Thursday, May 28, 2015

Eurodollar Market, FDIC Reports 7% Increase In Bank Income & Survey Says Americans Unprepared For Economic Downturn

Fed Publishes A Primer On the Eurodollar Market
FDIC Publishes The Quarterly Banking Profile
Fed Publishes The 2014 Survey of Household Economics and Decision-making 

Liberty Economics, the research leg of the New York Federal Reserve, published a post titled The Eurodollar Market in the United States. It provides insight into the Eurodollar market and is a great primer for anyone looking for some background into the market. This comes months before the release of a new rate that will be based on both federal funds and Eurodollar transactions as reported on the FR 2420 Report of Selected Money Market Rates. The rate is expected to provide a broader measure of overnight funding costs for U.S.-based banks as a complement to the fed funds rate.

The FDIC released the Quarterly Banking Profile and it shows a marked improvement in the industry, with a 6.9% increase in net income, and a 2.6% increase in net operating revenue. Community banks lead the industry on net income growth of 16% over last year. Net interest margin continues to struggle, falling 3.02% in the quarter.

The Federal Reserve Board published the 2014 Survey of Household Economics and Decision-making. The survey provides information about how Americans view their economic security. According to the survey, 65% of respondents feel their families are "doing okay" or "living comfortably" financially, 29% say they expect household income to be higher next year. The results also suggest, as can be seen in the video to the left, that many Americans are not prepared for a financial crisis or retirement. Over 5,800 people completed the survey which was conducted in October and November of 2014.

If you like what you're reading, please join my mailing list to receive blog posts and updates as they occur. If you're an investor with all of your assets tied up in the stock market and cash, you might want to consider a few diversification strategies. Gold is the oldest asset in the world and it's inflation proof. Bitcoin is the gold standard for the cryptocurrency world, which is the fastest growing asset class in the world. Diversifying your portfolio into one or both of these assets can help to insure your portfolio against a stock market crash or inflation. Most importantly, it can help to safeguard the gains you've made over the last 10 years.

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