Bloomberg – Hedge Funds Can’t Exit Crop Markets Fast Enough Amid Big Supply With excesses building in everything from cotton to wheat, hedge funds can’t seem to get away from crop markets fast enough. Bumper global harvests and slowing demand will push combined inventories of corn, soybeans and wheat to a record, according to U.S.… Continue reading Hedge Funds And Crops
The Financial Times – US asset manager warns over ‘risk parity’ AllianceBernstein, a big US asset manager, has warned that the swelling popularity of an investment strategy known as “risk parity” is exacerbating the fragility of financial markets and worsening sell-offs. Equity and bond markets have been hit hard by fears over sliding commodity prices,… Continue reading Risk Parity
The New York Times – Paul Krugman: Debt Is Good But the power of the deficit scolds was always a triumph of ideology over evidence, and a growing number of genuinely serious people — most recently Narayana Kocherlakota, the departing president of the Minneapolis Fed — are making the case that we need more, not… Continue reading Krugman Speaks
Comment Note, markets are moving too fast for us to keep up. We will comment on the broader implications throughout the week.
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The Wall Street Journal – Jon Hilsenrath: Markets and U.S. Data Sending Conflicting Signals To Fed Tumbling stock prices and developments in China suggest risks to the Fed’s outlook are accumulating Federal Reserve officials say their decisions about interest rates are data dependent, meaning they will move interest rates when economic data support a change.… Continue reading Is The Fed Still Data Dependent?
Comment Yesterday Jim Bianco participated in a podcast with Andrew Busch about the markets. They talked about China’s trouble, the Fed, why lower crude oil has not translated into higher consumer spending, weak earning reports and active versus passive management flows. To listen to it, click on the link above or here.
The Wall Street Journal – No End in Sight for Oil Glut Crude-price plunge is deepening, yet producers keep pumping When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived. Instead, the price of crude has plunged by almost 60% from its 2014 peak—and… Continue reading We Produce Too Much Crude Oil
Liberty Street Economics (NY Fed Blog) – The Evolution of Workups in the U.S. Treasury Securities Market The market for benchmark U.S. Treasury securities is one of the deepest and most liquid in the world. Although trading in the interdealer market for these securities is over-the-counter, it features a central limit order book (CLOB) similar… Continue reading Bond Market Liquidity, Part 4
Reuters.com – INSIGHT-“Go anywhere” bond funds pose risks that investors can’t see If the past few months are an indication, investors are right to be concerned. Nine of the 10 largest unconstrained bond funds underperformed the Barclays Aggregate Bond Index in the 12 months ending June 30, as managers bet wrong by positioning their portfolios… Continue reading Bond Fund Performance
The Wall Street Journal – Mortimer Zuckerman: Who Will Get the Dreary Economy Going? The worst U.S. recovery since World War II drags on, with insufficient notice from the White House or candidates aspiring to the Oval Office. The American economy remains weak, with growth at the lowest level in more than three decades. In… Continue reading What To Do About The Poor Economy
The Economist – The sell-off in commodities: Goodbye to all that A decade of bingeing on raw materials may leave an even longer hangover IT WAS only a decade or so ago that Scotland was hit by the “Great Drain Robbery”, the disappearance of 50 manhole covers in Fife. It gave an inkling of the… Continue reading Slumping Commodities