Record $253bn in long-dated debt issued this year
International companies and governments worldwide are issuing record sums of long-dated debt as investors bet on decades of low growth and inflation. Exceptionally cheap interest rates on international capital markets as well as plentiful demand for investment assets have encouraged sovereign and corporate borrowers to issue an unprecedented $253bn in long-dated bonds so far this year. That marks a significant jump from the $188bn issued over the same period last year, according to figures from financial data provider Dealogic.
The popularity of long-dated debt suggests that investors believe that global growth will stay stagnant, despite burgeoning expectations that central banks in the developed world are poised to raise interest rates as their economies show signs of strength. Markets, however, appear less convinced. In July, the IMF cut its global growth projection for 2015 from 3.5 to 3.3 per cent, although it maintained that drivers for accelerating economic activity, including lower fuel prices and improving labour market conditions, remain intact. “Borrowers are taking out longer-term debt because yields are very low, and yields are very low because the market is pricing in a prolonged low growth, low inflation environment,” said Alberto Gallo, head of European macro credit at RBS.
“Take corporates. If they believed the economic outlook was positive and markets were distorted you might see them taking advantage by borrowing cheaply and then using that money to invest. But you’re not seeing that. They are issuing the debt and using the money to buy back stocks,” Mr Gallo added. Full Story
Get ready for the forever or 100-year mortgage to debut soon. It will be the dawn of a new era as now one generation will legally find a way to enslave the next generation. Corporations will start exploring options for issuing 100-year bonds because they know rates won’t be this low forever. What better way to lock in ultra-low rates for a generation, then by selling crap to the public and paying rates that will one day appear to be insanely cheap? Don’t fight the Fed’s is a very valid saying, for its dam true. This is valid because of the masses; the masses believe the Feds, and their government can take care of all their problems even if it means being robbed day and night.
China caught the US ‘with our pants down’ — and the Obama administration is struggling to respond
Two months after the Office of Personnel Management (OPM) discovered that it had suffered a massive data breach, the Obama administration is trying to figure out how best to retaliate against the prime suspect — China — without escalating the cyberwar. “In a series of classified meetings, officials have struggled to choose among options that range from largely symbolic responses — for example, diplomatic protests or the ouster of known Chinese agents in the United States — to more significant actions that some officials fear could lead to an escalation of the hacking conflict between the two countries,” The New York Times reported last week.
US President Barack Obama is asking for a creative response. But cybersecurity expert Dave Aitel, CEO of Immunity Inc., thinks the government would be better off focusing its energy and resources on securing its vulnerable systems rather than on retaliation. “If you want to disrupt and deter people from hacking OPM, all you have to do is properly secure it,” Aitel told Business Insider.”We lost a lot of really valuable information, but we have to remain the adults in the room.”
In hacking the OPM, Chinese hackers diverged from their pattern of stealing intellectual property and defense secrets. Instead they targeted information that would enable them to build a database of US diplomats, intelligence operatives, and those with business in China.”The government just has to secure its systems and move on,” Aitel added, especially since the OPM hack was technically fair game. Full Story
If the pants were off, was the underwear on at least. If not, that is truly unbecoming. Expect more hacks and the next time if nothing is done, they will catch us with our knickers in a knot. Why is the government not securing these networks? They continue to receive failing grades.
The suspected Chinese hack on United Airlines just made the CIA’s job ‘much more difficult’
The Chinese hackers that stole the personally identifying information of more than 20 million people from the Office of Personnel Management (OPM) last year also hacked into United Airlines, Bloomberg reports. And Dave Aitel, CEO of cybersecurity firm Immunity, Inc., notes that the hackers’ breach of United is especially significant as it’s the main airline in and out of Washington, DC’s Dulles International — the nearest international airport to the CIA’s headquarters in Langley, Virginia.
“Every CIA employee and visitor coming from abroad flies in and out of Dulles, and chances are they’re flying United,” Aitel told Business Insider. “The combination of information [the hackers] obtained from OPM with the travel information they now have from United is hugely powerful” for the Chinese, Aitel said, “and it will make the kind of work the CIA does much more difficult.” Mike Oppenheim, the manager of threat intelligence at the cybersecurity firm FireEye, told the New York Times that Beijing is building “a massive database of Americans, with a likely focus on diplomats, intelligence operatives and those with business in China.”
The OPM hack — described by top counterintelligence official Joel Brenner as a “significant blow” to American human intelligence — has the CIA especially worried about American spies working in Beijing with diplomatic cover, sources told the Times. This “other information” — such as stolen medical and financial records — may now include US intelligence officials’ travel itineraries from the world’s second-largest airline. Full Story
Our overly brilliant government still thinks that big guns will win any war. If you shut down the Grid and financial markets, you can bring any nation to its knees without firing a shot. Putin and China are focusing on delivering crippling blows without spending billions. The best cyber warfare team is in Russia, and China is doing its best to take the second spot.
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