Cumberland Advisors – Bob Eisenbeis: Is Federal Reserve Forward Guidance Dead? Since the guidance continually changed as the FOMC’s expectations for employment growth, and unemployment failed to materialize, markets now find themselves no better off than before the whole experiment with forward guidance began. From the Committee’s perspective, it became obvious that maintaining fixed forward… Continue reading Forward Guidance
Bloomberg.com – Inflation Panic Will Kill the Recovery The theme emerging in presentations at a recent symposium at the Peterson Institute for International Economics is that central banks shouldn’t gauge the state of the labor market by looking at measured unemployment. Some of the people who’ve stopped looking for a job (and therefore aren’t counted… Continue reading Is The Fed Falling Behind The Inflation Curve?
<Click on chart for larger image> The Wall Street Journal – Student-Loan Debt: A Federal Toxic Asset The federal government assumes that almost all student-loan debt can be treated as an asset because federal loans are not dischargeable under normal circumstances. So it really is not a problem if the total debt exceeds $1 trillion… Continue reading Student Loans
<Click on chart for larger image> The Wall Street Journal – In Significant Test, Fed Facility Fails to Defend Short-Term Rate Floor A Federal Reserve tool designed to set a lower boundary on short-term rates didn’t work that way Tuesday, reinforcing concerns that new limits could thwart its effectiveness…Another short-term rate in the private market… Continue reading Testing The Cap On The Fed’s Repo Facility
The Financial Times – Pimco flagship fund had $23.5bn outflows last month Outflows have, unsurprisingly, accelerated at Pimco’s flagship fund. The asset manager said investors pulled $23.5bn in September from its Total Return Fund, which was managed by Bill Gross before he quit for rival Janus Capital on Friday. The outflow marks the 17th consecutive… Continue reading More On The Outflows At Pimco
The Financial Times – Only a weak euro can save the ECB now While the underlying economic fundamentals call for a further easing of monetary conditions, in particular by accelerating the unconventional measures given that interest rates are now at zero, the instruments left to implement such a policy have become increasingly limited and controversial.… Continue reading What’s The ECB To Do?
Associated Press – Bonds seem stable, but risks are mounting; 5 reasons they may be less safe than you think Here are five reasons bonds may be less safe than you think. HIGH PRICES: Demand and prices have soared for nearly every kind of bond, even risky ones sold by companies with shaky finances, and… Continue reading More Bond Market Hate
Project Syndicate – Stephen Roach: The Fed Trap A few years later, the global financial crisis erupted, and these statements, once idle conjecture, became the basis for an urgent action plan. But one vital caveat was lost in the commotion: What works during a crisis will not necessarily provide sufficient traction for the post-crisis recovery… Continue reading Judging QE
<Click on chart for larger image> MoneyBeat (WSJ Blog) – Time to Finally Worry? Buy this dip? The answer isn’t so clear cut this time. The Dow Jones Industrial Average tumbled 238 points on Wednesday, its sixth-biggest drop of the year. The S&P 500 sank below 1950, its lowest level in six weeks. Perhaps most… Continue reading Stocks Slide Again
Bloomberg BusinessWeek – Fed Scrutiny of Leveraged Loans Grows Along With Bubble Concern The Federal Reserve is stepping up its oversight of high-risk leveraged loans, shifting to a deal-by-deal review after its previous industry-wide guidelines were largely ignored by banks. The Fed is now looking at loans each month, according to people who asked not… Continue reading Ineffective Macroprudential Regulation
The Reformed Broker – Did Lehman Need to Die? On Sunday, Mr. Bernanke was in Washington awaiting the New York Fed’s verdict. In a phone call, Mr. Geithner said Lehman could not be saved. The Fed would be lending into a run, Mr. Geithner told Mr. Bernanke, according to both men’s accounts. In a recent… Continue reading Remembering Lehman
Kerrisdale Capital – October 6, 2014 from Kerrisdale Capital on Vimeo.