The Financial Times – Glenn Hutchins: ‘Audit’ the Fed and you blunt our best economic tool When our economy was most fragile, politicians wrangled for years, writes Glenn Hutchins America’s central bank is a uniquely American institution, shaped by centuries of trial and error, learning and reform. It is not a monolithic government institution. Power… Continue reading Audit The Fed
The New York Times – Convictions Prove Elusive in ‘London Whale’ Trading Case The case of the London Whale has ended — with a whimper. Last week, Britain’s Financial Conduct Authority took the unusual step of announcing that it was dropping its investigation and would take no further action against Bruno Iksil, whose risky bets… Continue reading The London Whale
The New York Times – G.O.P. Is Quiet About Fed Rate Increases, but Democrats Voice Concerns As the Federal Reserve prepares to raise interest rates later this year, Republican critics have dialed down the volume of their complaints, while Democrats are now fretting loudly about the path of monetary policy. Janet L. Yellen, the Fed… Continue reading The Politics of Hiking Rates
<Click on graphic for larger image> The Financial Times – Futures markets have much to say about oil’s direction For a brief, brave moment this year there was a sense the worst was over for the oil sector. This week, that feeling evaporated. Iran’s agreement to curtail its nuclear programme, potentially restoring its place as… Continue reading Oil Prices
<Click on graphic for larger image> The Wall Street Journal – Central Banks Take Back Global Market Spotlight Divergence in global monetary policy is still the big theme for 2015 Financial eruptions in Greece and China have been occupying markets’ attention. But under the surface, the tectonic forces of global monetary policy are still moving… Continue reading Diverging Central Banks
Project Syndicate – Robert J. Shiller: The Mirage of the Financial Singularity In their new book The Incredible Shrinking Alpha, Larry E. Swedroe and Andrew L. Berkin describe an investment environment populated by increasingly sophisticated analysts who rely on big data, powerful computers, and scholarly research. With all this competition, “the hurdles to achieving alpha… Continue reading The End Of Alpha?
None Today
<Click on chart for larger image> Bloomberg.com – Markets Aren’t Buying China’s Rosy GDP Claims China’s latest tool to calm investors is a raft of cheerful GDP figures. The trouble is, they’re looking a bit too cheerful. Beijing’s attempt to get away with 7 percent growth in the second quarter fell flat with traders, who… Continue reading What Is China’s Real Growth Rate?
Bloomberg.com – Yellen Says Rate Rise Likely in 2015 as Labor Market Improves Federal Reserve Chair Janet Yellen said prospects are good for further improvement in the labor market and the economy, keeping the central bank on track for an interest-rate increase in 2015. “If the economy evolves as we expect, economic conditions likely would… Continue reading Timing The Rate Hike
Alhambra Investment Partners – Stock Bubble And Its Buyback Genesis Suddenly Vulnerable Having now passed the anniversary of the “rising dollar”, it is interesting to see the related and continued effects on the stock bubble(s). As should be obvious by now, stock buybacks, funded via corporate bonds and loosely categorized C&I loans, are responsible for… Continue reading Buybacks
Bloomberg.com – The Exact Moment Big Cities Got Too Expensive for Millennials The rent has been “too damn high” in New York for so long that today’s young professionals might assume it was always that way. Yet it wasn’t until the second quarter of 2004 that the median rent exceeded 30 percent of the median… Continue reading Rents On The Rise
<Click on graphic for larger image> Wellscap.com – Inflation Holds the Key for P/E Multiples Will price/earnings (P/E) multiples rise further in this recovery cycle? Or, are valuations already near a recovery peak representing a risk for investors should they contract and making future stock returns increasingly dependent on good earnings performance? The accompanying chart,… Continue reading Inflation’s Effect On P/E Multiples