BusinessWeek – Argentina’s 11-Year War With Hedge Funds However, a hardy group of “holdout” creditors, including U.S. institutional investors and a handful of elderly Argentinian pensioners, refused to participate in the nation’s 2005 and 2010 debt restructurings, wagering that they could band together to get better terms out of Buenos Aires. Last month’s scorched-earth volley:… Continue reading Argentina And Hedge Funds
The Economist – Prediction markets: Don’t bet on it Intrade retreats from American regulators Intrade’s decision to pull out of the world’s biggest market might seem like an overreaction, since it might have satisfied the CFTC simply by eliminating contracts on physical commodities. But the 2010 Dodd-Frank financial reform gave the commission broad new powers… Continue reading Intrade
<Click on chart for larger image> The Wall Street Journal – Euro-Zone Inflation Falls Sharply, Unemployment Rises Again The euro zone’s annual inflation rate fell to its lowest in almost two years in November, while a rise in joblessness in the countries at the heart of the region’s fiscal crisis pushed unemployment to record levels,… Continue reading European Unemployment, A New High
The Economist – Central banks’ power: The grey man’s burden Politicians need to set clearer goals for central banks—then leave them alone BEFORE the financial crisis, central bankers were backroom technocrats: unelected, unexciting men in grey suits, who adjusted interest rates to keep prices stable on the basis of widely agreed rules. There were a… Continue reading The New Rock Stars, Central Bankers
Comment Einstein defined insanity as doing the same thing over and over and hoping for a different result. Japan is fitting this definition perfectly. The Financial Times – Japan unveils $11bn stimulus package Japan’s government has approved its second round of stimulus in a little more than a month, as prime minister Yoshihiko Noda tries… Continue reading Japan: The Definition of Insanity
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Watch the latest video at video.foxbusiness.com Comment Yesterday Jim was on Fox Business discussing the fiscal cliff. To view the interview, click on the image above. To view any of our recent interviews click here. In the interview Jim noted that the market is dominated by fiscal cliff discussions. Comments that the negotiations are not… Continue reading Fiscal Cliff Negotiations
The Wall Street Journal – Jon Hilsenrath: Fed Likely to Keep Buying Bonds Federal Reserve officials are likely to continue buying long-term mortgage-backed and Treasury bonds in 2013 as they confront a slow-growing economy and threats of new turbulence and uncertainty related to fiscal policy. Fed officials face several important decisions at their next policy… Continue reading Fed Chairman Hilsenrath Speaks, More QE Coming
Real Time Economics (WSJ Blog) – U.S. Treasury vs. Fed: You Say Long, I Say Short With much fanfare, the Federal Reserve has been buying long-term U.S. Treasury bonds — $1.6 trillion worth. But while the Fed is subtracting from the market’s stock of long-term Treasurys, part of its campaign to bolster the U.S. economy,… Continue reading The Treasury vs. The Federal Reserve
<Click on chart for larger image> Comment Gold ETFs holdings (blue line) are a good proxy for retail demand. When retail investors buy gold ETFs, they push the fund price higher relative to the underlying metal. The ETF manager will respond by selling more shares (increasing the float) and use the proceeds to buy gold… Continue reading Gold
The Wall Street Journal – The Great 2012 Cashout Perhaps you’ve heard from various economic sages that tax rates don’t matter either to economic growth or taxpayer behavior. Don’t tell that to the companies and individuals who are busy cashing out their investments or paying dividends to get ahead of the Obama tax scythe in… Continue reading Companies Offer Special Dividends To Avoid Fiscal Cliff
Tim Duy’s Fed Watch – A Little Less Dovish… In the midst of an internal debate over policy communication, Chicago Federal Reserve President Charles Evans pulled back on his 3 percent inflation threshold in a speech yesterday. Arguably, as the only policymaker suggesting guidance well above the Fed’s stated 2 percent target, Evans was the… Continue reading The Federal Reserve’s Inflation Target