BofA Sees Fed Assets Surpassing $5 Trillion By End Of 2014... Leading To $3350 Gold And $190 Crude

Yesterday, when we first presented our calculation of what the Fed's balance sheet would look like through the end of 2013, some were confused why we assumed that the Fed would continue monetizing the long-end beyond the end of 2012. Simple: in its statement, the FOMC said that "If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability."

Era of 'jobs-targeting' begins as Fed launches QE3

Quantitative Easing has become banal, a fine-tuning tool like any other. It is by now drained of all drama. Even the Federal Reserve’s hawks have lost the will to resist. Five of the six critics acquiesced.

China launches £94bn infrastructure stimulus package

China's central government is to launch a $150bn (£94bn) spending package on roads and infrastructure projects, joining the country's regions in a blitz of stimulus to keep flagging growth alive.

The latest euro ‘fix’ could be bad news for the US

Investors are finally convinced that the eurozone can be saved. European Central Bank boss Mario Draghi has made it clear that he’ll do ‘what it takes’ to stop the likes of Spain or Italy from going bust, as long as they ask for help. The Germans might throw a spanner in the works later this week. But even if their constitutional court rejects or delays the existing big bail-out fund, chances are another fudge would be hastily pulled together. So the ‘Armageddon’ discount is fading from European assets, which have rallied hard in recent months. That sounds like good news. The trouble is, once investors stop fretting quite so much about Europe, they’ll wake up to the fact that the rest of the world is in a bit of a mess too. And that could be bad news for overpriced shares in the US in particular…

German court backs ESM rescue fund in double-edged ruling

Germany's highest court has cleared the way for ratification of the eurozone bail-out fund but capped German contributions and fired a cannon shot across the bows of the European Central Bank.

Carthaginian terms for Italy and Spain threaten Draghi bond plan

The cold douche begins. Markets will now learn that the European Central Bank's bond plan is a devout wish, not a done deal. Europe's political minefield lies ahead.

Nationalist backlash in Italy and Spain to test Mario Draghi bond plan

The European Central Bank's ground-breaking plan for mass purchases of Spanish and Italian bonds is fraught with political risk and may soon be overwhelmed by nationalist anger in the crisis states, leading economists and statesmen warned at a gathering of the European policy elites in Italy.

Brinkmanship as Spain warns over bail-out terms

Spain has issued a veiled warning that it will not accept a full bail-out from Europe if the terms are too harsh, a move that would paralyse the European Central Bank and call the euro’s survival into question.

U.S. Companies Brace for an Exit From the Euro by Greece

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

Andalusia becomes fourth Spanish region to ask for bailout

Spain's indebted Andalusia region is to seek central government aid with a €1bn (£791m) "advance" to provide liquidity.

Top tax-man suggests Argentines spend vacations in the country, but he prefers Punta del Este

Argentines should stay at home and spend their vacation in Argentina, suggested the head of the tax revenue office, AFIP, arguing in favour of the latest measures severely limiting debit and credit card purchases abroad by charging them an additional 15% expense.

Fed Moves Toward Open-Ended Bond Purchases to Satisfy Bernanke

Federal Reserve Chairman Ben S. Bernanke says the U.S. economy is “far from satisfactory.” His colleagues are moving to embrace policies that will stay in place until he’s satisfied.

How a German court could have a big impact on your wealth

The fate of the euro may not lie in the hands of national governments, or bond markets, or even European Central Bank governor Mario Draghi. Instead, it might all hang on the words of eight judges in Germany.

How to brace your portfolio for a hard landing in China

China bulls used to deny that any sort of economic slowdown was possible for the country. Once it became clear that the economy was indeed slowing down, the bulls said it would be a ‘soft’, well-managed landing. But now that the landing is looking a lot harder than they’d expected, the bullish argument is that there will be a rebound in the second half of 2012. However, the latest data suggests there’s little hope of that either. So just how hard will China fall? And what does it mean for your money?

Technicals flash amber as ECB and Fed struggle to validate rhetoric

Louise Yamada clinched her reputation as America’s oracle of technical analysis with an emphatic sell warning at the top of the Wall Street boom in 2007.

Global crisis moves East as China suffers rapid downturn

China’s industrial output is contracting at the fastest pace since the depths of the global financial crisis, with knock-on effects spreading across the Far East.

China’s fears grow over eurozone crisis

China has expressed deep alarm at the escalating crisis in Europe and warned against austerity overkill as Europe's crumbling demand sends shock waves through Asia.

A Bunch Of Big Advisers At Morgan Stanley Might Leave The Firm For A Totally Embarrassing Reason

This just looks bad on Morgan Stanley. Reuters reports that around 40-48 advisers at the bank (who run tens of billions of dollars) are thinking of leaving the firm because of "widespread technology problems that have made it difficult to do their jobs."

Draghi plan under threat amid EU split

Pressure is mounting on the European Central Bank to water down emergency measures to prop up Spain and Italy, after reports that the chief of Germany’s Bundesbank threatened to quit in protest at the plan.

Fed Chairman Makes Case, in Strong Terms, for New Action

The Federal Reserve chairman, Ben S. Bernanke, delivered a detailed and forceful argument on Friday for new steps to stimulate the economy, reinforcing earlier indications that the Fed is on the verge of action.

It’s time to get rid of central bankers

Today the world’s investors and financial media will be hanging on the words of one man: Ben Bernanke. Everyone’s hoping that the Federal Reserve chief – the world’s most important central banker – will give some idea of whether or not he plans to print more money. This is madness. If there’s one thing that most of us should have learned by now it’s this: central bankers are one of the main causes of today’s economic mess, not the solution to it. Here’s why – and how you can protect your portfolio from their interference…

Deposit flight from Spanish banks smashes record in July

Spain has suffered the worst haemorrhaging of bank deposits since the launch of the euro, losing funds equal to 7pc of GDP in a single month.