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Unemployment Benefits’ Shifting Landscape

July 11, 2013

The Wall Street Journal – Flaws in U.S. Unemployment System Leave Economy Vulnerable For decades, states have offered eligible unemployed workers benefits for up to 26 weeks (with the federal government helping to pay for additional weeks in severe recessions). Now nine states—including Florida, Georgia, Michigan and Missouri—have reduced the maximum duration; several set a… Continue reading Unemployment Benefits’ Shifting Landscape

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Investing When Traditional Assets Are Overvalued

July 11, 2013

The Financial Times – The investor’s dilemma Stocks are expensive. Bonds are expensive. What is an investor to do? Unfortunately, the only answer appears to be to invest in new and unfamiliar assets, taking new and unfamiliar risks. Both equities and bonds look expensive compared with their own history (dramatically so in the case of… Continue reading Investing When Traditional Assets Are Overvalued

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Newsclips

Cartoons

July 11, 2013

Charts of the Week

Charts of the Week

July 10, 2013

Charts of the Week Topics Covered This Week Include: The Bond Selloff In Perspective The Bond Selloff In Perspective Belated Look At Friday’s Bond Market Selloff An Updated Look At ETF Assets Assets In Long-Term Treasury ETFs Transporting Crude By Rail Employment In Pictures Employment In Pictures Is The VIX Flawed? The Nikkei Is A… Continue reading Charts of the Week

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Newsclips

Gold Lease Rate Rises

July 10, 2013

<Click on chart for larger image> The Financial Times – Gold borrowing cost hits post-Lehman high The lack of liquidity in the leasing market has pushed gold forward rates, known as “gofo”, into negative territory, meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that… Continue reading Gold Lease Rate Rises

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John Kay Discusses Quantitative Easing

July 10, 2013

The Financial Times – John Kay: Quantitative easing and the curious case of the leaky bucket Quantitative easing, a term first widely used in Japan in the 1990s, does not have an agreed precise definition. It describes a policy in which the central bank buys assets from the financial sector, and does not necessarily –… Continue reading John Kay Discusses Quantitative Easing

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Newsclips

Muni Bond Funds See Large Outflows

July 10, 2013

The Wall Street Journal – Investors Yank Money from Municipal-Bond Funds Investors yanked $13.5 billion in cash from mutual funds that invest in municipal bonds in June, according to Lipper FMI, a painful stampede that helped drive up yields in the usually sleepy market. Retail investors are big buyers of muni bonds for their tax-free… Continue reading Muni Bond Funds See Large Outflows

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Why Rate Hikes May Be A Good Thing

July 10, 2013

MarketWatch.com – Rate increases can actually be bullish Commentary: Yield curve over last month has steepened You’re wrong if you think that interest rate increases over the last month are bad for the stock market. That’s because not all rate hikes are created equal. And the kind that we’ve seen over the last month is… Continue reading Why Rate Hikes May Be A Good Thing

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Newsclips

Is The VIX Flawed?

July 10, 2013

<Click on chart for larger image> CNBC – Stock ‘Fear Gauge’ Flawed, Citi Equity Trading Chief Says The VIX is widely followed as an indicator of investor sentiment, although there has long been debate over its efficacy as more financial instruments are derived from it. “It’s still relevant in extremes, but not in a normal… Continue reading Is The VIX Flawed?

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Mohamed El-Erian Speaks

July 10, 2013

The Financial Times – Mohamed El-Erian: Markets Insight: Sci-fi world of central bank action This zero-bound aberration led some analysts to characterise equities as “safer” than bonds. Some even claimed they were the “new risk-free asset”. And the impact on asset allocation models could be quite dramatic. In pursuing the investment implications today, investors would… Continue reading Mohamed El-Erian Speaks

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Newsclips

Asset Managers Regain Some Trust

July 10, 2013

The Financial Times – Asset management hits record level The animal spirits are stirring again in the markets as the asset management industry grows to a record level and shrugs off some of the debilitating effects of the financial crisis. The amount of money invested globally by asset managers has for the first time surpassed… Continue reading Asset Managers Regain Some Trust

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The Bond Market

July 10, 2013

Reuters.com – Analysis: Old normal for bonds rather than fragile new world The global bond market shock of recent weeks may be closer to an ‘old normal’ than some new world of fragile, over-regulated markets posited by many banks and brokers to explain the rout. One narrative behind the surge in bond yields around the… Continue reading The Bond Market