The Financial Times – Dramas to match scenery at Jackson Hole “Re-evaluating labour market dynamics”, the topic of this weekend’s symposium, appears deliberately dull, as if intended to keep financial markets in a summer slumber. Yet, like James Bond film titles, Jackson Hole summits have a habit of capturing the zeitgeist…Despite the US’s relative robustness,… Continue reading Jackson Hole
Real Time Economics (WSJ Blog) – New Fed Exit Strategy Emerges and Foreign Banks Big Winners Federal Reserve officials haven’t decided when to raise short-term interest rates, but as The Wall Street Journal reported earlier this week, they are closer to finishing a blueprint for how they’ll do it. Minutes of the Fed’s July 29-30… Continue reading The Mechanics Of FOMC Policy Going Forward
Bloomberg.com – The Source of the Deadbeat Economy What exactly is secular stagnation?…it involves three distinct but related possibilities. A persistent gap between actual and potential output. Because of an imbalance between saving and investment, the nominal interest rate required to maintain full employment falls to less than zero — not just briefly, but persistently.… Continue reading More On Secular Stagnation
The New Yorker – Will the 2014 Election be a Wave or a Ripple? Political junkies like to talk about “wave” elections, in which one party makes massive gains and overturns the existing power dynamic. National Journal reports that the odds of such a wave election, in favor of Republicans, are increasing for the upcoming… Continue reading The Battle For House Seats
The Wall Street Journal – Market Chilly to Argentine Debt Proposal Argentina’s options are dwindling after its latest proposal to exit default by sidestepping a U.S. court order met with skepticism in financial markets on Wednesday. Argentine bond prices slipped and the black-market peso tumbled to a record low against the dollar the day after… Continue reading The Argentinian Debt Drama Continues
Bloomberg.com – Only Rich Know Wage Gains With No Raises for U.S Workers Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at… Continue reading Comparing This Recovery’s Wage Gains Historically
Bloomberg.com – Free Money for Germany is Bad News for Euro When investors are willing to lend money to Germany for two years for free, at a zero interest rate, you know the euro project is in trouble again. Germany yesterday sold 4.04 billion euros ($5.3 billion) of notes that pay no interest, repayable in… Continue reading German Yields Not A Good Sign For The EU
Charts of the Week Topics Covered This Week Include: An Earnings Update An Earnings Update – 2 An Earnings Update – 3 An Earnings Update – 4 Revisiting The Stock/Bond Relationship Revisiting The Stock/Bond Relationship – 2 Revisiting The Stock/Bond Relationship – 3 Climbing A Wall Of Worry Repo Fails On The Rise Ukraine’s Currency… Continue reading Charts of the Week
Comment In the video above, Robert Shiller offers the following thought on bonds: “The bond market is looking expensive. It’s bizarre. You know real interest rates on the 30-year is less than 1%. We had negative real interest rates. How can it be that we cannot get a real return for 30 years? That looks… Continue reading Bearish On Bonds
MarketWatch.com – Everything you wanted to know about the Fed’s exit plan but were afraid to ask Here are some of Morgan Stanley’s major predictions for the Fed’s exit: The first rate hike will actually involve five rates. The way Morgan Stanley sees it, the first Fed rate hike will proceed as follows: The rate… Continue reading The Fed’s Exit Plan
MarketWatch.com – The 10.8 trillion failures of the Federal Reserve The conventional wisdom says the Federal Reserve is keeping interest rates so low that it doesn’t pay to play it safe, and that it’s encouraging investors to do all sorts of crazy things to earn a higher yield. Supposedly, the central bank is forcing investors… Continue reading Where Did The QE3 Money Go?