Zero Hedge – Forget Rate Hikes: Bridgewater Says QE4 Is Next; Warns World Is Approaching End Of Debt Supercycle In a just released letter to clients, the head of the world’s largest hedge fund delivers one of his usual sermons about the economy as a perpetual motion machine, affected by central banks, and where interest… Continue reading QE4 Talk
Bloomberg Business – Yellen Confronts Greenspan Oasis Warning as She Weighs Rate Rise Former Federal Reserve Chairman Alan Greenspan warned in 1998 that the U.S. could not remain an oasis of prosperity in a world beset by financial turbulence. Now Janet Yellen must decide whether that counsel still holds true. A rout in emerging markets… Continue reading Yellen At The Rate Rise
Reuters.com – DoubleLine’s Gundlach says U.S. equity markets face another major leg down DoubleLine Capital’s co-founder Jeffrey Gundlach, widely followed for his investment calls, warned on Monday that the U.S. equity markets face another round of severe selling pressure. “The U.S. stock market is in a mode of uncertainty, at best,” Gundlach said in a… Continue reading Gundlach Speaks
The Wall Street Journal – Economic Forecasting Is Getting More Up-to-the Minute The Federal Reserve updates its economic forecasts every quarter. Many economists update their estimates monthly. Some forecasters run their models daily to incorporate new information. If that’s still too slow, a new company aims to offer forecasts every single minute created by trawling… Continue reading Economic Forecasting
<Click on graphic for larger image> The Wall Street Journal – A Fine Fed Mess Are financial assets falling to match the slowing real economy? Instead the Fed now finds itself caught between a slowing global economy and its promise to begin normalizing rates this year. The chattering financial classes are once again shouting at… Continue reading Is The Fed At Fault?
<Click on graphic for larger image> Zero Hedge – This Wasn’t Supposed To Happen: Crashing Inflation Expectations Suggest Imminent Launch Of QE4 This is how Nomura summarizes the chart above: “with deflation fears in the air and oil getting floored, inflation products have already become an unloved asset class. If the Fed surprises the market… Continue reading About Inflation Expectations
Comment So far, 480 of the S&P 500 have reported their Q2 quarterly earnings. 69% beat expectations. As the first chart below shows, this is fairly average. The second chart shows Q2 year-over-year operating earnings growth (blue line) is negative. The third chart shows expectations for 2015 growth are now near 1% (blue line). But… Continue reading Earnings Update
CNBC – Angry investors capture head of China metals exchange The head of a Chinese exchange that trades minor metals was captured by angry investors in a dawn raid and turned over to Shanghai police, as the investors attempted to force the authorities to investigate why their funds have been frozen. Investors have been protesting… Continue reading When Technocrats Are In Charge
<Click on chart for larger image> The New York Times – Fading Economy and Graft Crackdown Rattle China’s Leaders Mr. Xi’s campaign against corruption enjoys broad support in a nation where the widening gap between rich and poor is attributed to the ability of a small minority to prosper by abusing government positions or using… Continue reading China Plunges
<Click on graphic for larger image> <Click on graphic for larger image> Liberty Street Economics (NY Fed Blog) – What’s Driving Dealer Balance Sheet Stagnation? In Sum The picture that emerges is that post-crisis dealer asset growth represents the confluence of several issues. Our findings suggest that business-cycle factors (the hangover from the housing boom… Continue reading Bond Market Liquidity, Part 5
Bloomberg – Mohamed A. El-Erian: A Brutal Week in Markets, But What Comes Next? In assessing what lies ahead, investors would be well advised to consider six major factors that have brought markets to this uncomfortable point. 1. Unlike some previous episodes — including the 2008 global financial crisis and the 2013 “taper tantrum,” as well as those… Continue reading El-Erian Speaks