FRX; GOV; INDUSTRIES; MARKETS; REL; WORLD EN ALLTOP ASIA AU BNK BON BUSINESS COS ECOTOP FIN FRX GOV INDUSTRIES MARKETS REL WORLD Australians have built up strong liquidity buffers in recent years, reducing the threat to financial stability from a sharp rise in household debt, according to a Reserve Bank research paper. [Extracted from the article]

(Bloomberg) -- The biotech-stock selloff has run so far that many companies are now worth less than the amount of cash they have in the bank. Oncology companies are trading at a median of 0.7 times enterprise value to cash, compared with a 1.1 times for those pursuing other diseases, according to Goonewardene's analysis. Nearly 200 such North America-based companies have negative enterprise values, meaning that their liquid assets are worth more than their market values, according to data compiled by Bloomberg. [Extracted from the article]

Oncology companies are trading at a median of 0.7 times enterprise value to cash, compared with a 1.1 times for those pursuing other diseases, according to Goonewardene's analysis. Nearly 200 such North America-based companies have negative enterprise values, meaning that their liquid assets are worth more than their market values, according to data compiled by Bloomberg. (Bloomberg) -- The biotech-stock selloff has run so far that many companies are now worth less than the amount of cash they have in the bank. [Extracted from the article]

Musk's filing with the U.S. Securities and Exchange Commission on Thursday details $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including margin loans backed by his equity stake in Tesla Inc. The margin loan facility documents do allow Musk to sell his unpledged Tesla shares. [Extracted from the article]

Here's the latest news and analysis from Bloomberg Economics to help you start the week. (Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast. [Extracted from the article]

Presents advice for investing in corporations with high cash positions. Description of cash-rich companies in the pharmaceutical sector, such as Bristol-Myers Squibb Co.; Consideration of other companies that are expected to use liquid assets wisely; Strength of Cigna Corp., which has billions in cash to be used for either stock buybacks or a sharp hike in its dividend.

(Bloomberg) -- H2O Asset Management has written down the value of some of its funds that contain hard-to-sell assets by more than 40% since August. In the fall of 2020, H2O froze the trading of several vehicles because of valuation uncertainties due to a large exposure to thinly traded securities linked to German businessman Lars Windhorst. [Extracted from the article]

(Bloomberg) -- Australians may be less sensitive to economic shocks as their holdings of liquid assets like cash and equities have increased in tandem with a property-fueled rise in household debt, according to Reserve Bank research. It's common to read that "higher housing prices and debt over recent decades has made the economy more financially fragile", the RBA research paper said Wednesday. [Extracted from the article]

SoftBank Is Winding Down Options Bets After Investor Fallout The operation was a wash for SoftBank as a whole, Son told a briefing in Tokyo, as his investment came later. (Bloomberg) -- Masayoshi Son said he personally took a $1.3 billion hit on his firm's controversial stock and options investment program. [Extracted from the article]

(Bloomberg) -- Proximity Labs, a research and development firm, announced the creation of a $350 million grants vehicle to help build decentralized-finance applications on the NEAR blockchain, where it is focusing its efforts. It's backed by venture-capital firms such as Andreessen Horowitz's A16Z, Pantera Capital, Electric Capital, Dragonfly Capital, Coinbase Ventures, Blockchain.com and Baidu Ventures. [Extracted from the article]