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Banks must take risks

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The few spatters of economic data this week did not change the plod-along U.S. outlook. Meanwhile the priority story (Europe) was obscured by the media's demented focus on the Facebook IPO and the blown trade at Chase. Today markets are on exhausted hold, hoping for some miracle at this weekend's G-8 meeting. German 10-year bunds hit all-time-low yields on successive days this week, the bottom at 1.41 percent while Spanish and Italian equivalents reached 6.38 percent and 5.91 percent, respectively. The U.S. 10-year fell to its all-time low, 1.70 percent.Inflation and deflation camps have been in balanced argument ever since Lehman, as have dollar-fearful and dollar-safe-haveners, but Europe has now tilted the show to deflation: gold has dropped from $1,790 an ounce to $1,590. Those still fearing inflation ran to dollar-denominated inflation-protected Treasurys (TIPS), driving the newest auction to a negative 0.391 percent yield. Yup, below zero: lose money to be ready for a...