The Financial Times – Investors in junk bond funds face a Matrix moment Liquidity and pricing have become disconnected from reality In the 1999 science fiction film of the same name, the Matrix is a simulated world created by machines to keep humans complacent. In real life 2014, the Matrix is a pricing methodology used… Continue reading Junk Bonds
The Wall Street Journal – Decline in ‘Slack’ Helps Fed Gauge Recovery U.S. factories that were idled during the recession are now humming with activity. Office and apartment buildings have less empty space. Unemployment is falling, while wages and benefits are growing slowly. All are signs of an economy still healing from a deep downturn… Continue reading Slack In The Economy
Real Time Economics (WSJ Blog) – Fed Exit Fears Overstated, S&P Economist Says Worries that the Federal Reserve’s attempt to unwind extraordinary monetary support for the U.S. economy will go awry — because the central bank is in uncharted territory — are excessively alarmist, Standard & Poor’s chief global economist Paul Sheard says in a… Continue reading S&P Tells Us Not To Worry About The Fed’s Exit
<Click on chart for larger image> BusinessWeek – Oil Rigs Hit Record as Drillers Move Outside Big Basins Rigs targeting oil in the U.S. surged to a record as drillers ventured outside the nation’s biggest basins to search for crude in developing plays such as the South-Central Oklahoma Oil Province, known as SCOOP. Oil rigs… Continue reading Crude Oil
House Of Debt – More Evidence Supporting the House of Debt Economists of all stripes are baffled by continued economic weakness in the United States. The easiest way to see the weakness is to compare where we are in terms of GDP today relative to historical trend growth, something we did in a previous post.… Continue reading Housing’s Effect On Consumption
The Wall Street Journal – Don’t Blink at Japan’s Dreadful GDP Japan’s economic report card is going to be downright ugly. Investors needn’t worry: Extra tutoring sessions are available in case this student really falters. A 7.1% annualized decline is what economists polled by The Wall Street Journal expect when government GDP figures come out… Continue reading Will Q2 Japanese GDP Lead To More Abenomics?
None Today
The Wall Street Journal – Markets Gripped by Political, Growth Fears U.S. Authorization of Iraq Airstrikes Compounds Fears of Growing Trade War U.S. stock futures followed European markets lower Friday, with news that the U.S. has authorized airstrikes in Iraq compounding worries over an escalating trade war between Russia and the West and a flagging… Continue reading What Bothers The Market?
<Click on chart for larger image> FTSE Global Markets – US rates trading business to concentrate further, study says ““Greenwich Associates expects the head of the rates business to further concentrate into a few small ‘flow monsters’ and the tail to get longer, as nimble specialist firms compete on price, technology and expertise,” says Kevin… Continue reading Liquidity Concern In Fixed-Income Trading
Forbes – US High Yield Bond Funds See Shocking, Record $7.1B Cash Outflow Retail-cash outflows from high-yield funds ballooned to a shocking, record $7.07 billion in the week ended Aug. 6, with ETFs representing just 18% of the sum, or roughly $1.28 billion, according to Lipper. The huge redemption blows out past the prior record… Continue reading Junk Bond Outflows
<Click on chart for larger image> The Fiscal Times – Why the Bond Market Is Poised for a Plunge The real risk, though, is that the rerating of interest rate expectations could unleash another wave of selling; selling that rattles a bond market that is more vulnerable than it appears on the surface, according to… Continue reading Your Daily Installment In Bond Market Hate
<Click on chart for larger image> The Wall Street Journal – Summertime Living Isn’t Easy for Macro Funds The market’s summer stumble has dealt a new blow to a group of macro hedge funds that seek to anticipate trends in global markets. Graham Capital Management LP has laid off more than 10% of its staff,… Continue reading Struggling Macro Funds