Bloomberg.com – Don’t Make Banks Too Small to Succeed Calls by former Citigroup Inc. Chief Executive Officer Sanford Weill and others to break up the big banks reflect lingering public fear and anger toward financial institutions that seem too big to fail. These calls, however, ignore the unintended consequences of making our global banks too… Continue reading Too Small To Succeed
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Charts of the Week Topics Covered This Week Include: Election Update Recession Outlook Youth Unemployment In Europe Bond Fund Flows An Update of Mutual Fund Flows Historical Look At ECB Bond Purchases Long Treasury vs S&P 500 Rough Month For Stocks Ahead? Low Volume Is Nothing To Worry About Energy Prices Continue Higher Retail Gas… Continue reading Charts of the Week
Yesterday at 1:20 PM CT Pimco’s Bill Gross tweeted the following: Gross: Draghi appears willing to write 2-3 year “checks” to peripherals. Very reflationary. Buy gold, TIPS, real assets. Essentially he is saying that the ECB bond buying program is a done deal and it is very bullish for risk-on assets like gold and TIPS. … Continue reading The Power of Twitter – It Is The New Tape
Bloomberg.com – ECB Plan Said to Pledge Unlimited, Sterilized Bond-Buying European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB… Continue reading Is Unlimited, Sterilized Buying An Oxymoron?
PrudentBear.com – An Exit Strategy From Bernanke When you include fiscal policy, there are three separate exits to be considered. There’s the rise in interest rates needed to get short-term and long-term rates safely above the rate of inflation, thus bursting the pervasive global asset and commodity bubbles and restoring positive real returns to savers.… Continue reading Discussing Bernanke And Exit Strategies
<Click on chart for larger image> The Financial Times – Bond funds – the awakening It is Tuesday, so it must be time for a new fixed income fund. Man Group is one the latest, having launched a $50m hedge fund recently which trades bond futures and other derivatives. It hopes that the fund, which… Continue reading Bond Funds
<Click on chart for larger image> The Wall Street Journal – In Europe, Signs of a Jobless Generation Euro-zone youth unemployment will remain elevated for at least the next half-decade, the International Labor Organization said Tuesday, forecasting a small reduction in the jobless rate will come from young people withdrawing from the labor market instead… Continue reading Unemployment For The Youth In Europe
Zero Hedge – Is The Fed Responsible For The Great Financial Crisis? Jim Reid, Deutsche Bank: The history of business cycles in the US There are those that suggest that the Fed’s inception back in 1913 has allowed for longer business cycles and for those interested we have colour coded those cycles (above) that occurred… Continue reading Business Cycles And The Federal Reserve
The Financial Times – Banking union is critical for eurozone Next week the European Commission will publish its proposal for the launch of a common bank supervisor, including thoughts on the broader aspect of banking union. Along the way, disagreements between Brussels and Berlin have surfaced. However, there can be no doubt that the European… Continue reading Banking Crisis In Europe
<Click on chart for larger image> Bloomberg.com – Food-Stamp Use Climbs to Record, Reviving Campaign Issue Food-stamp use reached a record 46.7 million people in June, the government said, as Democrats prepare to nominate President Barack Obama for a second term with the economy as a chief issue in the campaign. Participation was up 0.4… Continue reading Record Food Stamp Usage
The Financial Times – Europe’s money market funds future in focus It would be good news for security guards and manufacturers of safe boxes. Rather than paying banks interest on overnight deposits, the European Central Bank would charge them for the privilege. Banks would then withdraw cash from the ECB and stick it in their… Continue reading Money Market Funds In Europe