CNBC – US, China, Europe nearing ‘Minsky moment’: Economist The world’s three economic superpowers – the U.S., China and Europe – are heading for a major collapse in asset values because their economic models favor consumption instead of productivity, one economist has warned. “We’re still not wise enough to realize that our current model is… Continue reading Nearing A Minsky Moment?
The Wall Street Journal – Billions Fly Out the Door at Pimco About $10 Billion Is Withdrawn After Departure of Gross Pacific Investment Management Co. suffered roughly $10 billion of withdrawals following the Friday departure of co-founder Bill Gross, a person familiar with the matter said, a sign of how quickly Mr. Gross’s surprise move… Continue reading Bill Gross & Pimco
Real-Time Economics (WSJ Blog) – Fed’s Mester Upbeat on Economy, Wants Fed Policy Clearly Data Driven Federal Reserve Bank of Cleveland President Loretta Mester said Wednesday that she still believes the central bank needs to revise how it describes the likely path for interest rate increases. The Fed’s guidance about the timing and pace of… Continue reading Note To Fed Officials, Never Use The Word “Contained”
CNBC – Cashin: Markets seeing broad selling Veteran trader Art Cashin said that the market is experiencing a broad selloff, but the cause is not immediately clear. Cashin, director of floor operations at the NYSE for UBS, told CNBC on Thursday that it is the riskier elements of the market that are being hit now,… Continue reading Things That Bother The Equity Market
<Click on chart for larger image> Bloomberg.com – VIX Resisting Panic as S&P 500 Rout Erases $320 Billion Even as $320 billion was erased from U.S. equity values yesterday and all but 14 companies in the Standard & Poor’s 500 Index fell, volatility gauges signaled investors have yet to enter panic mode. The 18 percent… Continue reading Volatility Hasn’t Entered Panic Mode …Yet
DealB%k (NYT Blog) – Miss a Payment? Good Luck Moving That Car Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high… Continue reading Auto Loans – The New Subprime?
The Economist – Corporate saving in Asia: A $2.5 trillion problem Japanese and South Korean firms are the world’s biggest cash-hoarders. This hurts their economies THE odd thing about prudence is that too much of it can be deadly. Timid drivers crawling along a motorway create more risk than they avoid. Children who are over-protected… Continue reading Company Cash Hoarders In Asia
Bespoke – Bullish Sentiment Declines, But Still Above Average Bullish sentiment on the part of individual investors took a slight hit this week, but given the back to back 100 point declines in the DJIA to start the week, it is probably more surprising that bullish sentiment didn’t decline more. According to the weekly survey… Continue reading Sentiment
The Economist – Buttonwood: Scrambled signals Did financial journalists fail to spot the crisis?YOU cannot hope to bribe or twist, thank God, the British journalist. But seeing what the man will do, unbribed, there’s no occasion to.” Those lines from Humbert Wolfe come to mind when contemplating a new book of essays* that asks whether… Continue reading Foreseeing A Crisis Is Difficult
Bloomberg.com – Michael Lewis: The Secret Goldman Sachs Tapes Our financial regulatory system is obviously dysfunctional. But because the subject is so tedious, and the details so complicated, the public doesn’t pay it much attention. That may very well change today, for today — Friday, Sept. 26 — the radio program “This American Life” will… Continue reading Regulation
Bloomberg.com – Bond Supply in U.S. Seen Turning Positive in ’15: Credit Markets The net supply of bonds in the U.S. next year is seen exceeding coupon payments for the first time since 2010, leaving private investors to make up for demand being vacated by the Federal Reserve. Credit Suisse Group AG projects net issuance… Continue reading Bond Supply