CornerStone Macro – What’s Up With Citigroup’s Economic Surprise Index? For years we’ve used Citigroup’s economic surprise index as a proxy for economic momentum. Well, for the past three months Citi’s index has declined even though most data in the U.S. have improved … why!? ** It has been communicated to us that the Citigroup… Continue reading Breaking Down Citi’s Surprise Index
The Wall Street Journal – Euro Zone Relies Too Much on ECB Europe’s Governments Need to Look Closer To Home to Solve Their Problems It is now two years since Mario Draghi gave the euro zone its safety net by pledging to do “whatever it takes” to save the single currency. The president of the… Continue reading The ECB
MarketWatch – Junk bond fears rise as outflows accelerate Most money leaves high-yield funds since June 2013 Outflows from mutual funds and exchange-traded funds that invest in junk bonds accelerated this week, adding to concerns that more pain is in store for the high-yield debt market. Investors pulled $2.38 billion from funds that buy low-rated… Continue reading High Yield Mutual Funds & ETFs
Bloomberg.com – Yellen Watching What She Eats Would Help Fed Tracking Inflation The next time Federal Reserve Chair Janet Yellen grabs dinner at her favorite eatery, she might want to take a longer look at the cost of her entrée. That’s because menu prices don’t change as often as those for many other goods and… Continue reading An Alternative To Core CPI
Business Insider – There’s A Big Warning About Acquisitions In David Einhorn’s Latest Investor Letter Greenlight Capital CEO David Einhorn sent out his Q2 investor letter this week, and the big takeaway is about how low interest rates are impacting corporate acquisitions. In a nutshell: Low interest rates are transforming acquirers into bad shoppers. In… Continue reading Einhorn Warns On M&A
The Wall Street Journal – For S&P, Strategists’ Forecasts Fall Short Wall Street market forecasters have been caught flat-footed by stocks’ rally this year. But even if they raise their predictions, many believe that the bulk of this year’s gains are in the past. Coming into 2014, many strategists, who make broad calls about the… Continue reading Forecasting Stock Gains
Comment Yesterday Jim Bianco and Green Square Capital’s Lincoln Ellis discussed the outlook for U.S. stocks and Federal Reserve monetary policy with Trish Regan on Bloomberg TV’s “Street Smart.” To view the interview, click on the image above. To view any of our recent interviews click here.
<Click on chart for larger image> The Wall Street Journal – Shelia Bair: The Federal Reserve’s Risky Reverse Repurchase Scheme The mere existence of this central bank program could exacerbate liquidity runs in times of market stress. The mere existence of this facility could exacerbate liquidity runs during times of market stress. Borrowers in the… Continue reading The Fed’s Fixed Rate Repo Facility
The Financial Times – Andrew Smithers: The fallacy of the Fed model A few weeks ago, I promised to write about claims that the stock market could be valued by comparing earnings yields to bond yields. This approach is sometimes called the “Fed model”. This was fashionable in the 1990s and seems to have some… Continue reading The “Fed Model” Is Nonsense
Cato Institute – Steve Hanke: Hot Money, Cold Credit There are two main factors that have hampered broad money growth in the United States since the financial crisis. Not surprisingly, they are both government created. The first is the squeeze that has been put on the banks, as a result of Dodd-Frank and Basel III’s… Continue reading The Current State Of Credit Creation
The Financial Times – Dryness alert, the Liquid-o-Meter siren has sounded RBS have joined the chorus of concerns about dangers in credit markets from thin trading volumes and a lack of risk takers making markets. The bank also, it turns out, has a measure for trading lubricacity: “Our Liquid-o-Meter shows liquidity in the credit markets… Continue reading Liquidity Problems In Markets