The Financial Times – Why forward guidance has failed to convince Some central banks in advanced economies have recently put themselves into an uncomfortable corner. They have started to implement “forward guidance”, which consists of communicating to the markets their views about the appropriate level of interest rates, with the aim of influencing them. Unfortunately,… Continue reading Why Forward Guidance Doesn’t Work
The Wall Street Journal – Life on Wall Street Grows Less Risky “Your No. 1 client is the government,” John J. Mack, Morgan Stanley’s chairman and chief executive from 2005 to 2009, told current CEO James Gorman in a recent phone call. Mr. Gorman, who was visiting Washington that day, agreed. The financial crisis didn’t… Continue reading Banks Try To Shed Risk
The Huffington Post – The Financial Crisis and the Second Great Depression Myth All knowledgeable D.C. types know that the TARP and Fed bailout of Wall Street banks five years ago saved us from a second Great Depression. Like most things known by knowledgeable Washington types, this is not true. Just to remind folks, the… Continue reading How Bad Was The Financial Crisis?
The Wall Street Journal – Mortgage Lenders, Home Buyers Feel Rate Squeeze Wells Fargo, J.P. Morgan Warn of Slowdown A rise in interest rates is slamming homeowners’ demand for mortgages, prompting large and midsize banks to cut jobs and warn investors of declining profitability in the home-loan business. Wells Fargo & Co., the nation’s largest… Continue reading Home Buyers Starting To Feel The Pinch
Huffington Post – JPMorgan Board Takes Some Power From Jamie Dimon JPMorgan Chase & Co’s board, under fire for the bank’s trading losses and myriad government probes, said on Monday that it was adding two directors and handing more power to its lead independent director, steps that give it extra supervision over Chairman and Chief… Continue reading J.P. Morgan
MarketWatch.com – How rising rates are killing the recovery If rising interest rates are undermining the economic recovery, then those interest rates may fall again, regardless of what the Fed says or does. This is pretty much what happened in Japan in the 1990s. It is possible we could go into deflation, in which case… Continue reading Rising Rates And The Road To Recovery
The Financial Times – A plan to finish fixing the global financial system After the global financial crisis of 2008, the leaders of the Group of 20 leading nations mandated the international Financial Stability Board to co-ordinate reform to correct the faultlines in the financial system. The ultimate goal is to build an open and… Continue reading Basel III
MSN Money – Stocks aren’t bargains anymore “We are in a bull market that is more than four years old,” with the rally beginning in March 2009, he noted. “Four years into the economic expansion, I don’t think that stocks are the greatest bargain anymore.” While he owns shares in Malaysia, Thailand, Hong Kong and… Continue reading Doom And Gloom
Federal Reserve Bank of San Francisco – John C. Williams: Bubbles Tomorrow and Bubbles Yesterday, but Never Bubbles Today? We economists like to explain things using highly stylized models. We build make-believe worlds, populate them with creatures that act according to strictly prescribed rules, and analyze what happens. Or, as my wife said after I… Continue reading Bubble Talk
The New York Post – John Crudele: The jobs market is going to get worse It will only get worse from here. Jobs growth was mediocre in August and slower than originally advertised in June and July. And it will be even lousier in September. Before you start sending me hate mail, let me say… Continue reading The Mediocre Jobs Market
None Today
Comment Friday Jim was on Reuters talking about the payroll report and Federal Reserve tapering. To watch it, click on the picture above. To view any of our recent interviews. click here. In the interview Jim argued the Federal Reserve will not announce a taper at the September 18 FOMC meeting. However, as noted below,… Continue reading Taper Talk