<Click on graphic for larger image> The Economist – Picnic for the bears Fears of deflation and recession hit markets GLOOM seems to have descended at the start of 2016. Equity markets have had the worst start to the year in at least two decades. The great and the good have queued up to warn… Continue reading Deflation
<Click on graphic for larger image> The Economist – Shocks and absorbers Unemployment is rising, but is not always visible China’s economy should, in theory, be able to accommodate many of the unemployed. The working-age population peaked in 2012, so all else being equal, there is less competition for jobs. At the same time, the… Continue reading Employment
Business Insider – The corporate bond market is a complete mess Investors are opening their eyes for the first time in years to glance at some of the risks they were blind to before. And risk aversion is cropping up again as a factor in the math. The record acquisition-financing hangover from last year is… Continue reading Problems In Corporate Bonds
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<Click on graphic for larger image> The Wall Street Journal – Investors Snub Money Managers for Market Clones Passively managed U.S. funds attracted $413.8 billion last year, highlighting shift in investors’ taste More investors are losing faith in old-school money managers as financial markets sputter. Clients yanked $207.3 billion in 2015 from U.S.-based mutual funds… Continue reading Active vs. Passive Funds
Bloomberg.com – Momentum Darlings Hit Wall in S&P 500 as Hedge Fund Stocks Slide Trades that kept the ceiling from crashing in last year are giving way now, as momentum stocks and others beloved by hedge fund managers lead a plunge that is pushing the Standard & Poor’s 500 Index toward its August low. With… Continue reading More Bad News For Hedge Funds
<Click on chart for larger image> MarketWatch – Saudis making a ‘trillion-dollar mistake,’ says U.S. oil billionaire Saudi Arabia will regret its attempt to drive U.S. oil producers out of business by flooding the world with crude, said shale pioneer Harold Hamm. In an interview with CNBC on Tuesday, Hamm said the Saudis have created… Continue reading Pride Comes Before The Fall
<Click on chart for larger image> The Wall Street Journal – Martin Feldstein: A Federal Reserve Oblivious to Its Effect on Financial Markets Unfortunately, the recently released minutes of December’s Federal Open Market Committee meeting made no mention of financial-industry risks caused by persistent low interest rates for years to come. There was also no… Continue reading The Fed & Financial Stability
Very worrisome signal for Fed credibility as 5 yr 5 yr forward breakevens plumb new lows … pic.twitter.com/OxavyW2cTD — NRKocherlakota (@kocherlakota009) January 13, 2016 Comment We asked why the Fed would hike while breakevens were so low in a 2014 Charts of The Week: The chart below below shows that every major dip in breakevens… Continue reading A Look At Inflation Breakeven Rates
<Click on chart for larger image> Bloomberg.com – The Real Price of Oil Is Far Lower Than You Realize While oil prices flashing across traders’ terminals are at the lowest in a decade, in real terms the collapse is even deeper…Saudi prices would be less than $17 a barrel when converted into dollar levels for… Continue reading Alternate Measures Of Crude’s Slide
<Click on chart for larger image> Bloomberg.com – Hong Kong Dollar Slides Most Since 2011 as Stocks Drop With Yuan Currency sinks to 10-month low as de-peg speculation mounts China concerns are spurring capital outflows, Mizuho says The Hong Kong dollar sank by the most in four years and the city’s shares were headed for… Continue reading The Hong Kong Dollar
<Click on graphic for larger image> The Wall Street Journal – Stocks Take a Beating as Alarm Grows Investors flee amid anxiety over global economy, oil; Dow nears correction territory The new year’s stock-market rout deepened Wednesday, dragging the Dow Jones Industrial Average down almost 10% from its highs of late last year and sending… Continue reading Stocks Continue Taking A Beating