The Economist – Index investing: Category fillers Nigerian debt gets the “emerging-market” seal of approval ECONOMIC fundamentals matter to investors. So too do classifications. At the start of this month Nigeria became the second country in Africa, after South Africa, to join J.P.Morgan’s local emerging-market government-debt index. Since the bank decided to include the country’s… Continue reading Why Getting Into An Index Matters
The New York Times – Billions in Hidden Riches for Family of Chinese Leader The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a… Continue reading China
The Economist – Buttonwood: Signal failure Why illiquidity in one asset can spread quickly to others THE flash crash of May 6th 2010 titillated financial academics and lovers of mystery alike. Within the space of about 20 minutes the prices of thousands of securities on Wall Street collapsed, sometimes by more than 60%, before recovering… Continue reading Illiquid Assets
The Economist – Sovereign credit-default swaps: Messenger shot, message not A ban on insuring against European defaults has unintended consequences EUROPEAN policymakers fret about the value of euro-zone sovereign bonds in the manner of a parent worried by a sick child’s temperature. One way of reading the thermometer is to look at the price of… Continue reading CDS
The Financial Times – Nine more banks added to Libor probe Nine of the world’s biggest banks are facing increased scrutiny from US state prosecutors probing alleged attempts to manipulate the lending gauge known as Libor. Eric Schneiderman, New York attorney-general, and George Jepsen, Connecticut attorney-general, have sent subpoenas to Bank of America, Bank of… Continue reading Lie-bor
Acting Secretary of State Dean Acheson, standing at center, and representatives of 28 Allied nations met in Washington in 1945 to sign the pact reached at the Bretton Woods conference. The New York Times – Transcript of 1944 Bretton Woods Conference Found at Treasury A Treasury economist rummaging in the department’s library has stumbled on… Continue reading Bretton Woods Transcript Found
The Financial Times – Fed ‘steady-as-she-goes’ ahead of election The US Federal Reserve revised its view on the economy but made no change to monetary policy ahead of big decisions on fiscal policy expected after November’s election. Making minimal changes to its statement, the rate-setting Federal Open Market Committee said that “household spending has advanced… Continue reading The FOMC Meeting
MarketBeat (WSJ Blog) – The 30-Year Bull Market in Bonds Is Over, BofA Says Pulling out of a bull market is hard to do, and the longer the run, the harder it is to call it quits. But here’s the thing, the longer it lasts, the more likely it is to attract fast money that… Continue reading Shocking News, More Bond Bearishness!
The Financial Times – Heed churlish Mervyn King on limits of QE In a speech on Tuesday night, Mr King outlined the limits to monetary policy. Following all the talk from the International Monetary Fund about magical multipliers, Mr King offered a much-needed dose of economic reality. Taking a leaf out of Japan’s “lost decade”… Continue reading The Limits Of Monetary Policy
The Financial Times – World weighed down by debt won’t grow Today, politicians and policy makers seem unable to handle the truth – the prospect of little or no economic growth for a prolonged period. They refuse to acknowledge that expansionary fiscal and monetary policies may only provide temporary palliative relief, but cannot restore the… Continue reading More Debt Is Not The Answer
The Wall Street Journal – U.S. Firms Get Dinged in Europe Europe’s economic woes are washing over U.S. multinational companies, contributing to a season of weak corporate earnings. Domestic sales are growing, as the U.S. housing market and consumer confidence recover. But China’s economy has slowed, robbing U.S. companies of their most reliable growth engine… Continue reading Multinational Earnings