22 posts from "February 2016"
February 29, 2016
The “Cadillac Tax”: Driving Firms to Change Their Plans?
Since the 1940s, employers that provide health insurance for their employees can deduct the cost as a business expense, but the government does not treat the value of that coverage as taxable income.
February 26, 2016
From the Vault: The Path of Interest Rates
Numerous posts in the Liberty Street Economics archive cover the measurement and dynamics of the natural rate of interest as well as its use as a benchmark for calibrating monetary policy settings.
February 25, 2016
Just Released: Five New Data Series on Consumer Expectations
Today, the New York Fed is introducing a number of new data series and interactive charts reporting findings from its Survey of Consumer Expectations (SCE).
February 24, 2016
The Graying of American Debt
The U.S. population is aging and so are its debts. In this post, we use the New York Fed Consumer Credit Panel, which is based on Equifax credit data, to look at how debt is changing as baby boomers reach retirement age and millennials find their footing. We find that aggregate debt balances held by younger borrowers have declined modestly from 2003 to 2015, with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt. Debt held by borrowers between the ages of 50 and 80, however, increased by roughly 60 percent over the same time period. This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective as consumer debt payments are being made by older debtors than ever before.
February 22, 2016
Whither Mortgages?
Our most recent Quarterly Report on Household Debt and Credit showed that although total household debt has increased somewhat since 2012, that growth has been driven almost entirely by nonhousing debt—credit cards, auto loans and student loans.
February 19, 2016
Did Third Avenue’s Liquidation Reduce Corporate Bond Market Liquidity?
Tobias Adrian, Michael J. Fleming, Erik Vogt, and Zachary Wojtowicz The announced liquidation of Third Avenue’s high-yield Focused Credit Fund (FCF) on December 9, 2015, drew widespread attention and reportedly sent ripples through asset markets. Events of this kind have the potential to increase the demand for market liquidity, as investors revise expectations, reassess risk […]
Quantifying Potential Spillovers from Runs on High-Yield Funds
On December 9, 2015, Third Avenue Focused Credit Fund (FCF) announced a “Plan of Liquidation,” effectively halting investor redemptions.
Posted at 7:00 am in Financial Institutions, Financial Markets, Fire Sale, Liquidity | Permalink | Comments (1)
February 18, 2016
Are Asset Managers Vulnerable to Fire Sales?
According to conventional wisdom, an open-ended investment fund that has a floating net asset value (NAV) and no leverage will never experience a run and hence never have to fire-sell assets.
Posted at 7:00 am in Corporate Finance, Financial Institutions, Fire Sale, Systemic Risk | Permalink | Comments (5)
February 17, 2016
High-Frequency Cross-Market Trading and Market Volatility
The close relationship between market volatility and trading activity is a long-established fact in financial markets.
February 16, 2016
The Workup, Technology, and Price Discovery in the Interdealer Market for U.S. Treasury Securities
The interdealer market for Treasury securities shares many features with other highly liquid markets that trade electronically using anonymous central limit order books.
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