Time Magazine – Janet Yellen: The Sixteen Trillion Dollar Woman In her first and only interview as Fed chief, the economist says why she thinks the housing market is back on track, companies will invest, and more new jobs are on the way this year. She now has the world’s largest economy in her hands… Continue reading Is Yellen’s Chairmanship Over Before It Starts?
<Click on chart for larger image> The Wall Street Journal – Growth Is New Mantra for Investors After shrugging off slowing earnings growth in recent years, stock investors say profits are starting to matter again. Last year, U.S. stocks powered into record territory despite stalling earnings growth as investors focused more on the Federal Reserve’s… Continue reading Do Earnings Matter?
<Click on chart for larger image> Real Time Economics (WSJ Blog) – Fed Discusses Tool That May Eventually Help It Set Rates Before they delved into debate over scaling back bond purchases at their December meeting, Federal Reserve officials peered further into the future — discussing the experimental bond-trading program that could one day become… Continue reading The Future Of FOMC Policy
<Click on chart for larger image> Comment As the chart above and the stories below show, hedge funds, as a group, had a disastrous year. By some metrics (relative performance) it was the worst in the history of the industry, breaking the record set last year. How much longer can they under-perform and be held… Continue reading Hedge Fund Returns
The Wall Street Journal – How the U.S. Won the Global Rebalancing Game No longer do Americans deserve to be called the world’s “consumers of last resort.” A striking decline in the U.S. trade deficit to its lowest level in four years in November reflects an ongoing improvement in the nation’s exports and a dramatic… Continue reading The Trade Deficit
Zero Hedge – Visualizing The Fed’s “Increased” Transparency As the world prepares to comprehend, in their own recency-biased manner, the minutes of the most recent FOMC meeting, we thought it worth a reminder of just how Fed communications have ballooned in the past 20 years. The first statement, issued on Feb. 4, 1994, was a… Continue reading FOMC Transparency
MoneyBeat (WSJ Blog) – Friday’s Jobs Number Could Be ‘Seasonally’ Hot This morning’s December jobs report from ADP surprised the market with its strength. Friday’s more critical number from the Bureau of Labor Statistics could be hot as well. “In December, the seasonal adjustment takes center stage,” said Andrew Zatlin, who runs the one-man economics… Continue reading Watch The Seasonal Adjustment In Tomorrow’s Jobs Report
MoneyBeat (WSJ Blog) – How Stocks React to Fed Minutes, in One Chart The latest minutes, from the Fed’s Dec. 17-18 meeting, will be closely scrutinized because this was the meeting the central bank made its highly watched taper decision. As WSJ’s Jon Hilsenrath reports, the minutes could show how the Fed’s big decision last… Continue reading How Do Stocks Typically React To Fed Minutes?
The Financial Times – Robert Rubin: Sound government finances will promote recovery The spur to action should be an assessment of costs and benefits Whether or not QE3 was wise to begin with, the question is what to do now. So-called “tapering” will not withdraw liquidity. Time will tell whether tapering – now under way… Continue reading Government Finances And The Recovery
Bloomberg.com – Matt Levine: Banks May Have Mispriced Things That Had No Price There’s not a ton of detail in this Wall Street Journal article about federal regulators’ “wide-ranging examination of mortgage-bond sales by banks in the years that followed” the financial crisis but ooh boy is it interesting. The examination seems largely metaphysical, looking… Continue reading The Soul of Banking
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Charts of the Week Topics Covered This Week Include: Mutual Fund Flows The Bull Market In Stocks Gold ETF Liquidation Continues A Look At ETF Holdings An Updated Look At The Euro Credit Spreads Hit Six-Year Lows An Updated Look At Gas Prices The Fed’s Fixed Rate Reverse Repo Facility The U.S. Policy Uncertainty Index… Continue reading Charts of the Week