Federal Reserve Eyes End of Bond Buying

Fed Reserve Chairman Ben Bernanke told WSJ that the central bank could start winding down its $85 billion-a-month bond-buying program later this year and end it altogether by mid-2014, setting up a high-stakes test to see if the economy and financial markets can begin to stand on their own.

Financial markets—which have been enlivened by the fuel of the Fed's easy-money policies—didn't take the news happily. The Dow Jones Industrial Average finished the day down 206.04, or 1.35%, at 15112.19. Yields on 10-year Treasury notes jumped 0.126 percentage point to 2.308%, the highest level since March 2012. The dollar strengthened. Behind the Fed's strategy for unwinding its bond-buying program were its optimistic new economic forecasts for next year, including a projection that the jobless rate, which was 7.6% in May, will fall to between 6.5% and 6.8% by the end of 2014.

Read more at http://online.wsj.com/article/SB10001424127887324577904578555562630037552.html

Weak Bond Trading at Jefferies Prompts Wider Concern

From NY Times’ Dealbook: Jefferies’s second-quarter fixed-income revenue fell 27 percent.

The recent turbulence in the markets has already taken its toll on one Wall Street firm.  Now, investors and analysts are trying to gauge whether other investment banks have been hurt by turmoil in the bond markets.

Though Jefferies is not as large as Goldman Sachs or JPMorgan Chase, it is an experienced bond-trading firm that weathered the severe storms that have buffeted markets since the financial crisis of 2008. It was no surprise, then, that Wall Street shuddered a little after Jefferies reported second-quarter fixed-income revenue that was down 27 percent from a year earlier.

More? Check out http://dealbook.nytimes.com/2013/06/18/weak-bond-trading-at-jefferies-prompts-wider-concern/

The Robots Are Coming! Five Ways To Protect Your Job

Watch any old sci-fi movie, and the future is invariably depicted as a place full of helpful, hard-working robots, busying themselves with the household chores, while the humans sit around mixing cocktails and enjoying themselves. Funny, it never seemed to materialize. If anything, we all seem to be working harder than ever, tied to our smartphones and e-mail.

Finally, however, the advances in artificial intelligence are so rapid and so significant that robots may finally make their way in everyday life. Such as? Google is working hard on its driverless car. Samsung has launched a robotic vacuum. At the same time, robots and machines are quickly learning how to perform simple surgical operations, process basic legal documents, teach people how to speak a foreign language, and even write articles (although not as well as humans, I hasten to add).

In a new book called “Robot Futures,” Illah Reza Nourbakhsh, the professor of robotics at Carnegie Mellon University, imagines a near future where whole swathes of traditional jobs are taken over by machines.  And a report this month by the McKinsey Global Institute argued that automation of knowledge work and advanced robotics were among the key disruptive technologies transforming the global economy…

http://www.marketwatch.com/story/5-ways-to-protect-your-career-from-the-robots-2013-06-19

News You Can Use: Working From Home? Boss May Be Spying on You

Even if you are thousands of miles away from the office and wearing your pajamas, your boss could still be watching you just as closely as if you were sitting in the next cubicle over.  Some companies are monitoring employees' every keystroke no matter where they are working, and that's leading to more than just sniffing out who is stealing company secrets. It's also giving some employers a pretty good idea of whether their remote workers are keeping as busy as the ones who are sitting in the cubicle farm….

The growing ability to watch workers' every move comes as some companies appear to be growing more accepting of telecommuting, both as a way to keep employees happy and as a way to keep office costs down. About 13.4 million people, or about 9.5 percent of workers, were working from home at least some of the time in 2010. That's up from about 9.2 million workers in 1997, according to the Census Bureau…

http://www.cnbc.com/id/100826081

Erdogan Casts Bankers as Villain of Turkish Protests

From Bloomberg:  As Turkey’s government seeks to rally support by identifying culprits behind the unprecedented explosion of anger that erupted in recent weeks, one group has featured on almost every list: bankers.

Prime Minister Recep Tayyip Erdogan began blaming a so-called “interest-rates lobby” in the first week after anti-government protests spread nationwide on May 31. Economy Minister Zafer Caglayan said “blood-sucking” financiers, seeking to push Turkey’s interest rates back up, helped provoke the movement that ignited over a police crackdown against people opposed to development plans.

The rhetoric resonates in a majority Muslim country where many remember skyrocketing borrowing costs that undermined the economy in the pre-Erdogan decade. In 2001, the year before his party came to power, the government spent more on interest payments than it earned in tax income. In the last two years the Islamist-rooted Erdogan, 59, and his ministers have frequently accused a rates lobby of working to undermine the economy....

Read al about it at http://www.bloomberg.com/news/2013-06-19/erdogan-casts-bankers-as-villain-of-turk-protest-boosting-yields.html

THE ONION: Financial Sector Thinks It’s About Ready To Ruin World Again

Claiming that enough time had surely passed since they last caused a global economic meltdown, top executives from the U.S. financial sector told reporters Monday that they are just about ready to completely destroy the world again.

Representatives from all major banking and investment institutions cited recent increases in consumer spending, rebounding home prices, and a stabilizing unemployment rate as confirmation that the time had once again come to inflict another round of catastrophic financial losses on individuals and businesses worldwide.

“It’s been about five or six years since we last crippled every major market on the planet, so it seems like the time is right for us to get back out there and start ruining the lives of billions of people again,” said Goldman Sachs CEO Lloyd Blankfein. “We gave it some time and let everyone get a little comfortable, and now we’re looking to get back on the old horse, shatter some consumer confidence, and flat-out kill any optimism for a stable global economy for years to come….”

Think that’s about as perfect as the Onion gets?  Wait…wait…there’s more at http://www.theonion.com/articles/financial-sector-thinks-its-about-ready-to-ruin-wo,32865/

Hedge Fund Managers Didn’t Know They Were Paying For Their Inside Information

Dealbreaker’s Matt Levine reports: You’re only guilty of criminal insider trading, in America,1 if: you trade on information that is material and nonpublic, and some other stuff.  The other stuff is mostly stuff that only a lawyer could love, but man do they love it. It consists most importantly of the rule that the person who gives you the material nonpublic information needs to have done so in breach of some duty to keep the information secret and in order to get some personal benefit for himself. If a stranger just wanders up to you and says “I’m the CEO of Smerbafife and it’s a giant fraud, gotta go,” and you trade on that: you’re probably good.

This doesn’t help very often, though, since the personal benefit for the tipper doesn’t have to be an explicit bribe, or an explicit anything; just a desire to spice up your friendship with some material nonpublic information can qualify. It might help Anthony Chiasson and Todd Newman though….

Sound like a technicality?  Find out more at http://dealbreaker.com/2013/06/hedge-fund-managers-didnt-know-they-were-paying-for-their-inside-information/#more-105715