Business Insider – This Magazine Cover Shows Just How Pissed The Germans Are With Mario Draghi Last week the ECB unexpectedly decided to cut interest rates. This week, the ECB hinted that it could engage in Quantitative Easing at some point in the future. This of course has the Germans spitting mad. The Telegraph’s Ambrose… Continue reading The Germans Hate Draghi
<Click on chart for larger image> Bloomberg.com – Matthew C Klein: Will China’s New Economic Reforms Be Enough? Western observers have a history of misinterpreting events in China. Even so, three announcements from this week’s meeting of the Chinese Communist Party look promising. According to Xinhua, the government’s official press agency, private investors will be… Continue reading Chinese Reform
<Click on graphic for larger image> The New York Times – Around the World, Inflation Is Falling to Levels Not Seen for Years Central banks now generally target an inflation rate of 2 percent, and view figures below that potentially as alarming as figures above it. At a news conference in September, Ben Bernanke, the… Continue reading Falling Inflation
The Wall Street Journal – Ackman Makes Big Bet on Fannie, Freddie Investor Buys 10% Stakes as Wall Street Jousts With Washington Over Fate of Mortgage-Finance Giants An audacious bid by activist investors to benefit from the U.S. housing recovery escalated Friday, when William Ackman’s Pershing Square Capital Management LP disclosed nearly 10% stakes in… Continue reading Fannie/Freddie
The Wall Street Journal – Treasury Arm Gets Earful From Asset Managers The asset-management industry is pushing back against a powerful, yet little-known Treasury Department office that is laying the groundwork for tougher federal regulation of mutual funds and other asset managers. Large firms such as BlackRock Inc., Pacific Investment Management Co. and Fidelity Investments… Continue reading ‘Systemically Important’ Money Managers
The New York Times – Lars Peter Hansen, the Nobel Laureate in the Middle Lars Peter Hansen understands why he is being asked, but he isn’t comfortable with the question. “Are financial markets efficient or irrational?” repeats Professor Hansen, a University of Chicago economist. “I don’t really know how to answer that.” Yet since being… Continue reading Efficient Market Hypothesis
Deflation At The Federal Reserve (via @Volslinger)
The Wall Street Journal – Jon Hilsenrath and Victoria McGrane: Yellen Stands by Fed Strategy Janet Yellen, the White House’s nominee to run the Federal Reserve, suggested she would stick to plans to wind down the central bank’s $85 billion-a-month bond-buying program in the coming months if the economy perks up. Fed officials are trying… Continue reading Yellen Speaks, No Taper Soon
The Financial Times – Corporate default risk models are broken Half a decade of loose monetary policy in the US has produced a curious reaction in the analytical frameworks that attempt to forecast the rate at which the country’s companies will default – the models have gone mild. Even as leverage and signs of credit deterioration… Continue reading How to Measure Defaults
The Economist – Buttonwood: Here we go again Governments don’t like strong currencies Some might have little sympathy for the euro zone. In aggregate it has a current-account surplus and its currency has been the weakest of the big three since the financial crisis (see chart). At a time when trade growth has slowed significantly—the… Continue reading Do Governments Want Strong Currencies?
<Click on chart for larger image> The Wall Street Journal – EU Inflation Rate Falls to Four-Year Low Adds to Fears Bloc Could Enter Prolonged Period of Deflation The annual rate of inflation in the 28-member European Union fell to its lowest level in four years during October, adding to fears the bloc could be… Continue reading European Inflation