The Financial Times – Record income gap fuels US housing weakness The income gap between America’s richest and poorest metropolitan regions has reached its widest on record, shaping an uneven housing recovery that threatens to hold back the broader revival of the world’s largest economy. The gap has narrowed and widened in past cycles, but… Continue reading The Problem With Housing
The Wall Street Journal – Japan GDP Slump Stirs Stimulus Talk Economy Contracted 6.8% in Second Quarter; Figure Pressures Abe Over Further Tax Rise A sharp second-quarter slowdown in Japan raised discussion among economists about further stimulus, but the economy minister said he didn’t think extra steps were needed now. Gross domestic product shrank 6.8%… Continue reading Japan
The Financial Times – Case for credit investment still stands Problems of a low yield world prove value of diversification Investors who hold a mix of equities and fixed income instruments such as credit and government bonds can still take comfort, despite the low fixed-income yields on offer across the developed world. Although the price… Continue reading Searching For Yield
The Wall Street Journal – Ukraine’s Currency Hits a New Low The Hryvnia’s Fall Pressures the Restive Country and Its Banks; Bond Investors Face Reckoning Escalating tensions with Russia sent Ukraine’s currency tumbling to a record low against the dollar Tuesday, a move that could threaten the stability of the country’s banking system and raise… Continue reading Ukraine’s Currency
<Click on chart for larger image> The Wall Street Journal – Proposal Threatens to Aggravate Shortage of Railcars to Move Oil Proposed federal regulations on hauling flammable liquids threaten to aggravate a shortage of railcars for transporting oil. The proposal, which likely will mean scrapping or redeploying thousands of tank cars, could make it more… Continue reading Crude Oil Moved By Rail
The Wall Street Journal – Job Openings Hit 13-Year High More Workers Are Quitting, Too, Pointing to Gathering Strength in Labor Market The number of job openings across the U.S. economy reached a 13-year high in June and workers showed increasing willingness to quit, signaling steady improvement in the labor market. U.S. employers had 4.7… Continue reading Number Of Job Openings Show Strength In The Job Market
The Economist – Comparing conflicts The disparity of attention and casualties among global conflictsLARGE demonstrations in support of Gaza are taking place across Europe. Unease about the situation in Ukraine consumes people’s minds. Though it has long been known that there is little correlation between the attention paid to conflicts and their level of casualties,… Continue reading Global Conflicts In 2014
Forbes – Martin Fridson: Weakest Expansion’ Is Actually Right On Trend Edward Lazear, who headed the Council of Economic Advisers under George W. Bush, enumerates specific shortcomings of Obama’s policies: “Threats of higher taxes, the constantly increasing regulatory burden, the failure to pursue an aggressive trade policy that will open markets to U.S. exports, and… Continue reading GDP Growth During Expansions
International Financing Review – Argentina CDS holders await auction detail Holders of the US$900m net notional outstanding in credit default swaps referencing Argentina will have to wait a little longer before details of the forthcoming credit auction emerge. After taking less than an hour to determine that Argentina’s missed coupon payment to holders of its… Continue reading Defining A Credit Event For The CDS Market
Rosie: Wondering why 10-year yield is 2.4%? The BoJ, PBOC, & Fed have collectively absorbed 93% of net new bond supply over past year! — Gluskin Sheff (@GluskinSheffInc) August 11, 2014 Comment Yesterday David Rosenberg offered the above comment regarding Treasury yields and supply via Twitter. The chart below shows net Treasury issuance, Fed purchases,… Continue reading Treasury Issuance
The Wall Street Journal – Yield Hunters’ New Tune Echoes Financial Engineering’s Past The search for yield may be approaching the final frontier. Ultra-loose monetary policy has prompted investors to take more risk in exchange for yield. For some, that means buying lower-rated bonds or debt with longer maturities. Another route is to invest in… Continue reading The Search For Yield