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February 4, 2015
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Real Time Economics – Fed’s Bullard Eager to Raise Rates Soon WSJ: Are all of the same factors driving TIPS (inflation) breakevens down? BULLARD: I do worry about TIPS-based inflation compensation and it has been down a lot recently and it does concern me. What I want to do with that is wait and see… Continue reading Do Central Bankers Understand Inflation?
The Financial Times – ‘Your time will come’, Treasury bears told Treasury bears are thus frustrated. But their time will come, stresses Strategas Research. The New York-based boutique gives several reasons why we should expect 10-year yields to rise. The Federal Reserve has not raised interest rates for eight years — but it “is likely… Continue reading Treasury Bears Hold Firm
<Click on graphic for larger image> Bloomberg.com – Draghi’s Negative-Yield Vortex Draws in Corporate Bonds Credit markets are being so distorted by the European Central Bank’s record stimulus that investors are poised to pay for the privilege of parking their cash with Nestle SA. The Swiss chocolate maker’s securities, which have the third-highest credit ranking… Continue reading Negative Yields
<Click on chart for larger image> The Financial Times – German 10-year yield dips below Japan’s Germany’s benchmark long-term borrowing rate has fallen below Japan’s for the first time on record, fuelling fears that the eurozone is mired in economic stagnation that could last for decades. “It’s a shocking headline,” said one bank analyst based… Continue reading German Yields Dip Below Japan’s
The Financial Times – Greece finance minister unveils plan to end debt stand-off Greece’s radical new government unveiled proposals on Monday for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders. Yanis Varoufakis, the new finance minister, outlined the plan in… Continue reading Greece Moderates
The Financial Times – Rising dollar hits US corporate earnings Dozens of US companies have warned that a sharply stronger dollar has eaten into revenues and crimped profits over the final three months of the year, forcing businesses to cut costs as hedging strategies fail to offset currency fluctuations. Pfizer, United Technologies, Procter & Gamble,… Continue reading The Strong Dollar And Earnings
<Click on graphic for larger image> The Sydney Morning Herald – RBA cuts interest rates to record low of 2.25% The Reserve Bank of Australia has cut interest rates for the first time since August 2013. In one of the most closely-watched policy rulings since the global financial crisis, the RBA board lowered the 2.5… Continue reading Another Central Bank Cuts Rates
<Click on chart for larger image> MoneyBeat (WSJ Blog) – Morning MoneyBeat: Some Good News on Buybacks After double-digit surges in repurchase activity the past two years, Goldman Sachs projects 2015 will be another strong year with S&P components shelling out $604 billion in executed buybacks – a 12% gain from the prior year. That… Continue reading Buyback Update
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DealB%k (NYT Blog) – Slump in Oil Prices Brings Pressure, and Investment Opportunity American history is littered with oil busts that created big winners and losers. Now, as the cracks appear in the latest energy boom, the forces of failure and opportunity are stirring again. Resolute Energy, a Colorado company that borrowed big in the… Continue reading More On Oil
<Click on graphic for larger image> <Click on graphic for larger image> Federal Reserve Bank of San Francisco – Economic Letter – Persistent Overoptimism about Economic Growth Since 2007, Federal Open Market Committee participants have been persistently too optimistic about future U.S. economic growth. Real GDP growth forecasts have typically started high, but then are… Continue reading How Good Are Official Forecasts? (Answer, Not Very)