MoneyBeat (WSJ Blog) – Jon Hilsenrath: Jobs Report Keeps Early Rate Hike On Table, Tough Communication Decision For Fed Many Fed officials believe they need not panic about falling behind the curve on raising interest rates. Inflation is low and faces downward pressure from a stagnant Europe and struggling economies in Japan and China. This… Continue reading Did The Jobs Report Change Anything For The Fed?
The Financial Times – Gross triggers sell-off in interest rate derivative positions Investors have liquidated hundreds of billions of dollars of positions in interest rate derivatives contracts, an asset class favoured by Bill Gross, in moves that traders suggested showed Pimco cashing in holdings to meet redemption demands. The massive shift in positions marks the… Continue reading The Bill Gross Effect
Barron’s – Randall W. Forsyth: Running Out of Bullets Central bankers are finding it more and more difficult to influence the economy. Four closed-end bond funds worth a look. Thirty-five years ago, on Oct. 6, 1979, the Federal Reserve made the original “whatever it takes” pledge. That’s not how it was stated, but by couching… Continue reading Monetary Policy: Running Out Of Options
The Wall Street Journal – Latest Threat to Corporate Earnings: The Almighty Dollar While U.S. executives must be pleased with encouraging news about the economy—including Friday’s strong jobs report—it may prove a mixed blessing for their bottom lines. That is because American corporations, as represented by the S&P 500, aren’t that American. Over 40% of… Continue reading The Dollar’s Effect On Earnings
Barron’s – A Poor Stretch for Funds Stocks edged up in the third quarter, but equity funds posted negative returns, according to Lipper. Worse, they experienced outflows. Why health and biotech funds outperformed. In a turbulent third quarter marked by new geopolitical crises and continued concerns about the strength of the U.S. economy, stocks eked… Continue reading Actively Managed Funds Miss Their Mark
The Financial Times – SEC’s new rules give US money market funds a floating feeling After years of heated debate, the Securities and Exchange Commission, the US regulator, recently adopted stricter rules for US money market funds. The new rules are intended to limit the potential systemic risks of money market funds by reducing the… Continue reading Examining The New Money Market Fund Rules
Bloomberg – A Gary Shilling: Nothing Grows Forever, Including the Stock Market Major stock indexes may be at or near all-time highs, yet I see a number of warning flags for equities. Yesterday, I examined four of them: high price-to-earnings ratios, slow economic and corporate-revenue growth, earnings growth driven by unsustainable cost-cutting and low interest… Continue reading A Cautionary Tale For Stocks
Sprott Global – Jim Grant: We’re in an Era of ‘Central Bank Worship Jim Grant is the publisher and editor of Grant’s Interest Rate Observer, a bi-monthly newsletter that he founded in 1983, around the time when bonds were considered some of the worst investments – when they yielded 13 to 15 percent. Rick Rule,… Continue reading Jim Grant Speaks
MoneyBeat (WSJ Blog) – How the Fed’s Crisis-Era ‘Maiden Lane’ Vehicles Got Their Name Ever wonder why those crisis-era vehicles set up by Federal Reserve Bank of New York to hold soured mortgage securities from Bear Stearns and AIG were named Maiden Lane? Federal Judge Thomas Wheeler did. In the ongoing trial over the bailout… Continue reading The Etymology Of Maiden Lane
<Click on chart for larger image> The Wall Street Journal – Fannie & Freddie: No Looting Here Why would any company agree to surrender all profits to the U.S. government? That question lies at the heart of the continuing legal dispute between some shareholders in Fannie Mae and Freddie Mac and the government—even after some… Continue reading Fannie & Freddie
The New York Times – Technology Takes the Wheel By the end of the decade, many automakers will offer vehicles that can take control on the highway, even passing and exiting on their own. Google’s driverless car may still be a work in progress, but the potential for semiautonomous vehicles on American roads is no… Continue reading Robots Are Taking Over