Bloomberg.com – Caroline Baum: How Fed Learned to Stop Worrying and Love Zero For anyone whose financial memory dates back to a time when the overnight interbank rate was in double digits, the Federal Reserve’s announcement last month that zero was here to stay was nothing short of stunning. To wit, the funds rate isn’t… Continue reading The Federal Reserve’s Economic Targets
<Click on chart for larger image> AlphaAlcove (Blog) – Citi Economic Surprise Index Starting to Slide The US Citi Economic Surprise Index (CESI) hit -2 today driven by disappointing existing home sales, Richmond Fed Manufacturing Index, and dropping U Michigan Consumer Confidence. The market clearly doesn’t care (yet?) as Russell 2000 hit new all-time high,… Continue reading The Citi Surprise Index
The Wall Street Journal – Passing Debt Bill, GOP Pledges End to Deficits The House defused one potential debt crisis Wednesday, while a top Republican set the stage for a far broader debate over whether it is possible to actually balance the U.S. budget in coming years. The House resolved Washington’s most immediate fiscal problem… Continue reading Deficit Negotiations Continue
Real Time Economics (WSJ Blog) – Rising House Prices, Not Stocks, Make People Feel Wealthy As a key influence on households’ spending decisions, the health of the housing sector trumps stock-market moves, a paper released this week by the National Bureau for Economic Research claims. The study, written by prominent economists Karl Case, John Quigley… Continue reading Measuring A Potential Wealth Effect
The Wall Street Journal – Sizing Up the Default ‘Nightmare’ The debt-ceiling debate has been shelved, avoiding a U.S. default for now, but that doesn’t resolve a key issue vexing regulators and Wall Street: What would happen to the U.S. Treasury market if the government missed a debt payment? Many experts anticipate such a default… Continue reading Exploring The Possibility Of A U.S. Default
The Los Angeles Times – Estonian Twitter tirade caused by Paul Krugman becomes an ‘opera’ Nobel Prize-winning economist Paul Krugman caused an angry Twitter tirade last year from Estonia’s president, Toomas Hendrik Ilves, concerning the efficacy of the country’s economic reforms. Now the electronic spat has been turned into a 16-minute vocal piece that will… Continue reading Buy Your Tickets Now Before They Are All Sold Out
Comment This is the fallout from Tuesday night’s PBS Frontline show The Untouchables which we highlighted yesterday. The Washington Post – Lanny Breuer, Justice Department criminal division chief, is stepping down Lanny A. Breuer is leaving the Justice Department after leading the agency’s efforts to clamp down on public corruption and financial fraud at the… Continue reading Is Too Big To Jail Now Going To Change?
Charts of the Week Topics Covered This Week Include: Housing’s Effect On GDP Stock Market Correlation What Have We Learned The Last Five Years? Swap Dealers Respond To Commodity Index Changes Commodity Correlations An Updated Look At Weekly Mutual Fund Flows $150 Oil Again? Updated Look At TIPS Breakevens Updated Look At Money Market Funds… Continue reading Charts of the Week
The Financial Times – Fed to review its market communications The US Federal Reserve is set to consider further changes to its communication policy during 2013 that could complement its new 6.5 per cent unemployment threshold for raising interest rates. Ever since Ben Bernanke became chairman of the Fed in 2006 he has sought to… Continue reading The Federal Reserve Reviews Its Market Communications
<Click on chart for larger image> The Wall Street Journal – Are Mom and Pop Heading for Wall Street? Investment professionals are anticipating an influx of income- and growth-hungry mom-and-pop “retail” investors into the stock market this year—especially as the economy picks up and pressure grows for interest rates to start rising. “The key is… Continue reading Stock Inflows And The Retail Investor
The Wall Street Journal – As Recovery Takes Hold, the Federal Reserve Must Make a Graceful Exit The Federal Reserve has got into the habit of rushing in whenever the economy has shown signs of faltering. But the time is coming when the hand-holding must end, and the economy will have to walk on its… Continue reading The Federal Reserve’s Exit Strategy