The Wall Street Journal – Russia Rating Slips to Junk, and the Ruble Takes a Beating Move Comes as Surge of Fighting in Ukraine Prompts West to Threaten New Sanctions Russia’s fractured economy suffered another potential blow Monday after credit-rating firm Standard & Poor’s cut the country’s credit rating to junk, sending it below investment… Continue reading Russia’s Ratings Cut To Junk
The Wall Street Journal – Greece and Europe Dig In on Bailout Terms After Syriza Victory in Greek Election European Officials Worried Concessions Could Encourage Other Antiausterity Movements Greece and its creditors veered toward confrontation as its new, leftist government pledged to make good on promises to reverse years of public-spending cuts despite warnings from… Continue reading Greece
<Click on graphic for larger image> The Wall Street Journal – Jon Hilsenrath: Euro’s Big Drop Puts U.S. Economy, Federal Reserve to the Test Strengthening Dollar Will Make American Goods More Expensive Abroad and Could Slow Both U.S. Growth and Inflation Even if the Fed felt threatened by the ECB move, it would be hard… Continue reading Will The Surging Dollar Put The Fed On Hold?
The Wall Street Journal – Oil, Dollar a Thorn in Rosy Wall Street Forecasts Wall Street analysts’ forecasts have a habit of tending toward optimism. Considering what is going on with oil and the dollar, right now they are tending toward the ridiculous. Companies are in the midst of reporting fourth-quarter numbers, and so far… Continue reading Earnings Season Is Underway
<Click on graphic for larger image> The New York Times – How Economists Came to Dominate the Conversation Two hundred years ago, the field of economics barely existed. Today, it is arguably the queen of the social sciences. These are the conclusions I draw from a deep dive into The New York Times archives first… Continue reading Economists’ Popularity
The Wall Street Journal – Edward P. Lazear: Solving the Puzzle of Stagnant Wages There are basically two ways that the average economywide wage can fall. There might be a shift in employment away from high-paying to lower-paying industries; in other words, the economy is producing more “bad jobs.” The other way is that the… Continue reading A Closer Look At Stagnant Wages
The Financial Times – Wolfgang Munchau: Draghi’s QE is an imperfect compromise for the eurozone Mario Draghi’s announcement of approximately €800bn in sovereign asset purchases by the European Central Bank over a 19-month period is what informed observers should have foreseen. If you expected less, then either you did not believe that the ECB president… Continue reading ECB QE
Bloomberg.com – Carney Says QE Can Encourage Excessive Risk-Taking in Markets Bank of England Governor Mark Carney warned easy monetary policy could prompt excessive risk-taking in financial markets. Two days after the European Central Bank announced a 1.1 trillion-euro ($1.23 trillion) quantitative-easing program, Carney said six years of sustained monetary stimulus was justified on an… Continue reading The Link Between QE & Risk-Taking
MoneyBeat (WSJ Blog) – Markets Get Bumpier as Fed Withdraws Safety Net Markets are slowly weaning themselves from their over-reliance on the Federal Reserve. To many money managers, this is excellent news because it means the economy and financial markets are becoming more normal after the 2008 financial crisis, when markets seized up and the… Continue reading The Return Of Volatility?
Bloomberg.com – Greece’s Vote to Keep the Euro The Syriza party’s victory in Greek elections is a well-deserved rebuke to the way the European Union and successive governments in Athens have mishandled the country’s debt crisis, and the voters’ judgment must now be respected. But even as the neo-Marxist party moves to change Greece’s dismal… Continue reading The Greek Election
<Click on chart for larger image> Bloomberg.com – Owners of Negative-Yield Sovereign Debt Say They’re No Fools Mike Amey never thought he’d buy bonds from countries like Germany and Switzerland when losses were all but guaranteed. Then again, these are hardly normal times in the bond market. Europe faces a prolonged bout of deflation and… Continue reading When Yields Go Negative