The Financial Times – When words fail — how the Fed’s talk can be too cheap Central bank communication, or miscommunication, is a running sore with investors. The US Federal Reserve has sought to guide markets and keep volatility contained. however a variety of views from officials often sparks bouts of market tension. This reflects… Continue reading Understanding Fedspeak
Brookings Institute – Ben Bernanke: The latest from the Bank of Japan The Bank of Japan’s (BOJ) policy announcement today had two main parts. First, the BOJ committed itself to continue expanding the monetary base until the inflation rate “exceeds the price stability target of 2 percent and stays above the target in a stable… Continue reading The BoJ’s Latest Announcement
The Financial Times – ECB fears legal action will rein in scope for QE Officials at the European Central Bank fear they could be hemmed in by legal action as they look for ways to extend their quantitative easing programme to help fuel the eurozone’s fragile recovery. The €80bn-a-month bond buying plan is already the… Continue reading Are Central Banks Running Out Of Assets To Buy?
The Wall Street Journal – Greg Ip: Central Bank Tools Are Losing Their Edge Central banks have shown the will to hit their growth and inflation targets. But do they have the way? That question is more pointed after the Bank of Japan on Wednesday announced two new central bank firsts. It now wants inflation not… Continue reading Are Central Banks Running Out Of Ideas?
<Click on graphic for larger image> The Financial Times – Global watchdog warns over China’s debt levels China’s debt has grown to alarming levels, according to new data from the Bank for International Settlements that highlight a big potential risk to the global economy. What the BIS terms the country’s “credit gap” is now three… Continue reading Chinese Debt Concerns
<Click on graphic for larger image> TCW – Trading Secrets: Twilight of the Central Bankers While every asset price cycle is different, they all end the same way: in tears. As obvious as this truth is to investors, when the sad end to the credit cycle comes, it always comes as a big surprise to… Continue reading A Look At Asset Bubbles
The New York Times – We Gave Four Good Pollsters the Same Raw Data. They Had Four Different Results. You’ve heard of the “margin of error” in polling. Just about every article on a new poll dutifully notes that the margin of error due to sampling is plus or minus three or four percentage points.… Continue reading Polls Are Only As Good As The Assumptions That They Are Based On
MoneyBeat (WSJ Blog) – Foreign Central Banks Keep Selling U.S. Treasurys Foreign central banks shed U.S. Treasury debt holdings at the fastest pace in more than a year, joining hedge funds and money managers in fueling the recent bond-market selloff. Holdings by these government institutions fell $27.5 billion to $2.827 trillion for in the week… Continue reading Foreign Treasury Selling Intensifies
<Click on graphic for larger image> Bloomberg.com – Trend-Following Quants Go From Hero to Goat as Rate Bets Blow Up For once, the trend was nobody’s friend. Commodity trading advisers, the catch-all phrase for a breed of quantitative investors who use trends in asset prices and volatility as trading signals, posted some of the hedge… Continue reading Quant Funds – The Trend Is Your Friend Until The Bend At The End
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Charts of the Week Topics Covered This Week Include: Election Update Election Update – 2 Diving Into Last Week’s Inflation Number Flow of Funds Household Net Worth Cash On The Sidelines Japan Overhauls Its Monetary Policy The Fed Meeting Is The Tightening For The Fed? Your Daily Installment On Poor Hedge Fund Performance Hedging Costs… Continue reading Charts of the Week
<Click on chart for larger image> Bloomberg Busineess – Fed Focus Turns to Dots as Hike Odds Fade: Decision-Day Guide Disappointing economic news has led investors to trim expectations for an interest-rate increase when the Federal Reserve concludes its two-day meeting on Wednesday, though with some officials talking up the need to tighten policy, a hike… Continue reading The FOMC Decision Is Today