John At The Center

The fact is that states are not going to declare bankruptcy, and they’re not even going to be allowed to declare bankruptcy. So the worst thing that can happen, for the municipal bond market, is that people continue to talk about municipal bankruptcy for the next couple of years. Let’s take the option off the table, once and for all, rather than taking it seriously and thereby only making it harder for states to borrow the money they need.

via The metastasizing state-bankruptcy meme | Analysis & Opinion |.

It is not easy to see how the Chinese government managed to keep its currency from rising more rapidly against the dollar if it did not continue buying Treasuries in 2010, and there has been speculation that it shifted purchases to accounts managed by British money managers.

If so, such purchases would show up as British purchases. As it turns out, Britain is estimated to have been the largest purchaser of Treasuries over the 12-month period, adding $356 billion to its holdings. That made it by far the largest buyer, followed by Japan. The only other major seller during the period was Russia, according to the government estimates.

If China has been buying through money managers, it may be easier at some point for it to begin selling Treasuries through the British channel without others understanding where the selling pressure is coming from.

via China May Be Masking Its Purchase of U.S. Securities – NYTimes.com.

This theme has been emphasized by the PayPal co-founder Peter Thiel in his public talks and by the economist Michael Mandel in his writings. And I’ve stressed it in a recent e-book, “The Great Stagnation.”

via Incomes Are Stuck on Technology’s Plateau – NYTimes.com.

Trading firms aren’t used to losing, be it in the stock market or the job market.A career in the trading industry can be a tough sell to the blue-jeaned, tech-savvy crop of graduates expecting to flock into Silicon Valley’s start-ups and technology giants. Still, as technology becomes increasingly important to Wall Street, securing the computer programmers and software engineers who harness it best has become a priority.So high-frequency trading and electronic market-making firms are stepping up their recruiting game, offering competitive salaries and sweetening their perks in an effort to lure the top talent.Employees at the Chicago …

via Wall Street Battles Silicon Valley for Tech Geeks – WSJ.com.

“I’ve encountered a huge amount of interest over the last year in shorting China,” says someone based in Asia who advises hedge funds on the country. But because short-selling is mostly prohibited in mainland China, it is only practical to bet against the shares of those mainland companies that are listed offshore, mainly in Hong Kong and New York.

via Shorting China: Waiting for the great fall | The Economist.

The Fintech Innovation Lab is focused on “entrepreneurs and early stage companies that are developing cutting edge technology products targeted at financial services customers.”

Here’s the cool thing. The customers are participating in this program. The CTOs and CIOs of firms like Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley, State Street, and UBS will be participating in this program.

via A VC: Calling All Fintech Entrepreneurs.

Amateurs in blue, pros in peach. Click to enlarge.

via Apples blow-out quarter: The bloggers called it, the Street blew it – Apple 2.0 – Fortune Tech.

These markets should not exist unless the kind of information made available for a public company is made available for private companies or only investors who can truly assess the risks should be allowed to participate. This is a real debate and should spur a rethinking of how we want these markets to be regulated.

via Why Did Goldman Blink on Facebook Investment? – NYTimes.com.

It may be debatable whether Schwab lied to investors about the fund. But it is clear that it misled them about a crucial aspect of the fund’s investments. As the financial crisis was growing, Schwab decided that a security’s maturity was not, as it previously said and as any normal person would think, the date a security was scheduled to mature. Instead, it decided that a security that would mature in 20 years, but whose interest rate was reset every month, had a one-month maturity.

via Charles Schwab’s YieldPlus Fund Offered a Losing Bet – NYTimes.com.

“Were preparing for the day when renminbi becomes fully convertible,” Li Xiaojing, general manager of Bank of Chinas New York branch, told The Wall Street Journal. He said the banks goal is to become “the renminbi clearing center in America.”

via New Move to Make Yuan a Global Currency – WSJ.com.