The Wall Street Journal – Lenders Are Warned on Risk Intense competition in a slow-growth, low-interest-rate environment is continuing to fuel riskier lending by banks, a top U.S. regulator warned in a report released on Wednesday. The Office of the Comptroller of the Currency highlighted two areas in particular where banks took on more risk… Continue reading Loosening Lending Standards
The Financial Times – Europe rethinks how to cure its debt hangover Plans announced this month to wind down Hypo Alpe Adria, a midsized lender from Carinthia, attracted little international attention. But they could have significance beyond Austria’s borders. They offer an illustration – or warning – of how Europe will address high levels of… Continue reading Dealing With Default
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Charts of the Week Topics Covered This Week Include: Debating Inflation Bonds Will Crash! Who Owns Treasuries? China’s U.S. Treasury Holdings Fall The Consequences Of The Fed’s Repo Facility Mutual Fund Flows Emerging Market Fund Flows Stock Buybacks The ECB’s Negative Deposit Rates & Target2 Balances The Fed Slashes GDP Projections Again Housing An Updated… Continue reading Charts of the Week
<Click on chart for larger image> Chart courtesy of Yardeni Research The ECB – ECB introduces a negative deposit facility interest rate When deciding to lower the key ECB interest rates at its meeting today, the Governing Council of the ECB took the decision to cut the interest rate on the deposit facility to -0.10%.… Continue reading The ECB’s Negative Deposit Rates & TARGET2 Balances
The Financial Times – How close is the Fed to “mission accomplished”? More interesting is the fact that the FOMC’s “dot plot” showed that there is still a wide disparity of opinion among committee members about the appropriate level of interest rates in 2015 and 2016. This disparity is much greater than the difference in… Continue reading Has The Federal Reserve Accomplished Its Goals?
<Click on chart for larger image> The New York Times – Rise in Home Prices Is Slowing, and That’s a Good Thing The latest readings on United States home prices are the latest confirmation of a slowdown in that area: Prices are still rising in most cities, but much more slowly than they were a… Continue reading Housing
Dr Ed’s Blog – Stock Buybacks Charge Up the Bull (excerpt) The bull market in the S&P 500 since March 2009 has been marked by corporations buying back their shares and paying out dividends. From Q1-2009 through Q1-2014, S&P 500 companies repurchased $1.9 trillion of their shares and paid out $1.3 trillion in dividends. During… Continue reading More On Stock Buybacks
The New York Times – The Reality of Student Debt Is Different From the Clichés All of which is to say that student debt is indeed a problem for some young people today, but that it’s not a new phenomenon. For most, the returns on a college education have more than kept pace with the… Continue reading The Reality Of Student Loan Debt
Dr Ed’s Blog – Earnings Expectations Plummeting In Europe (excerpt) Analysts’ consensus earnings expectations for the EMU continued to plummet through the week of June 19. The estimates for 2014 and 2015 are down 7.0% and 5.0% ytd. Forward earnings has been flat-lining for over a year and remains well below the 2007 record high… Continue reading Earnings Expectations In Europe
CNBC – Could inflation be the new subprime? When Fed Chair Janet Yellen essentially dismissed inflation as a threat last week, she sought to calm investors’ fears but in doing so also raised an unpleasant specter of the not-too-distant past. To some, the central bank chief’s assertion that inflation threats were coming from “noisy” data—economist… Continue reading Is Inflation The New Subprime?
The Financial Times – Investors manic for ‘disrupter’ stocks But frothy IPOs do not spell equities euphoria Euphoria is a typical late-cycle signal. Investors throw caution to the wind and try to maximise upside returns. Pension funds overweight equities at the expense of prudent asset allocation, individual investors rush into hot equity mutual funds, Wall… Continue reading IPO Valuations