<Click on chart for larger image> The Wall Street Journal – What Is Going on in Euro Money Markets? Something fishy is up in the euro money markets. Not only is the benchmark overnight rate for euros on the interbank market, spiking, but demand for the European Central Bank’s cheap liquidity is suddenly taking off… Continue reading Europe
Business Insider – ALBERT EDWARDS: My Pick For Fed Chair Would’ve Been Basketball Legend Magic Johnson Edwards offered a final omen of poor prospective market performance – the appointment of Janet Yellen. Tongue-in-cheek, he showed what he considers a “guaranteed” relationship between market returns and the height of Fed chairpersons. Edwards’ pick for Fed chairman… Continue reading Correlation Is Not Causation … We Hope!
The Wall Street Journal – U.S. Stock Values Have Analysts Worried Corporate-earnings reports are trickling in, and they aren’t great. J.P. Morgan Chase & Co. was a little better than anticipated; General Electric Co.was as expected; Best Buy Co. was terrible. Money managers are wondering whether soft earnings will justify more stock gains, given the… Continue reading Is The Stock Market Overvalued?
The Prudent Bear – The Bear’s Lair: The coming deficit spirals The colossal cost of much needed projects like U.S. infrastructure repair highlight the necessity to balance the budget. Policymakers and investors have been remarkably sanguine in the first few weeks of the year, appearing to believe that the problems bedeviling the global economy since… Continue reading Deficit Spirals
The New York Post – John Crudele: Commerce muscles in on Congress hearing The Commerce Department is acting very nervous about the investigation into the falsification of economic statistics. Last Thursday, the House Oversight Committee, headed by Rep. Darrell Issa (R- Calif.), interviewed the first witness in its probe — a whistle-blower who alleges that Commerce’s… Continue reading The Falsification Of Economic Stats
Bloomberg.com – El-Erian’s Next Act and Pimco’s Future Before he got into the money-management business, El-Erian was a staff economist at the International Monetary Fund. Over the course of a 15-year career he ended up working closely with the Fund’s No. 2 bureaucrat in the 1990s: Stanley Fischer, who was just nominated to be Federal… Continue reading Where Does Mohamed El-Erian Go Next?
The Guardian – The next crisis could be here soon Financial crises come round every seven years or so – if history is a guide, the next crisis should come along some time soon Financial crises come round every seven years on average. There was the stock market crash of 1987, the emerging market meltdown… Continue reading The Next Crisis Is On Its Way
CNBC – Buffett backs $1 billion March Madness prize offer Warren Buffett and Dan Gilbert, founder of Quicken Loans, are teaming-up to offer $1 billion for the perfect NCAA March Madness bracket. Buffett’s Berkshire Hathaway will be insuring the grand prize. It would be shared by any qualified contest participant who predicts the winners of… Continue reading Buffett Backs $1 Billion Prize
Comment The chart above is from The Chart Store. It shows that China’s stock market (gold line) over the last five years has performed worse than the Japanese market (cyan line) in the five years following its bubble popping in December 1989. Note that both lines are drawn on proportional scales. Ask any market watcher… Continue reading Is China Worse Than Japan?
Wall Street Journal – Jon Hilsenrath: Next cut in Fed bond buys looms Reduction to $65 billion could be announced on Jan. 29 The Federal Reserve is on track to trim its bond-buying program for the second time in six weeks as a lackluster December jobs report failed to diminish the central bank’s expectations for… Continue reading The Federal Reserve’s Next Move Is All Set
Bloomberg.com – Central Banks Should Stop Confusing Investors The world’s most powerful central banks are struggling with their approach to “forward guidance” — what they tell investors about their plans for monetary policy. A practice meant to give the markets more clarity is causing confusion. The basic thinking behind forward guidance is simple: If investors… Continue reading Central Banks And Forward Guidance