<Click on chart for larger image> Business Insider – HEDGE FUND MANAGERS REACT: CalPERS Was Just Terrible At Picking Hedge Funds The hedge fund industry today is buzzing about the nation’s largest public pension fund’s decision to ditch all of its hedge fund investments. On Monday, the California Public Employees’ Retirement System (CalPERS) said it’s… Continue reading Hedge Fund Managers React To CalPERS News
Financial Post – Why the coming ‘rates rage’ will wreak havoc across the globe The world financial system is at an inflection point as the U.S. and China both switch off monetary stimulus, a form of synchronised tightening by the “G2″ superpowers. Bank of America has warned clients that the glory days of “maximum liquidity”… Continue reading Rates Rage
The Wall Street Journal – China’s Central Bank Injects $81 Billion Into Top Banks to Counter Slowdown China’s central bank is injecting 500 billion yuan ($81 billion) into the country’s five major state-owned banks as it moves to counter slower-than-expected growth in the world’s No. 2 economy, according to a senior Chinese banking executive. The… Continue reading China’s QE
<Click on chart for larger image> The Wall Street Journal – Germany Secures Record Low Funding Cost at Bond Auction Investors paid a hefty price tag for the privilege of buying German government debt on Wednesday, in a fresh sign of how the European Central Bank’s monetary easing policies are upending the region’s bond markets.… Continue reading Paying For The Honor Of Owning German Debt
The Wall Street Journal – Power of Zero Rates to Distort Markets Should Worry Central Banks When Lehman Brothers imploded six years ago, zero interest-rate policies were an urgent part of the solution. But their persistence has caused more and more market distortions. That raises the stakes for central banks aiming for the exit…Markets are… Continue reading The Effects of ZIRP
The Wall Street Journal – Oil Prices Sink as World-Wide Supplies Rise Pressure Increases as Weak Demand and Robust Global Production Leave Extra Crude Sloshing Around the Market A global oil surplus is driving U.S. crude prices to fresh lows. Benchmark U.S. oil-futures prices approached a 16-month low for the second time in three trading… Continue reading What Is Driving Crude Lower? Depends Who You Ask
<Click on chart for larger image> Comment Last week we highlighted the September Bloomberg economist survey, showing 96% were bearish. This is the lowest percentage of bears since December 2013. The chart above shows the percentage underweight Treasuries again equals its 8-year extreme. Bond hate is still with us.
The New York Times – Paul Krugman: How to Get It Wrong Last week I participated in a conference organized by Rethinking Economics, a student-run group hoping to promote, you guessed it, a rethinking of economics. And Mammon knows that economics needs rethinking in the wake of a disastrous crisis, a crisis that was neither… Continue reading Krugman Unwittingly Explains His Failings
The New York Times – BINYAMIN APPELBAUM: As Bond-Buying Ends, Yellen Now Will Chart Course for Federal Reserve The Fed is expected to announce on Wednesday that it will add just $15 billion to its bond holdings in October. Then it plans to end the purchases, concluding a series of “quantitative easing” campaigns that have… Continue reading What Will The Fed Do Next?
Real Time Economics (WSJ Blog) – The Return of the Currency Wars When a country’s economy grows too slowly, the standard short-term remedies are to increase government spending, cut taxes or reduce interest rates. When none of those options is available, governments often resort to pushing down their currencies to make their exports more attractive… Continue reading Currency Wars
MoneyBeat (WSJ Blog) – Goldman: Here’s How Stocks Perform Before and After Fed Raises Rates With the focus shifting to when the Federal Reserve will start raising short-term interest rates, Goldman Sachs Group Inc. offers a road map for investors on how stocks perform before and after such a move. The analysis comes as the… Continue reading Stocks’ Performance Before & After Fed Hikes