Bloomberg.com – Citi Economist Says It Might Be Time to Abolish Cash Would this save the world economy? The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point… Continue reading The Problem With Cash
<Click on graphic for larger image> The Wall Street Journal – Continuing Jobless Claims Near a Low, and That May Not Be Good Economists and advocates for the unemployed see signs of labor-market slack in the figure At the peak in 2010, just after the recession ended, 68% of unemployed Americans received benefits. That amounted… Continue reading Falling Continuing Claims May Not Be Sign Of Healthy Jobs Market
Bloomberg.com – What Causes Recessions? In 1994, economists Greg Mankiw and Lawrence Ball wrote an essay for the National Bureau of Economic Research entitled “A Sticky-Price Manifesto.” Sticky prices might sound like a strange thing to write a manifesto about (did the prices spill Coke all over themselves?), but the essay heralded the beginning of… Continue reading Understanding Recessions & Price Stickiness
Bloomberg.com – European Bond Buyers Find Negative Doesn’t Necessarily Mean Bad Giving away your money doesn’t mean losing it these days. Investors who held shorter-dated European debt have managed to eke out a positive return in 2015, according to Bank of America Merrill Lynch indexes. That was even as price increases pushed yields in Germany… Continue reading Investing In Fixed Income In A QE World
<Click on chart for larger image> MoneyBeat (WSJ Blog) – Flattening Yield Curve Latest Complication for Fed A flattening “yield curve” is the latest sign of the tricky global cross-currents the Federal Reserve must navigate following years of ultraeasy policy. The curve, reflecting the yield differential between two-year and 10-year U.S. government debt, has flattened… Continue reading The Yield Curve
<Click on graphic for larger image> I asked @SFFedReserve chief Williams when the #Fed should raise rates. He had a message for me: this T-shirt. pic.twitter.com/gc4m0QLu60 — Ann Saphir (@annsaphir) April 13, 2015
Bloomberg.com – Investors Size Up Yellen Collar as Dudley Outlines Fed Thinking As Fed Chair Janet Yellen and colleagues prepare to raise interest rates for the first time since 2006, Dudley used two appearances this week to signal the pace of the increases will depend a lot on how markets react to the initial moves.… Continue reading The Fed’s Third Mandate
Reuters – Nikkei tops 20,000, European shares hit 15-year high World shares tested record highs on Friday as hopes of more easy money from top central banks pushed Japan’s Nikkei past 20,000 points for the first time in 15 years and European stocks reached similar heights. The stock market push was set to keep Wall… Continue reading QE Works, April Edition
The Wall Street Journal – Hedge Fund Kamunting Street Capital Shutting Down The historic plunge in oil prices has helped claim another victim: a hedge fund run by a former Citigroup Inc. trading star. Kamunting Street Capital Management L.P., which managed about $1 billion at its peak, is returning external capital to investors, founder Allan… Continue reading Crude Oil Speculation Update
Bloomberg.com – You’ve Never Heard of the Bull Market’s Best Stock Pickers The Hotchkis & Wiley Small Cap Value Fund has returned 35 percent a year since the bull market began in 2009, the top-performing U.S. stock fund during the period. Never heard of James Miles and David Green, the fund’s managers? That’s no surprise.… Continue reading The Lost Art Of Stock Picking
<Click on chart for larger image> MoneyBeat (WSJ Blog) – The Crazy, Pragmatic New World of Bond Yields The only thing crazier than the idea that governments are getting paid to borrow money, is the realization that there’s a rational explanation for it. That’s the state of the capital markets today, where Switzerland sold 10-year… Continue reading Understanding Negative Rates
The Financial Times – Henny Sender: QE may not have been worth the costs Growth remains weak despite zero rates and asset purchases One of the odd things about unconventional monetary policies is the absence of a vigorous debate about the costs of these experiments, whether in the US, in Japan or now in Europe.… Continue reading More on QE