The Wall Street Journal – ‘Seth Lipsky: Inflation Dynamics’ With the Fed as Ringmaster Watching the Jackson Hole meeting for signs of an interest-rate increase—and pressing for other changes. Step right up, folks. A three-ring circus on monetary policy is getting under way on Thursday at Jackson Hole, Wyo. Three conferences will be convening at… Continue reading Jackson Hole Begins Today
FT Alphaville – Myths and facts about “risk parity” The most common — and least sophisticated — criticism of “risk parity” is that it’s just a levered bet on bonds. This bet supposedly looks smart in retrospect only because bonds have done very well since the early 1980s as nominal interest rates collapsed. However, the… Continue reading More On Risk Parity
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Charts of the Week Topics Covered This Week Include: What Does The Fed Do? Was Monday A Capitulation For Stocks? China Cuts Interest Rates … Again Are The Chinese Selling Bonds? Credit As A Leading Indicator Earnings and Revenue Rates Earnings and Revenue Expectations Company Guidance CPI Component Price Changes Over The Last Decade The… Continue reading Charts of the Week
The Wall Street Journal – Jon Hilsenrath: Central Bankers to Confront Stock-Market Turmoil at Fed’s Annual Jackson Hole Retreat China’s woes and looming decisions on interest rates will top the agenda Global central bankers are preparing to converge this week for the Federal Reserve’s annual retreat in Jackson Hole, Wyo., with a new economic mess… Continue reading The Recent Stock Market Rout
<Click on chart for larger image> The New York Times – Eduardo Porter: Political Risks May Foil Economic Reform in China Financial markets were shaken by China’s decision to abruptly devalue its currency on Aug. 11, days ahead of the publication of the I.M.F. report. For all the I.M.F.’s assurances that this was a minor adjustment… Continue reading Are The Chinese Selling Bonds?
<Click on graphic for larger image> The Financial Times – Martin Wolf: Why worries about China make sense The question is over a shift to a consumption-dominated economy I am neither intelligent enough to understand the behaviour of “Mr Market” — the manic-depressive dreamt up by investment guru, Benjamin Graham — nor foolish enough to… Continue reading More On China
<Click on chart for larger image> The New York Times – BINYAMIN APPELBAUM:Bets That the Fed Will Delay Interest Rate Increase Could Be Premature As markets quake and stock prices fall, investors increasingly are betting that the Federal Reserve will not raise interest rates this year. Their conclusion is a striking rejection of the Fed’s… Continue reading Timing The Rate Hike
The Financial Times – Larry Summers and Ray Dalio flag return of quantitative easing Investors believe that the recent market ructions have almost killed off the chances of a Federal Reserve interest rate increase next month, but some big-name industry figures are going even further, predicting that the central bank’s next move will be to… Continue reading More On The Return Of QE
<Click on chart for larger image> Bloomberg Business – For Oil Producers Cash Is King, and That’s Why They Just Can’t Stop Drilling Investors sent a surprising message to U.S. shale producers as crude fell almost 20 percent in August: keep calm and drill on. While most oil stocks have fallen sharply this month, the… Continue reading Crude Oil Production
<Click on chart for larger image> Bloomberg Brief – Managers Shrug Off Black Monday, Yuan Devaluation Many hedge fund managers are dismissing yesterday’s equity market sell-off and the devaluation of the Chinese yuan as signs of a broader economic slowdown, with some saying it is a buying opportunity for certain assets. Dean Maki, chief economist… Continue reading Hedge Fund Performance
<Click on chart for larger image> The Wall Street Journal – More Americans Seen Returning to the Job Market A new CBO report published Tuesday now projects that more Americans who left the workforce temporarily or who stayed out because of weak job prospects will return in the coming years as demand for labor builds… Continue reading The CBO Revises Its Economic Forecast