AROUND THE WEB

Owing to the shortage of bank bond trading the game has changed.

If corporate bonds don’t trade frequently enough for you, one solution is to turn elsewhere.
More and more investors are betting on whether the notes will go up or down in value without owning the securities, using derivatives. This has been attractive for asset managers looking to be nimble in markets or make big bets, especially as corporate-debt trading volumes wane.
Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, is one who’s using credit-default swaps for bullish wagers on company debt. He accelerated his use of the contracts in the three months ended June 30 by selling protection against credit losses, according to a quarterly report. 

Gross isn’t alone: Outstanding bets on a credit-swaps index tied to North American high-yield bonds have soared to the highest level since at least 2011. Net wagers on the latest Markit CDX North America High Yield Index rose to $31.5 billion as of July 18, compared with a peak of $29.1 billion on the last series in March, according to data compiled by Bloomberg.
Investors are looking for faster ways to express views on investment-grade and high-yield bonds, which are trading less as a proportion of the overall debt outstanding as Wall Street banks use less of their own money to make markets.Bloomberg
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If you like chocolate you better like higher prices too.

Hersey, the big Pennsylvania candy maker, recently announced it was hiking prices 8% owing to higher prices for chocolate, dairy and nuts. Note here the announcement names not just chocolate but dairy and nuts.

Hit hard this year by an on-going drought, California, which grows almost half of the nation's nuts, fruits and veggies, not to mention its role as leading the nation in producing milk and dairy, in 2012 produced nearly 19% of all dairy products.

Last week chocolate prices closed around $3,200 a metric ton, after hitting a three-year of $3,284 earlier in the week.  Mars Candy Company, the privately owned firm noted for its Mars Bars among others, raised prices 7% last week also.

As is usually the case several factors are being blamed for the high coca prices from smuggling in Ghana to 
the Ebola virus.http://247wallst.com/
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Someone once said denial is not just a river in Egypt.

The United States Federal Reserve System is one of the most powerful governmental organizations in the history of the world. America's central bank has control over the supply of dollars, and currently exerts great influence over interest rates, both for short-term and long-term borrowing. And, though the Fed was partly responsible for the regulatory failures that led to the global economy's near-meltdown in 2008-2009, post-crisis reform has left it with even greater authority and more responsibility for overseeing the financial system.

In many countries, people on the right of the political spectrum provide a bastion of support for the central bank. In northern Europe, for example, the European Central Bank's independence is seen as essential for price stability — and politicians on the right typically attach a higher priority to this goal.###



The situation is quite different in the US. Here, the right, represented by the Republican Party, has long been suspicious of the Fed, reflecting its opposition to a powerful federal government, as well as nostalgia for the days of the gold standard (particularly the version that operated before the Fed was created in 1913). The Fed as it currently operates is being protected by the left (the Democratic Party).


For example, I recently testified at a hearing of the House Financial Services Committee on Republican-proposed legislation that would impose on the Fed greater limitations on both monetary policy and regulation. House Democrats oppose the bill and invited me to the hearing, where I explained that the proposed constraints would, in my view, greatly hamper the Fed's effectiveness — including its ability to help the economy return to full employment and to prevent the financial system from spinning out of control again. 

Note: The key paragraph is highlighted ### in this academic's story.

This is academic BS tossed at you from the banks of the Charles River. Dodd-Frank will turn into one of the worst pieces of legislation since 1913 when the IRS and The Federal Reserve Bank were both created in a twofer against the American public.
http://www.cnbc.com/id/101872556

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