The Wall Street Journal – Falling Oil Prices Worry Regional-Bank Investors Questions About Loans to Energy Firms Dominate Conversation During Earnings Blitz Meanwhile, regional banks’ stocks are taking a hit: Shares are down more than 20% on average since June 20, 2014—the date of oil’s most recent peak—at 13 banks whose energy loans comprised 5%… Continue reading Crude’s Effect On Bank Earnings
Fortune – Paul Singer: The Fed is causing inequality The hedge fund CEO said that the Fed’s quantitative easing bond buying program has been the main driver of income inequality and is exacerbating social instability around the world. Singer wasn’t the only one to criticize the Fed and central bankers at the World Economic Forum.… Continue reading The Fed & Inequality
MoneyBeat (WSJ Blog) – Get Used to Cheap Oil. Why Lower Prices May Stick Around Oil’s plunge is one of the biggest factors reshaping the global economy. How long can it last? Here are two fundamental reasons oil prices could stay low for a while. 1. Excess capacity Prices are determined by the size of… Continue reading Crude Oil Supply & Demand
<Click on chart for larger image> Bloomberg.com – Davos Not So Sure About That Fed Rate Increase You’re Expecting The U.S. Federal Reserve will struggle to raise interest rates this year amid weak economic growth abroad and slow inflation at home. That was the message from Goldman Sachs Group Inc. President Gary Cohn, former U.S.… Continue reading Davos Chimes In On Probability Of US Rate Hike
S&P Dow Jones Indices – S&P U.S. Indices Methodology Update New York, NY, January 21 , 2015 – S& P Dow Jones Indices today announces changes to the S&P U.S. Indices methodology after reviewing feedback received from its recent client consultation : Multiple Share Class Treatment : Effective with the September 2015 rebalance, S&P Dow… Continue reading The S&P 505
Bloomberg.com – Why Falling Prices Are Actually a Really Bad Thing On the surface, everything getting cheaper sounds like a dream come true. It’s not. The prospect is so terrifying that it’s prompted central bankers around the industrialized world to pour trillions of dollars into their economies to prevent a sustained drop in prices…Here’s why.… Continue reading Why Deflation Is Bad
The Financial Times – Why ECB action is likely to stoke global currency wars Will quantitative easing by the European Central Bank succeed? Here’s a tip: watch the euro. A weaker currency — the implicit objective of the ECB’s plans — could prove the most effective channel through which QE affects the real economy. A… Continue reading Currency Wars
The Wall Street Journal – China Injects $8 Billion Into Banking System China’s central bank injected cash into the money markets Thursday using short-term instruments it hasn’t used in a year, spurring speculation that further loosening of monetary policy may be on the way as the economy grows at its slowest rate in more than… Continue reading China Injects Liquidity Into Banking System
Charts of the Week Topics Covered This Week Include: Q4 2014 Earnings And Revenue Beat Rates Earnings Estimates A Terrible Earnings Day Interpreting The CoT Data Interpreting The CoT Data – 2 Interpreting The CoT Data – 3 Eurodollar Futures: Large Speculators Continue Strong Buying When Yields Go Negative Bank Loans Bank Loans – 2… Continue reading Charts of the Week
Economics 21 – Caroline Baum: Ignoring the Yield Curve May Be Dangerous to Your Health Confronted by warning signals, economists are latching on to a statistical model from the New York Fed that decomposes long-term interest rates. The model shows that the real interest rate – the rate that reflects long-term growth prospects and potential… Continue reading The Real Meaning Of “Term Premium”
Reuters.com – Analysis – Central bankers lurch from ‘whatever it takes’ to ‘whatever next’ For decades the power of currency printing presses has held markets in thrall. “Don’t fight the Fed” and all its international variations has been a devout belief among financial traders. Even after the failure of Alan Greenspan’s Federal Reserve to spot… Continue reading The New Slogan For Central Bank Policy: “Whatever Next”