<Click on chart for larger image> Bloomberg.com – For Wall Street Bond Strategists, There’s Wrong and Less Wrong If at first you don’t succeed, revise, revise again. That’s become the mantra of Wall Street’s bond-market forecasters this year. Stephen Stanley knows how frustrating it’s been. The chief economist at Amherst Pierpont Securities LLC has… Continue reading Economists’ Rate Forecasts Are Always Too High
<Click on chart for larger image> Bloomberg.com – It Has Never Paid More to Hold European Stocks Than Bunds Market gyrations since the Brexit vote has pushed the spread between European equity dividend yields and Germany’s 10-year bund yield to over 400 basis points, the widest since Bloomberg started tracking the data in 2002. This… Continue reading Comparing Bund Yields To European Dividends
<Click on graphic for larger image> FRB Atlanta – Latest forecast: 2.3 percent — July 12, 2016 The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.3 percent on July 12, down from 2.4 percent on July 6. The forecast of the contribution of inventory… Continue reading GDPNow Heading Lower
<Click on chart for larger image> Bloomberg Business – Data Gap Whipsaws Oil Prices on Differing Views of Stockpiles Oil traders don’t know who to follow these days. Weekly inventory reports that help set prices for crude futures come primarily from two sources: The industry-funded American Petroleum Institute and the U.S. government’s Energy Information Administration.… Continue reading The Business Of Estimating Oil Data
<Click on graphic for larger image> The Reformed Banker – The Laws of Capitalism are Being Rewritten In the early 1950’s, Harry Markowitz introduced his Modern Portfolio Theory as an explanation for how, by diversifying one’s investments, an “efficient frontier” of risk versus reward could be achieved and optimized. A decade later, William Sharpe and… Continue reading Negative Rates Turn Capitalism On Its Head
Bloomberg.com – Fed’s Bullard Says Brexit to Have ‘Close to Zero’ U.S. Impact Federal Reserve Bank of St. Louis President James Bullard said he thought the U.K.’s vote to leave the European Union wouldn’t have a lasting effect on the U.S. economy, joining Cleveland Fed chief Loretta Mester in playing down the threat Brexit poses to… Continue reading Bullard Is Not Worried About Brexit
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The Cleveland Federal Reserve – Federal Funds Rates Based on Seven Simple Monetary Policy Rules Monetary policymakers often use simple monetary policy rules, like the Taylor rule, as an input into their decision-making. However, there are many different simple rules, and there is no agreement on a single “best” rule. We look at the federal… Continue reading Too Many Monetary Policy Models
The Wall Street Journal – Why This Bank is at The Center of a Battle for Europe Italy’s banking crisis is testing new financial regulations Brussels is caught in a game of chicken with the Italian banking system and both sides are wrestling with highly unpredictable outcomes. Italy wants to use public money to shore up its… Continue reading Italy’s Banking Crisis
<Click on chart for larger image> The New York Times – Can We Ignore the Alarm Bells the Bond Market Is Ringing? The financial media tend to report breathlessly about what the stock market did yesterday. But savvy economic analysts have always known the bond market is the place to look for a real sense… Continue reading Falling Yields
<Click on chart for larger image> Bloomberg Briefs – Are high-yield bond etfs….junk? Tired of your stock manager? No problem, buy an exchange-traded fund that tracks the S&P 500. But if you’re sick of your junk-bond manager, good luck finding an ETF that can beat him. Since 2007, more than 80 percent of active high-yield… Continue reading High Yield ETFs