Tuesday, June 21, 2016

What The Fed Meeting With Banks Today Tells Us About Brexit

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*Fed Governor Jerome Powell, who is tough on banks, meets with banks today to collaborate.
*They are discussing the need to have an alternative to LIBOR.
*The discussion reminds us that the financial system is ever connected and fragile.

The Alternative Reference Rates Committee (ARRC) meets today at 2:30 PM. The meeting is with the Fed and many banks and exchanges to discuss a way to create a new rate system that can sidestep LIBOR (We list the participants at the end of this report).
Although this meeting is not focused on the upcoming vote in the UK, we think this meeting is a timely reminder to understand the importance of the UK financial system to the world. Either outcome of Brexit could swing the stock market (NYSEARCA:SPY) based on the amount of global financial players that are involved.
LIBOR liquidity risk
In their interum report the ARRC said they have, "recognized that the secular decline in wholesale unsecured short-term funding by banks poses serious structural risks for unsecured benchmarks such as LIBOR, Euribor, and TIBOR."

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principle especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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