Investors should buy September Eurodollar futures contracts because the recent increase in the rate banks say they pay for three-month loans in dollars may have gone too far, according to JPMorgan Chase & Co.
Clients of the largest U.S. banks withdrew funds this month at the fastest weekly pace since the Sept. 11 attacks as a deposit-insurance program ended and customers tapped into their year-end cash hoards.
The market for borrowing and lending U.S. government debt, after shrinking 31 percent in the past five years, risks contracting further as global regulators consider raising capital and leverage standards for banks.
Almost two decades after advising the U.S. to sell floating-rate notes to lower debt expenses, Campbell Harvey says starting to issue the securities now would be a costly mistake for American taxpayers.
Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.