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6 posts from January 2017

January 23, 2017

Measuring Americans’ Expectations Following the 2016 Election



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While consumer confidence as measured by various surveys has increased sharply since the national election, the New York Fed's Survey of Consumer Expectations (SCE) has shown little notable change in expectations. In this post, we show that the difference may partly reflect systematic compositional changes whereby respondents who answer a survey after the election differ in important ways from those answering the survey before the election—something which the SCE largely avoids. We also show that the flat average aggregate outlook in the SCE masks substantial regional/partisan heterogeneity in shifts in expectations.

Continue reading "Measuring Americans’ Expectations Following the 2016 Election" »

Posted by Blog Author at 7:00 AM in Expectations, Household Finance | Permalink | Comments (1)

January 20, 2017

Historical Echoes: Are There Any Banks on Bank Street?



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Bank Street in New York City is a quaint little six-block stretch in Greenwich Village (see this 48-second video) with a huge cultural legacy—but no banks. Many cities and towns have a Bank Street and often the street is so named because that's where most of the banks were originally located. (It is not likely that any Bank Street got its name because of its proximity to a riverbank.) However, New York City’s Bank Street is not where the banks were originally located and it's not even in the financial district—it's in Greenwich Village. Why, then, is it called “Bank Street?”

Continue reading "Historical Echoes: Are There Any Banks on Bank Street?" »

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments (1)

January 18, 2017

Advent of Trade Reporting for U.S. Treasury Securities



Greater transparency is coming to the U.S. Treasury securities market. Members of the Financial Industry Regulatory Authority (FINRA) will be required to report their trades in Treasuries using FINRA’s Trade Reporting and Compliance Engine (TRACE) starting July 10, 2017. Although initial collection efforts are focused on providing such data to the official sector, the public will likely have access in the future. In this post, I discuss the motivation for such reporting, how it came to be decided on, and the evidence from the corporate bond market on how public access to such data affects trading costs.

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Posted by Blog Author at 7:00 AM in Financial Markets | Permalink | Comments (0)

January 13, 2017

Historical Echoes: Tracking Money



LSE_Historical Echoes: Tracking Money

Have you ever wondered where your dollars go when you spend them? Not in financial terms, but their physical location? Well, there’s an app and a website for that.

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Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments (3)

January 11, 2017

Credit Market Arbitrage and Regulatory Leverage



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In a companion post, we examined the recent trends in arbitraged-based measures of liquidity in the cash bond and credit default swap (CDS) markets. In this post, we turn to the mechanics of the CDS-bond arbitrage trade and explore how the costs and profitability of such trades might be affected by the finalization of the supplementary leverage ratio (SLR) rule in September 2014.

Continue reading "Credit Market Arbitrage and Regulatory Leverage" »

Posted by Blog Author at 7:00 AM in Financial Markets | Permalink | Comments (1)

January 09, 2017

Trends in Arbitrage-Based Measures of Bond Liquidity



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Corporate bonds are an important source of funding for public corporations in the United States. When these bonds cannot be easily traded in secondary markets or when investors cannot easily hedge their bond positions in derivatives markets, the issuance costs to corporations increase, leading to higher overall funding costs. In this post, we examine recent trends in arbitrage-based measures of liquidity in corporate bond and credit default swap (CDS) markets and evaluate potential explanations for the deterioration in these measures that occurred between the middle of 2015 and early 2016.

Continue reading "Trends in Arbitrage-Based Measures of Bond Liquidity" »

Posted by Blog Author at 7:00 AM in Financial Markets, Regulation, Treasury | Permalink | Comments (1)

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