<Click on chart for larger image> The Wall Street Journal – Undervalue/Overvalue: The Great Yuan Debate Continues When last China Real Time delved into the valuation of Chinese yuan, economist Arvind Subramanian of the Peterson Institute for International Economics came to a surprising conclusion: The yuan was no longer undervalued. China might be shedding its… Continue reading Today’s Troubling China Headlines
FT Alphaville – The problem of dealer balance sheet elasticity The idea that the decline in dealer inventory could worsen the severity of a bond market selloff has received a lot of attention in the past year. A study by the New York Fed last October concluded that during the May-July taper tantrum, “dealer unwillingness… Continue reading Lack Of Liquidity
The Wall Street Journal – Book Review: ‘Stress Test’ by Timothy F. Geithner Geithner admits that he didn’t see the mortgage crisis coming and didn’t grasp the severity of the problems after it occurred. Timothy Geithner, the former Treasury secretary (2009-13), believes in the forceful application of U.S. tax dollars when financial institutions are in… Continue reading Revisionist History, Courtesy Of Tim Geithner
Bloomberg.com – In Gundlach’s ‘No Normal’ World, Treasuries Can’t Lose Blame the harsh winter for stifling economic growth or tensions in Ukraine for sparking demand for havens. Jeffrey Gundlach, the star fixed-income manager whose mutual fund beat 97 percent of its rivals the past three years, has a simpler explanation for why investors have gotten… Continue reading More Reasons Why Yields Remain Low
The Wall Street Journal – Bundesbank Open to Significant ECB Stimulus in June if 2016 Inflation Forecasts Lowered Measures Include Negative Rate On Bank Deposits, Person Familiar With Matter Said Germany’s central bank is willing to back an array of stimulus measures from the European Central Bank next month, including a negative rate on bank… Continue reading Will The Bundesbank Bless ECB QE?
<Click on chart for larger image> The Irrelevant Investor – The Small-cap Divergence The Russell 2000 had a fantastic 2013, delivering returns of 36.8% which was its best year since 2003. The first five months of 2014 have not been as kind. Small-caps are only down 4.5% YTD, but Friday marked a 10% peak-to-trough decline… Continue reading Small Cap Underperformance
Quartz (Blog) – Economics used to be the priesthood of free markets—now it’s a bunch of engineers Do a YouTube search for “Milton Friedman.” Most of the hits will be speeches mixing economic theory with political philosophy. You’ll see Friedman talking about the value of greed, for example, or holding forth on socialism versus capitalism.… Continue reading The Evolution Of Economics
<Click on chart for larger image> The Wall Street Journal – The Revenue Rolls In Federal tax receipts are up 8.2%, not counting Fannie Mae’s windfall. Though the press corps isn’t reporting it, this is turning out to be a boom year for Uncle Sam. Federal tax revenue is hitting new records, even with mediocre… Continue reading Tax Receipts
<Click on chart for larger image> Bloomberg.com – Lehman Trade a Gift That Keeps Giving for Paulson to King Street Almost six years after Lehman Brothers Holdings Inc. filed for the largest bankruptcy in history, triggering a global market meltdown, hedge funds are still feeding on its remains. A small group of firms that waded… Continue reading Hedge Funds
Real Time Economics (WSJ Blog) – Why A Quirky April Could Make Annual Inflation Pop April’s inflation data may look stronger because last April’s was so weak…Economists tend to focus on annual price changes because they’re more relevant to many consumers and the Federal Reserve. The Fed targets a year-over-year increase of 2% on the… Continue reading A Note On Thursday’s Inflation Release
<Click on chart for larger image> Business Insider – ACHUTHAN: In Hindsight, It Appears The US Economy Was In Recession Closer To Early-2013 Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) got a lot of praise and attention for predicting recent recessions, which were subsequently confirmed by the NBER. However, it’s Achuthan’s more recent… Continue reading Recession Dating
The Wall Street Journal – Attorney General Holder Tightens the Squeeze on Banks Justice Department Makes Push to Pursue Wall Street for Past Conduct The Justice Department’s effort to secure a guilty plea from Credit Suisse Group AG in coming days is expected to kick off a number of multibillion-dollar bank settlements, in what may… Continue reading Prosecuting Wall Street