<Click on chart for larger image> The Wall Street Journal – Ben Leubsdorf: and Jon Hilsenrath: As Food Prices Rise, Fed Keeps a Watchful Eye U.S. food prices are on the rise, raising a sensitive question: When the cost of a hamburger patty soars, does it count as inflation? It does to everyone who eats… Continue reading Food Inflation
<Click on chart for larger image> The Wall Street Journal – Emrys Partners Hedge Fund Shuts Down Firm Founded by Steve Eisman Wound Down at the End of Last Month Steve Eisman, who emerged as one of the stars of the financial crisis with a winning bet against mortgages, is shuttering his hedge-fund firm, according… Continue reading More On Struggling Hedge Funds
The Financial Times – Fund managers hold the potential for systemic risk Could fund managers pose a systemic risk? Regulators round the world started to ask the question, and answered “perhaps”. Fund managers’ response was: “Cherchez la leverage.” Downturns turn into crises when companies have too much leverage, and a small loss can render them… Continue reading Can Mutual Funds Be Too Big To Fail?
MoneyBeat (WSJ Blog) – Are Markets Underestimating Rate Hike Risks? Investors are seriously underestimating where official interest rates ought to be in a couple of years’ time if the Bank for International Settlements’ calculations are correct. In which case policymakers face a fiendishly tricky job. In its latest annual report, the BIS–the global central bankers’… Continue reading Rate Expectations
The Wall Street Journal – The Bond Market Is a Drag These Days It isn’t just the dearth of volume and volatility that is weighing on Wall Street bond-trading desks. Declining velocity is, too. Bond velocity is similar to the velocity of money. But instead of measuring the rate at which money is exchanged for… Continue reading Bond Market Velocity
<Click on chart for larger image> Bloomberg.com – Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise. The Federal Reserve’s bond purchases combined with demand from… Continue reading Bond Fails
Bloomberg.com – Mohamed El-Erian: Yellen Lays Out Her Policy Blueprint There are seven major takeaways from Yellen’s IMF speech. They collectively signal that the Fed will maintain a gradual policy approach for now. Markets, conditioned to expect strong and steadfast monetary support from the Fed, welcome that stance. But Yellen’s statements also point to the… Continue reading More On Yellen’s IMF Speech
The Wall Street Journal – IEX Pricing Aims to Drain ‘Dark Pools In its bid to become a full-fledged stock exchange, IEX Group Inc. plans to unveil a pricing system aimed at stealing market share from other exchanges and enticing big banks to shut down their so-called dark pools. The upstart firm will allow broker-dealers,… Continue reading IEX Takes Aim At Dark Pools
The Wall Street Journal – With Stocks So High, Should Investors Move to Cash? As stock indexes hit record highs, nervous investors increasingly face a difficult choice: Do they keep betting as heavily on the markets, or do they move more money into cash? The answer isn’t so simple. Cutting exposure with the aim of… Continue reading Are Stocks Overextended?
The Wall Street Journal – U.S. Jobs Report: 288,000 Positions Added The unemployment rate, obtained from a separate survey of households, fell to 6.1% in June, the lowest level since September 2008. The improvement reflected more people finding jobs while the size of the workforce remained relatively steady.Economists surveyed by The Wall Street Journal had… Continue reading Employment In Pictures
The Wall Street Journal – Fed’s Yellen Leery of Using Rates to Deal With Financial Risk Federal Reserve Chairwoman Janet Yellen pushed back Wednesday against the notion that the central bank should consider raising interest rates to address concerns about financial stability. While she didn’t rule out applying the monetary brakes if other policy options,… Continue reading Yellen Asserts Monetary Policy Can’t Help Financial Stability