The Wall Street Journal – A European Market That Is Ready for Rehab Securitization, or the packaging and selling of debt instruments, has been a dirty word in Europe since the global financial crisis. But policy makers from Yves Mersch at the European Central Bank to Andrew Haldane at the Bank of England are increasingly… Continue reading Securitization In Europe
Ludwig von Mises Institute of Canada – But the Progressives Told Us Abenomics Would Be Great for Japan But the current numbers say that Japan’s robust real GDP growth has fallen sharply to 1.1 percent by the third quarter, and despite the weaker yen Japan’s November trade deficit was the largest on record, with a… Continue reading Is Abenomics Saving Japan?
The Financial Times – ‘Credit Cassandras’ say strong demand for risky bonds is a sign of frothy markets Perhaps the foremost of these “credit Cassandras” is Jeremy Stein, the US Federal Reserve governor who warned in February that markets may be overheating. “A prolonged period of low interest rates, of the sort we are experiencing… Continue reading High Yield Bonds
The Financial Times – ECB modestly successful in tempering eurozone rates divergence The degree of fragmentation will disappoint the ECB and fuel its concern about constraints on private-sector credit flows to the eurozone “periphery” economies. Mario Draghi, president, warned earlier in December that it was “essential that the fragmentation of euro area credit markets declines… Continue reading Europe
The Wall Street Journal – Crude-Oil Impurities Are Probed in Rail Blasts Fiery Accidents Attract Scrutiny From Regulators, Industry Crude is flammable, but before being refined into products such as gasoline it is rarely implicated in explosions. Yet earlier this week, when a BNSF Railway Co. train hauling 104 tank cars filled with Bakken crude… Continue reading More On Transporting Crude Oil By Rail
The New York Times – Simon Johnson: The Rich Country Trap Until about 10 years ago, it was fashionable among policy makers to suppose that relatively rich countries had grown or evolved beyond the stage where they would be vulnerable to debilitating financial crises. The reasoning was that financial markets had become sophisticated, in part… Continue reading Managing Risk
The Wall Street Journal – John B. Taylor: The Economic Hokum of ‘Secular Stagnation’ Blaming the market for the failure of bad government policies is no more persuasive now than it was in the 1930s The evidence continues to mount that government policy has been to blame for the disappointing economic performance in recent years.… Continue reading Stagnation
The Wall Street Journal – A Few Brave Investors Scored Huge, Market-Beating Wins A trader who made more than $100 million from a $10 million bet against gold. A hedge fund that gained 42% after a bullish wager on stocks. A firm that saw returns of 48% thanks in part to soaring Japanese stocks. These… Continue reading Bet Big, Win Big
The Wall Street Journal – Year-end Factors Drive Demand for Fed’s Reverse Repos A push to tidy up balance sheets among banks and other financial firms is driving surging demand at a Federal Reserve lending facility currently in a testing phase, market participants say. Over recent days, financial firms that are eligible to participate in… Continue reading Reverse Repos
Bloomberg.com – Treasuries Love Affair Endures After First Loss Since ’09 For all the losses on Treasuries this year, demand for U.S. government debt remains stronger than before the financial crisis. Investors bid for $5.75 trillion of notes in government auctions in 2013, or 2.87 times the amount sold, data compiled by Bloomberg show. That’s… Continue reading Treasury “Demand” Or Just Fed Buying?
<Click on chart for larger image> The Wall Street Journal – Two Trains Derail in North Dakota,Triggering Evacuation A grain train and a crude-oil train traveling on adjacent tracks derailed Monday in North Dakota, sparking a fire and explosions that prompted evacuation warnings. The accident occurred at about 2 p.m. Central Standard Time when a… Continue reading More Trouble Transporting Crude By Rail