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Rosengren Emphasizes Short-Term Interest Rates, Not Purchases

February 7, 2014

Real Time Economics (WSJ Blog) – Fed’s Rosengren: Fed Must Be ‘Patient’ in Cutting Back Stimulus Federal Reserve Bank of Boston President Eric Rosengren said Thursday underlying weakness in the labor market and persistently low inflation argue against raising short-term interest rates any time soon. “I firmly believe that monetary policymakers should remain quite patient… Continue reading Rosengren Emphasizes Short-Term Interest Rates, Not Purchases

Newsclips

How QE Works

February 7, 2014

Comment From the Bank of England

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Newsclips

Cartoons

February 7, 2014

None Today

Charts of the Week

Conference Call Presentation/Charts of the Week

February 6, 2014

Conference Call Presentation/Charts of the Week Topics Covered This Week Include: Financial Stability vs Data Dependency Why Did The Fed Taper? Portfolio Balance Channel The Fed’s Twisted Logic Emerging Currencies In Turmoil The Fed And The Stock Market The Fed And Wall Street GDP Guesses Getting 2013 All Wrong Earnings Season Update Abenomics Update [pageview… Continue reading Conference Call Presentation/Charts of the Week

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Newsclips

Conference Call Moved To Friday

February 6, 2014

Comment Due to a weather-related flight cancellation, Jim will not be able to host the conference call at the scheduled time. Instead, the conference call will take place at 9AM CT Friday, February 7. Those who have already signed up can still use the same dial-in instructions and codes during Friday’s new time. The handout… Continue reading Conference Call Moved To Friday

Newsclips

Hilsenrath Continues To Push The Fed’s Twisted Logic

February 6, 2014

Real Time Economics (WSJ Blog) – Jon Hilsenrath: Markets Foresee More Stimulative Fed, Despite Taper One development in financial markets that has received too little attention lately is a shift in market expectations about when the Federal Reserve will start raising interest rates. This is an issue we’ve harped on a bit lately (see Monday’s… Continue reading Hilsenrath Continues To Push The Fed’s Twisted Logic

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Newsclips

The Treasury’s Weighted Average Maturity

February 6, 2014

Bloomberg.com – Barry Ritholtz: Why Isn’t U.S. Taking Advantage of Low Rates? This is very short-term given the U.S.’s long-term unfunded obligations. This funding mismatch is a recipe for disaster in a rising rate environment. If you learned nothing else from the 2008-09 financial crisis, you should have at least picked up that small insight.… Continue reading The Treasury’s Weighted Average Maturity

Newsclips

Profits

February 6, 2014

Comment In the interview above Rob Arnott of Research Affiliates discusses the idea that there is a profits bubble. This was detailed in a Research Affiliates white paper last month. KEY POINTS 1.     Corporate profits are at or near an all-time high relative to both GDP and wages and salaries. 2.     Globalization facilitated by a… Continue reading Profits

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Newsclips

The Debt Ceiling

February 6, 2014

The Wall Street Journal – Debt-Limit Ideas Still Being Floated House Republican leaders, looking Wednesday for ways to ease passage of a needed increase in the federal borrowing limit this month, are considering adding sweeteners with bipartisan appeal such as a boost in pensions for military veterans. House Speaker John Boehner (R., Ohio) has made… Continue reading The Debt Ceiling

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More On Analog Charts

February 6, 2014

Bloomberg.com – Comparing Generational Stock Market Lows Every 30 years or so, markets make what can be described as a generational low. We can define this as a capitulatory bottom, one that might be caused by a variety of factors, but usually includes some combination of fear and panic. This equity-market low point is likely… Continue reading More On Analog Charts

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Newsclips

Fighting Deflation In Europe

February 6, 2014

The Telegraph – Insular ECB is playing dangerous game of chicken with deflationary world forces The US and China are withdrawing stimulus on purpose. The eurozone is doing so by accident, letting market forces drain liquidity from the financial system for month after month. The balance sheet of the European Central Bank has fallen by… Continue reading Fighting Deflation In Europe

Newsclips

Bill Gross Speaks On Credit Creation/Destruction

February 6, 2014

Pimco – Most ‘Medieval’ I find it fascinating the number of ways that investors approach the “value” of securities and other investments such as commercial real estate or homes. Many of them are legitimate and form a solid foundation in academic research or even common sense. “Natural” interest rates, P/E ratios, cap rates, risk and… Continue reading Bill Gross Speaks On Credit Creation/Destruction