Real Time Economics (WSJ Blog) – Jon Hilsenrath: Fed Debate on Exit Strategy Isn’t Over Federal Reserve officials have begun debating whether the federal funds rate, an overnight interest rate charged by banks, should remain the central bank’s target short-term interest rate. That debate doesn’t appear to be near a resolution after a policy meeting… Continue reading Hilsenrath’s Take On The Exit Strategy
<Click on chart for larger image> The Wall Street Journal – Takeovers Put Fuel in Stocks’ Empty Tank The fastest start on record for corporate takeovers is providing fuel for a stock market stuck in low gear. U.S.-based companies this year have proposed or agreed to $637.95 billion worth of mergers or acquisitions—either as the… Continue reading M&A Activity
House of Debt (blog) – Atif Mian and Amir Sufi: Student Debt and a Broken Financial System When the Class of 2009 entered college in 2005, they had good reason to be optimistic. The economy appeared to be healthy, and a college degree commanded higher wages. College, of course, is expensive. And almost 2 out… Continue reading Student Loans
The Wall Street Journal – Borrowing Cash to Buy Complex Assets Is In Vogue Again Banks again are doling out money to hedge funds and other investors to finance purchases of complex debt securities, returning to a practice that helped fuel the debt boom ahead of the financial crisis…Borrowing programs for such esoteric securities have… Continue reading A Return To Risky Lending
The Wall Street Journal – The New Math of Renting vs. Buying Buying a home has long been part of the American dream. But rising prices have made renting less expensive in many places…Renting had been less expensive than buying on average across all the areas Deutsche Bank tracks since at least the early 1990s.… Continue reading Buying vs. Renting
The Wall Street Journal – Jeremy Grantham on Bubbles: ‘I Am Sure It Will End Badly’ Legendary investor Jeremy Grantham predicts the bull market still has plenty of room to keep rallying, perhaps for another year or two. But another move higher will be followed by an inevitable crash, one in which pain will be… Continue reading Irrational Exuberance/Bubble Talk
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The Wall Street Journal – U.S. Adds 288,000 Jobs as Winter Lull Fades Nonfarm employment grew a seasonally adjusted 288,000 last month, the Labor Department said Friday. That marked the best month of job creation since January 2012 and the second-best month since the economy emerged from recession in mid-2009. Revised figures also showed payrolls… Continue reading Employment In Pictures
FT Alphaville – The Fed’s future management of short rates The challenges the Federal Reserve faces in exiting its highly accommodative policy have not necessarily been taken into account as regulatory agencies seek to promote financial stability. For instance, the FDIC‟s decision to increase charges on large banks‟ liabilities reduced those banks‟ incentives to take… Continue reading What Short Rate Will The Fed Hike?
The Telegraph – Speculative fever is back to 2008, with compound interest We are in a colossal bubble once again. It is worse than 2008 on many indicators, though the epicentre of risk is ever more concentrated in sovereign debt, especially the debt of those countries without a central bank (you all know who I… Continue reading Why No One Owns Treasuries Anymore
The Wall Street Journal – China’s Economy Surpassing U.S.? Well, Yes and No There are a number of reports around Wednesday (here and here) that China’s economy, by one measure at least, is likely to surpass the U.S. in size sometime this year. The headlines will surprise many people, used to hearing China’s economy will… Continue reading How Big Is The Chinese Economy?
The Economist – Return of the big deal A spate of mergers and acquisitions could redraw the business landscape, especially in Europe, with its many sub-scale companies The current crop of deals looks bigger in part because surging stockmarkets have inflated the share prices of both bidders and targets. As in the mid-2000s episode of… Continue reading Is M&A Returning?