Obama administration officials yesterday rejected calls to release Fannie Mae and Freddie Mac from government control, signaling that it could be up to the next president or Congress to resolve the mortgage giants’ fate. For the past year, a coalition of investment firms and affordable-housing advocates has pressed the administration to privatize Fannie and Freddie, which have been under government conservatorship since being rescued during the financial crisis in 2008. (WSJ)
Capital outflows from China topped $500bn in the first 8 months of the year, according to new calculations by the US Treasury that highlight the shifting fortunes in the global economy. The outflows, which peaked in August, have also contributed to a shift in Washington's valuation of the Chinese yuan - Treasury officials are cautiously welcoming the People's Bank of China's heavy spending to prop up the currency. (FT)
The Federal Reserve has now held interest rates steady at zero for 81 months, even longer than the depression era. Bond market investors are betting that this unwelcome record will be extended beyond next March. The divergence between the Fed's own forecasts and interest rate futures continues to widen, suggesting either further embarrassment to the Fed, or an unpleasant and potentially destabilizing shock to markets later this year. (FT)
Finally, we’re in the thick of earnings season: IBM and Morgan Stanley disappointed yesterday, but there’s some tech heavyweights to come: On Wednesday, eBay will announce results for the first time since it spun-off PayPal, and Thursday will see Microsoft, Amazon, and the company formerly known as Google (now under the Alphabet umbrella) all report.