The Economist – The twilight of the central banker Low interest rates represent accommodative monetary policy. This is a venerable error, also popular during the 1930s. Central banks change the cost of money—the interest rate—in order to clear labour markets. Policy is accommodative not when interest rates are low in absolute terms, but when they… Continue reading An Analysis Of World Central Banks
The Wall Street Journal – Has Peak Oil Peaked? A new report from the Harvard Kennedy School’s Belfer Center for Science and International Affairs suggests the world could be capable of producing 110.6 million barrels a day by 2020, up from 93 million barrels a day now. Moreover, the report concludes more than 80% of… Continue reading Crude Oil
FT Alphaville – China’s remarkable short USD position Remember the days when Chinese banks used to routinely drain dollars from Chinese corporates? The days when the Chinese corporate sector was a net dollar seller?Those days, it seems, may have very abruptly come to a halt. Consider the following chart from Standard Chartered on Tuesday. It… Continue reading China Is Short The US Dollar
Bloomberg.com – Glass-Steagall Return Would Boost Banks, FDIC’s Hoenig Says A revival of the Glass-Steagall Act, the Depression-era law that separated commercial and investment banking, is “absolutely necessary” to protect the U.S. financial system, Federal Deposit Insurance Corp board member Thomas Hoenig said in a Bloomberg Radio interview. Using Dodd-Frank Act powers to break up… Continue reading Would A Revival Of The Glass-Steagall Act Help Banks?
CNBC.com – Bank Bailouts Are Here to Stay ‘Forever’: Economist Government bailouts of big banks are here to stay and are bad for economies because they channel capital to uncompetitive industries and sustain high levels of debt, according to a professor of economics and capitalism. “Economies where the banks are really influenced by their governments… Continue reading Bank Bailouts Are Here To Stay
FT Alphaville – Of housing booms and busts And then there is Norway… where house prices have just kept rising and the IMF estimates an overvaluation of in the region of 15-20 per cent.The San Francisco Fed likes Norway’s ever so buoyant property market so much they have used it in a paper looking at… Continue reading Norway’s Housing Bubble
The Wall Street Journal – Mark Cuban: High-Frequency Traders Are the Ultimate Hackers WSJ: When did you start becoming concerned that rapid-fire trading was a problem? Mark Cuban: When the flash crash hit, that got me looking at algorithmic trading and the state of the market. I came to realize that the stock market no… Continue reading Mark Cuban Discusses The Stock Market
None Today
<Click on chart for larger image> Bloomberg.com – Libor Guardians Said to Resist Changes to Broken Rate The U.K. bankers and regulators charged with reviewing Libor in the wake of regulatory probes are resisting calls to overhaul the rate because structural changes risk invalidating trillions of dollars of contracts. The group, established by the British… Continue reading LIBOR
<Click on chart for larger image> The Wall Street Journal – Spain, Cyprus Request Bailout Aid Spain and the small island state of Cyprus formally became the fourth and fifth countries to request aid from the euro zone’s bailout funds Monday, extending a casualty list in a protracted regional debt crisis that is threatening to… Continue reading Europe
<Click on chart for larger image> Business Insider – Deutsche Bank Hammers Another Nail Into The Case-Shiller Coffin Tuesday morning, we get the April Case-Shiller home price index. Economists estimate that the 20-city index climbed 0.4 percent month-over-month. But prices are also expected be down by 2.3 percent year-over-year. However, we’ve heard a number of… Continue reading Questioning The Case Shiller Index
MarketWatch – The Treasury won’t do the twist The Federal Reserve’s latest efforts to push long term interest rates down is running up against the Treasury’s attempt to lock in today’s historically low borrowing costs. Right now, the central bank is trying to twist long term rates lower by selling Treasury bills from its portfolio… Continue reading The Treasury vs. The Federal Reserve