Strange Headlines & Possible Panic In A Major Global Market

"...Bizarre Headline #1 – Our friend, Wall Street icon, Jeff Saut of Raymond James wrote yesterday that we seem to be living in a "Bizarro World" where everything is opposite of normal expectations.  He began his piece with this very apt quote from the HBO series The Newsroom:

 

We stood up for what was right. We fought for moral reasons. We passed laws, struck down laws for moral reasons. We waged wars on poverty, not poor people. We sacrificed, we cared about our neighbors, we put our money where our mouths were and we never beat our chests. We built great big things, made ungodly technological advances, explored the universe, cured diseases, and cultivated the world’s greatest artists and the world’s greatest economy. We reached for the stars, acted like men, we aspired to intelligence, we didn’t belittle it, and it didn’t make us feel inferior. We didn’t identify ourselves by who we voted for in the last election and we didn’t scare so easy. We were able to be all these things and do all these things because we were informed, by great men, men who were revered.

 

                            . . . Jeff Daniels, delivering a biting soliloquy on American decline (HBO’s The Newsroom)

 

In the last few days, I've seen several headlines that certainly seemed bizarre to me.  Here is one from today's Financial Times:

 

Fed looks at exit fees on bond funds

Federal Reserve officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors, underlining concern about the vulnerability of the $10tn corporate bond market.

Officials are concerned that bond funds are becoming “shadow banks”, because investors can withdraw their money on demand, even though the assets held by the funds can be hard to sell in a crisis. The Fed discussions have taken place at a senior level but have not yet developed into formal policy, according to people familiar with the matter.

 

Considering surcharge to prevent panic withdrawals?  What kind of panic might start if word leaks out before the surcharge is set.

 

Bizarre Headline #2 – Also from the FT:

 

Central banks shift into shares as low rates hit revenues

Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions.

“A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.

Central banks are traditionally conservative and secretive managers of official reserves. Although scant details are available of their holdings Omfif’s first “Global Public Investor” survey points out they have lost revenues in recent years as a result of low interest rates – which they slashed in response to the global financial crisis.

The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold, held by 400 public sector institutions in 162 countries.

 

And Michael Lewis thinks markets are rigged by high frequency trading.

 

There are several more weird headlines but they will have to wait for another day."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/17_Strange_Headlines_%26_Possible_Panic_In_A_Major_Global_Market.html