CNBC – Perfect storm for inflation could rock the market As investors cheer the good news for job growth that came with the February employment report, they may be overlooking a troublesome dynamic: A tightening jobs market, in combination with rising commodity costs, could stir inflation, cutting into corporate profits and forcing the Federal Reserve… Continue reading Is Inflation Coming Back?
The Wall Street Journal – Mortgage Market Gets Reshuffled Washington’s effort to push banks out of the mortgage-servicing business is propelling the handling of customers’ loans into companies such as hedge funds and nonbank financial firms. The shift is fueling concern among federal and state regulators about the level of oversight and capital requirements in… Continue reading Hedge Funds Moving In On The Mortgage Market
<Click on chart for larger image> <Click on chart for larger image> <Click on chart for larger image> The New York Times – For First Time, Kremlin Signals It Is Prepared to Annex Crimea Russia signaled for the first time on Friday that it was prepared to annex the Crimea region of Ukraine, significantly intensifying… Continue reading Russia/Ukraine Update
The Financial Times – Forward guidance threatens to ‘encourage excessive risk’ Efforts by central banks to spur economic recovery by providing guidance on what will happen to interest rates could endanger the global financial system, economists at the Bank for International Settlements have warned. Investors are being encouraged to load up on risk because they… Continue reading Central Bank Forward Guidance Does Not Work – BIS
Project-Syndicate – Yao Yang: China’s Shadow Menace The US Federal Reserve’s decision to exit from so-called “quantitative easing” – its massive monthly purchases of long-term assets – is stoking fears of a hard economic landing in China. But China’s strong economic fundamentals mean that policymakers have the space to avoid such an outcome – as… Continue reading China’s Shadow Banking System
House of Debt – Wealth Inequality and Stock Market Gains For the past couple of years, the quarterly release of the Federal Reserve Flow of Funds data has been cheered because it has shown a sharp rise in household wealth, particularly of financial assets. We agree this is good news, but the aggregate headline numbers… Continue reading Wealth Distribution
<Click on chart for larger image> Bloomberg.com – Debt Exceeds $100 Trillion as Governments Binge The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest… Continue reading Measuring Debt
<Click on chart for larger image> The Wall Street Journal – China Weakens Yuan by Largest Degree Since 2012 China’s central bank weakened the daily reference rate for its currency by the largest percentage in more than a year and half, as it continues to fight capital inflows and as sluggish economic data sends jitters… Continue reading The Yuan
The Wall Street Journal – New-Home Building Is Shifting to Apartments Share of Housing Construction as Rental Apartments at Highest Level in at Least Four Decades The share of new homes being built as rental apartments is at the highest level in at least four decades, as an improving jobs picture spurs younger Americans to… Continue reading The Housing Market
The Financial Times – John Authers: Why are markets inefficient and what can be done about it? ‘Value’ momentum leads eventually to bubbles and mispricings Markets are not perfectly efficient. More or less everyone agrees to this in the wake of the financial crisis. And while asset bubbles have recurred from time to time throughout… Continue reading Examining The Causes Of Bubbles
The Wall Street Journal – U.S. Adds 175,000 Jobs; Unemployment Ticks Up to 6.7% The U.S. labor market in February picked up from recent months, though growth remained measured and the unemployment rate stubbornly high. U.S. nonfarm payrolls increased by a seasonally adjusted 175,000 in February, the Labor Department said Friday. Revisions by the agency… Continue reading Employment In Pictures