As I’ve mentioned before, a big jump in interest rates could create chaos for the holders of many MBS [1] derivatives. Here is an example of how just a small rate rise caused turmoil: Analysis: Bank of America’s interest-rate exposure may be worse than rivals. [2]
Do Western Central Banks Have Any Gold Left? Part III [3]
Detroit files for bankruptcy protection [4]. (Is it just a coincidence that all of the city’s mayors for the past 50 years have been Democrats?)
Speaking of Detroit, Commander Zero had some quite wry commentary [5]. (Thanks to Gil in Montana for the link.)
Items from The Economatrix:
Fitch Downgrades European Financial Stability Facility To AA+ [7]
Weak Retail Sales Means Fed Tapering Later vs. Sooner [8]. [JWR’s Comment: Don’t hold your breath. Ben is very unlikely to give up QE [9] before he leaves his post in December. Nor is his successor. Free money is the world’s most addictive drug.]