Comment Fixed income managers are not convinced the bond rally will continue. As the chart below shows, the percentage of bond mangers over-weighted Treasuries is 10%, one of the lowest readings seen in the last seven years. That being said, fixed income managers look pragmatic when compared to economists. As we noted earlier this month,… Continue reading More On Bond Bearishness
Business Insider – Deutsche Bank Blasts James Montier And John Hussman’s Case For Falling Profit Margins Montier and Hussman conclude that record high profit margins are largely attributable to fat government deficits and depressed household savings. Indeed, that relationship appears to form a pretty tight correlation as seen in the chart from Hussman you see… Continue reading Discussing Profit Margins
The Wall Street Journal – Alan Blinder: Fed Hawks vs. Doves: The Sequel The central bank cannot execute a perfect exit from its post-crisis policies, but it does know how to do it. I want to make three important points about the Fed’s eventual exit. (Believe me, I am leaving out many boring details over… Continue reading Hawks vs Doves At The Fed
Bloomberg.com – Abe Learns About Animal Spirits From Nobel Winner Shiller Three weeks before Japan increased its sales-tax for the first time in 17 years, Prime Minister Shinzo Abe turned to Nobel laureate Robert Shiller to try to restore a vital ingredient of his economic revolution: optimism. Abe met the Yale University professor in Tokyo… Continue reading Can Robert Shiller Save Japan?
Bloomberg.com – London Housing Talk of Ye Olde Tavern Alarming Carney Welcome to London’s frenzied housing market, where low mortgage rates and a dearth of properties for sale have sent prices rising in a year by an amount almost twice the average annual London wage. From centuries-old pubs to Mayfair clubs to the halls of… Continue reading London Housing Bubble?
Spiegel (Germany) – Combatting the Crunch: ECB Plans Negative Rate on Bank Deposits When it meets on June 6, SPIEGEL has learned, the European Central Bank may implement a negative interest rate for financial institutions seeking to park their money at the Frankfurt powerhouse. The move is aimed at spurring loans. Bloomberg.com – Swiss Face… Continue reading Are Negative Deposit Rates Coming To Europe?
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MoneyBeat (WSJ Blog) – Corporate Earnings Leave U.S. Stocks Wobbly Behind the stock market’s anxious ups and downs of late lies the fear that a weakening U.S. and global economy could dash hopes for an uptick in corporate earnings. For the first quarter, earnings season is nearly done. More than 90% of big companies have… Continue reading Earnings Update
The Wall Street Journal – Jon Hilsenrath: Fed’s Rate-Change System Up for Revamp The Fed’s old system for moving interest rates up or down looks increasingly unsuited for the postcrisis financial system, so officials are rewriting their strategy for replacing it. But first they need to resolve big questions with implications for $2.6 trillion that… Continue reading Goodbye Fed Funds Rate
The Financial Times – Mohamed El-Erian: Fears over ‘lowflation’ serve up bond market surprise Rather than head higher and pierce the 3 per cent level, as virtually everyone had expected at the start of the year, the yield on US 10-year government bonds has touched its lowest since October. And, at just 2.5 per cent,… Continue reading Explaining Falling Rates
The Economist – The opposite of insurance A new book argues that household debt, not broken banks, fuelled the recent recession BEFORE Ben Bernanke found himself trying to prevent a second Great Depression as chairman of the Federal Reserve, he had become well known in economic circles for explaining why the first one happened. In… Continue reading The Cause Of The Crisis
The Wall Street Journal – Geithner’s Missing Memoir Former Secretary of the Treasury Timothy Geithner published his memoir last week, and not one of its more than 500 pages addressed a phone call at the center of a $5 billion prosecution. But thanks to a Tuesday ruling from federal Judge David Carter, Mr. Geithner will… Continue reading Geithner vs. S&P