Real Time Economics (WSJ Blog) – Huge Fed Balance Sheet Has Historical Precedent The massive and growing size of the Federal Reserve‘s balance sheet is the source of enduring angst for many central bank watchers, but a note from Morgan Stanley observes that on a relative basis, we’ve been here before. The bank told clients… Continue reading The Federal Reserve’s Balance Sheet
The Financial Times – More bond investors bet on US rate rise More US bond investors are seeking new ways to hedge against the risk of a sharp rise in interest rates in case growth in the world’s largest economy picks up and the Federal Reserve starts to wind up its current stimulus policies. The… Continue reading Bond Bears
MarketBeat (WSJ Blog) – Is Economy Facing Another False Spring? Many economists expect growth to slow some from the first quarter of the year into the second quarter as federal spending policies start to bite. Still, they don’t see a repeat of the past three years, when hopeful starts gave way to discouraging summers. “Is… Continue reading Will The U.S. Experience Another Summer Swoon?
The Financial Times – Cyprus banks shut until Thursday The closure of Cyprus’ banks was extended until Thursday as lawmakers prepared to hold a vote on a €10bn bailout plan that imposes a levy on all the debt-laden island’s bank accounts. Under the deal struck with international lenders in the early hours on Saturday, a… Continue reading More On Cyprus
The Wall Street Journal – Treasury Scrutinizes a Shortage of Notes The U.S. Treasury Department is probing whether traders in the $11 trillion Treasury market hoarded securities to drive up the price of 10-year notes, one of the world’s most-used benchmarks. Regulators are concerned that the market function smoothly and without abnormal price activity, said… Continue reading Last Week’s 10-Year Shortage
The Wall Street Journal – Fed’s Crystal Ball Could Use Some Shining The two-day meeting starting Tuesday will update the Fed’s expectations for the economy. The last batch of forecasts in December came before the end of the payroll tax holiday or the government’s budget sequester. Fed Chairman Ben Bernanke has estimated just the latter… Continue reading The Federal Reserve
<Click on chart for larger image> MarketWatch.com – What Shiller P/E ratio says about market’s top Valuation is a crucial part of the discussion, which has drawn attention to one gauge that measures how heated the stock market is. It’s called the CAPE ratio (but also goes by Shiller P/E and P/E10 ). The tool… Continue reading A Look Into The Shiller P/E Ratio
<Click on chart for larger image> The Financial Times – Tech groups swell US cash pile The swelling cash reserves of Apple and a handful of other technology companies have raised the overall liquidity of corporate America to record levels, data revealed on Monday. Around $6 out of every $10 added to the corporate sector’s… Continue reading Cash on the Sidelines
The Financial Times – Monetary easing alone will not fix Japan The unveiling by Shinzo Abe, Japan’s new prime minister, of “Abenomics” – with its pillars of monetary easing, fiscal stimulus and structural reform – has apparently impressed the markets so much that the yen has fallen against leading currencies and Japanese stocks have moved… Continue reading Can Japan Ever Be Fixed?
The Wall Street Journal – More Homeowners Dig Out Rising home values have lifted more borrowers out of the hole of owing more than their properties are worth, an encouraging sign for an economy still closely tied to the health of the housing market. The number of “underwater” homeowners in the fourth quarter of 2012… Continue reading Home Prices