Weekly Credit Graph Packet – 10/26/09

Posted on October 26, 2009 @ 11:31 am (Monday) by WARREN MOSLER

The great repricing of risk has brought us to this point and volatility seems to be settling in at lower levels as well.

So where are we?

Due to funding risks, spreads are now at levels where they need to be to provide risk adjusted returns on capital for banks to approximately represent returns on capital needed for banks to attract that capital.

For example, if a bank obtain assets that earn 2% (after expenses) above it’s funding costs, and in today’s market regulators target a 12% tier one capital ratio, the return on capital is a little over 15%.

In the past, banks struggled to make this kind of spread as they were competing with non banks that could leverage higher than that, supported by investors willing to accept much lower risk adjusted returns, and also supported by banks willing to work for lower risk adjusted returns in their higher leverage off balance sheet entities.

Credit Graph Packet

[top]

Rasmussen Poll and deficit reduction

Posted on October 26, 2009 @ 8:22 am (Monday) by WARREN MOSLER

[Skip to the end]

Don’t underestimate the power of public opinion on Congress.

Deficit myths remain public enemy number one.

Daily Presidential Tracking Poll
Saturday, October 24, 2009

The Rasmussen Reports daily Presidential Tracking Poll for Saturday shows that 30% of the nation’s voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty percent (40%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -10 (see trends).

Thirty-eight percent (38%) of voters say deficit reduction is the top priority for Washington to obtain while 23% say health care is most important. Among Democrats, health care is most important. Among Republicans and unaffiliated voters, health care is fourth on the priority list.

Check out our review of last weekâ€™s key polls to see â€œWhat They Told Us.â€

The Presidential Approval Index is calculated by subtracting the number who Strongly Disapprove from the number who Strongly Approve. It is updated daily at 9:30 a.m. Eastern (sign up for free daily e-mail update). Updates also available onTwitter and Facebook.

Overall, 47% of voters say they at least somewhat approve of the President’s performance. Fifty-one percent (51%) disapprove.

Tracking poll data shows that just 56% of conservatives consider themselves Republicans. Separate polling shows that 73% of GOP voters say Congressional Republicans have lost touch with the party’s base.