The Financial Times – Greece’s central bank governor makes case for consolidation Greek banks must let weak companies fail and encourage consolidation across the economy if the country is to return to sustainable growth, Greece’s central bank governor has said. The warning comes after the central bank pressed Greece’s four largest lenders to set up… Continue reading Greece
The Wall Street Journal – Regulators Step Up Probe Into Bank Hiring Overseas The move marks a ratcheting up of an investigation that started last year with a query into J.P. Morgan Chase JPM -1.62% & Co.’s hiring practices abroad. The largest U.S. commercial bank by assets remains the focus of criminal and civil probes… Continue reading Bank Regulation
<Click on chart for larger image> Seeking Alpha – Is A Lower Participation Rate Inflationary? An increase in the labor force participation rate comes along with a higher level of wage growth. When the job market tightens and wage growth rises, retired, young adults, and idle individuals are enticed to come back to the job… Continue reading More On The Low Participation Rate
Dr. Ed’s Blog – Emerging Markets Aren’t All the Same (excerpt) Emerging Markets have been mostly underperforming other stock markets since 2011. Over the same period, the forward earnings of the EM MSCI has been mostly falling after rebounding rapidly during 2009 and 2010. That might explain why the index’s valuation multiple is low. However,… Continue reading The Emerging Markets
The Wall Street Journal – All You Need to Know About Fed Policy in Three Questions 1. How much slack remains in the U.S. economy? Slack is the amount of unused capacity and idle labor. In a recession, there’s more; in a recovery, there’s less. The more slack, the more unemployed workers, the longer the… Continue reading Federal Reserve Policy
<Click on chart for larger image> Bloomberg.com – China Money Rate Drops for Fourth Day on Ample Cash Supplies The seven-day repo rate, a gauge of interbank funding availability, declined three basis points, or 0.03 percentage point, to 3.11 percent as of 4:16 p.m. in Shanghai, according to a weighted average compiled by the National… Continue reading China
Bloomberg.com – Barry Ritholtz: Hedge-Fund Guys and Their Stock Tips This week was the 19th annual Ira Sohn conference. It is an opportunity to raise money for a good cause (pediatric cancer research and treatment), and hobnob with rock star hedge-fund managers. It has become a must-attend event. Just remember one important thing: Ignore the… Continue reading More On Underperforming Like A Hedge Fund Billionaire
CNBC – Economists climb on board the 4 percent bandwagon Four may be the new three when it comes to U.S. growth. A look at growth forecasts among Wall Street economists following the strong April jobs report finds a handful now forecasting 4 percent or better growth for gross domestic product in the second quarter.… Continue reading A Rebounding Economy
<Click on chart for larger image> The Financial Times – Ackman attacks plan for US housing reform A plan for the reform of the housing market before US Congress would fail, the hedge fund manager Bill Ackman predicted, and the nation would be best served by restoring mortgage giants Fannie Mae and Freddie Mac to… Continue reading Ackman Likes Fannie/Freddie
Comment In the video above Stuart Freeman, chief strategist of Wells Fargo Advisors, waxes bullish about the stock market. About 1:15 into the video he has positive things to say about this earnings season, noting that “market capitalization weighted earnings” grew about 7.5% in the first quarter. This metric stands in contrast to the commonly… Continue reading Market Cap Weighted Earnings
<Click on chart for larger image> Bloomberg.com – Draghi Grapples With Money Markets Signaling Recovery Too Early Mario Draghi may need to take action to stop money-market investors getting ahead of themselves. For the first time since 2008, overnight interbank rates are starting to exceed the European Central Bank’s benchmark interest rate, signaling a return… Continue reading ECB Short-Term Rates