The Wall Street Journal – Debt-Ceiling Fights Make Government Borrowing Even More Expensive Than We Thought Another political standoff over the country’s debt limit could have a significant impact on the government’s cost of borrowing, according to new research from Federal Reserve economists. The last two debt-limit fights on Capitol Hill, in 2011 and 2013,… Continue reading The Cost Of A Debt Ceiling Battle
OPEN Net Positions – Growing Influence of U.S. Shale in Global Oil Markets Welcome to our new product, Net Positions. It is a short webcast explaining some of our recurring themes and ideas. We hope to make this a regular product available to those who subscribe to our conference calls. Comment In our latest webinar,… Continue reading Growing Influence of U.S. Shale in Global Oil Markets
Bloomberg – Biggest Bond Traders Say Waning Reflation Bets No Barrier to Fed For two of the biggest private holders of Treasuries, bond-market signals in the past week are nothing but noise when it comes to betting on the Federal Reserve. Goldman Sachs Asset Management and Vanguard Group Inc., which oversee a combined $5 trillion, say… Continue reading Investors Pricing in Reduced Uncertainty, But Not Necessarily Stronger Growth
Financial Times – EM hit as Brazil bears brunt of investor unease A new corruption scandal in Brazil sliced more than 7 per cent off the value of the real, as emerging market currencies suffered from investor unease over China as well as US economic prospects in relation to Donald Trump’s troubled presidency. Investors have this… Continue reading Emerging Markets Juggernaut Looks Past Brazil
Comment As the chart above shows, the probability of a June hike has been locked in around 100% since the May 3 FOMC meeting. The only thing that changed this was the 370 point DJIA drop on Wednesday. And now that the markets appear to be stabilizing, the probability has returned to near 100%. This… Continue reading Odds Of A June Rate Hike At 98% Once Again
Comment The Citigroup Surprise Index is a rolling 3-month average of selected economic statistics that Citi believes are significant. Bloomberg is a rolling 6-month average of pretty much every economic statistic available. The differing construction, and especially the length of the rolling averages used, explains the difference between the two. Because Citi uses a… Continue reading U.S. Citi Economic Surprise Index Is Near Its Worst Level Since October
CNBC – Bitcoin hits $1,900 to reach record high with market cap up $4 billion this week alone Japan and Korea are driving trade, with political uncertainty and debate over the future of bitcoins underlying technology boosting investor sentiment. Bitcoin broke through the $1,900 mark for the first time on Friday, hitting an all-time high,… Continue reading Bitcoin Reaches Another Record High
The St. Louis Federal Reserve – The Growing Skill Divide in the U.S. Labor Market One way to see evidence of job polarization is to look at employment growth in certain occupational classifications. The figure below divides occupational employment growth into four groups: – Cognitive Nonroutine: managers, computer scientists, architects, artists, etc. – Manual Nonroutine:… Continue reading The Growing Skill Gap
Financial Times – The Big Green Bang: how renewable energy became unstoppable After years of hype and false starts, the shift to clean power has begun to accelerate at a pace that has taken the most experienced experts by surprise. Even leaders in the oil and gas sector have been forced to confront an existential question:… Continue reading Going Green
Bloomberg Business – Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising? Last but not least is the theory that bigger wage increases will begin to appear soon—the forces of supply and demand can’t be denied. Last year, Federal Reserve Board Principal Economist Jeremy Nalewaik released a paper called Non-Linear Phillips Curves With… Continue reading Wage Growth
The Financial Times – Investors face the ‘buy the dip’ dilemma Political risk takes centre stage as cracks emerge in global growth story Among the ranks of asset classes, equities are usually the last to leave a market party. Now, as the music fades, US and global investors face a dilemma. Some might well… Continue reading Buy The Dip?
The Economist – The world is more stable than the news suggests But fragility increased in some unexpected places last year according to a new index The index is perhaps most valuable as an early-warning signal for potential conflict. For that, what matters are changes from year to year, rather than long-lasting differences between… Continue reading World Fragility Index