<Click on graphic for larger image> The Telegraph – Fitch reveals the $2trillion black hole in China’s economy that heralds a lost decade Bad debts in the Chinese banking system are ten times higher than officially admitted, and rescue costs could reach a third of GDP within two years if the authorities let the crisis fester,… Continue reading Estimating China’s Real Debt Figures
<Click on graphic for larger image> The Wall Street Journal – The Ted Spread Is Dead, Baby. The Ted Spread Is Dead A measure of stress in financial markets, whose alarm bells heralded the 2008 financial crisis, just hit its highest level in over seven years. But don’t worry. It turns out the so-called Ted Spread might… Continue reading The TED Spread Is Broken
<Click on graphic for larger image> The Wall Street Journal – Jobs Recovery Reaches Plateau, Posing a Challenge for Forecasters After a half-decade of steady gains, the U.S. labor market appears to be leveling off. What that plateau means for the economy’s trajectory is one of the biggest questions hanging over policy makers and investors.… Continue reading More On The Jobs Market
Bloomberg Business – The ECB Starts to Make Post-Brexit Contingencies With Rule Change on Banknotes Central bank introduces discretionary powers against printers located outside EU. While it seems reasonable that the ECB wants printers of its banknotes to be located in the European Union, the timing of this rule change can only be seen in the context… Continue reading Brexit Forces Rules Changes
<Click on graphic for larger image> Bloomberg Business – TIPS for Losers No More as Gundlach Warms to Inflation Bonds DoubleLine chief says TIPS are becoming more attractive Jeffrey Gundlach hasn’t had many kind words for peers who piled into inflation-linked bonds in the years following the financial crisis, famously calling them investments “for losers” as recently… Continue reading Gundlach Likes TIPS
<Click on graphic for larger image> The Wall Street Journal – Bank of Japan Tries Another Way to Spur Inflation Japan’s central bank has accepted defeat on its fundamental strategy: influencing consumer expectations. The Bank of Japan ’s policy shift last week shows the theory that has underpinned Gov. Haruhiko Kuroda’s 3½ years at the… Continue reading The BoJ’s Search For Inflation
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The Wall Street Journal – How Bond Yields Got This Low The yield on the 10-year U.S. Treasury note hit an all-time low in July, as other bond yields across the developed world plunge. Why are we here and where are we going? <Click on graphic for larger image> <Click on graphic for larger image>… Continue reading Measuring Low Yields
<Click on graphic for larger image> The Economist – Buttonwood: Take cover An anomaly that shows markets are not as liquid as before THE most dangerous words in finance are: “This time is different.” But sometimes markets can genuinely change. After the 2007-08 financial crisis, markets are less efficient and liquid than before. The evidence… Continue reading Market Liquidity
<Click on graphic for larger image> Bloomberg.com – Greenspan Warns Bond Rally Untenable as Bill Gross Says Go Long Treasury 10-year note yield falls to lowest level in two weeks Former Fed chair sees ‘classic case of a peak’ after bull run A day after Bill Gross said central-bank support limits the downside for long-term… Continue reading Two Views On Rates
<Click on graphic for larger image> The Economist – The global economy: The low-rate world Central banks have been doing their best to pep up demand. Now they need help All this may seem unlikely to happen. Central banks have had to take on so much responsibility since the financial crisis because politicians have so far… Continue reading A Low Rate World
The Financial Times – Doves ascendant in Janet Yellen’s Federal Reserve US central bank is on track for its shallowest rate-lifting cycle in modern times In the face of strident calls for higher rates from a vocal minority of policymakers, the Federal Reserve once again held short-term interest rates unchanged on Wednesday. The decision means that, having… Continue reading Doves In Charge