The Economist – Buttonwood: Gas, grains and growth Making sense of the fall in commodity prices IS IT good news or bad news? Commodity prices have been falling sharply in recent weeks—the S&P GSCI index dropped by 13% in May alone, the biggest monthly decline in two years. That amounts to a tax cut for… Continue reading Commodities
The Financial Times – German business confidence at 2-year low German business confidence has fallen to its weakest level in more than two years, as the eurozone crisis takes its toll on Europe’s largest economy. The Munich-based Ifo institute said its “business climate” index had dropped for a second consecutive month, from 106.9 in May… Continue reading Germany
Reuters – Illinois in poorest fiscal condition of all states Auditor general’s report cites pension, other liabilities Illinois’ financial condition continued to deteriorate in fiscal 2011, leaving it the state with the lowest level of net assets in the country, as its liabilities, including money owed for public pensions, grew, according to a report released… Continue reading Busted Public Finances
The Daily Mail (UK) – Starving Greeks queue for food in their thousands as debt-wracked country finally forms a coalition government… but how long will it last? Queues form as desperate people received food handouts from Crete’s farmers Antonis Samaras sworn in as prime minister as head of conservative-led three party coalition New coalition vows… Continue reading How Bad Is It In Greece?
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The Wall Street Journal – Fed Extends Operation Twist U.S. Federal Reserve officials signaled heightened worries over the economy on Wednesday, extended a program shifting their holdings toward longer-term securities through the end of the year and said they were “prepared to take further action” if needed. The central bank stopped short, however, of immediately… Continue reading The Federal Reserve Extends Operation Twist
The Economist – The Fed acts, just Final thought: by extending the expiration date of the programme to December 31st, the Fed accentuates the stimulus withdrawal syndrome scheduled to begin on that date. The Bush tax cuts and payroll-tax cut expire then, and the sequester of automatic spending cuts takes effect on January 2nd. Should… Continue reading The Federal Reserve’s Projections
Bloomberg Businessweek – Trading Surge in Index Behind JPMorgan Loss Signaling Unwind Trading in the credit derivatives index that contributed to JPMorgan Chase & Co. (JPM) (JPM)’s losses in its London chief investment office soared to a record yesterday in a sign that the biggest U.S. bank may be unwinding its position, according to data… Continue reading Is J.P. Morgan In The Process Of Unwinding Its Massive IG9 Trade?
The Wall Street Journal – Jon Hilsenrath: How Has Risen, Rates Fallen Since Fed’s Bond-Buying Moves Since 2008, the Federal Reserve has increased its holdings of long-term government bonds and mortgage-backed securities to more than $2.6 trillion from less than $500 billion as part of an effort to stimulate markets and boost the economy. It… Continue reading Is QE Still Effective?
Bloomberg.com – Bernanke Signals More Easing Likely if Job Growth Wanes Bernanke, speaking at a Washington press conference, said policy makers are focusing “primarily” on the outlook for jobs in deciding whether to ease further, and more action would be needed without “sustained improvement in the labor market.” Payrolls grew at the slowest pace in… Continue reading Bernanke Will Be Watching The Jobs Reports
<Click on chart for larger image> The Wall Street Journal – Spain Hits Bond Target, but at Steep Cost The Spanish Treasury sold more than the maximum €2 billion ($2.54 billion) worth of bonds it had planned to offer Thursday, but paid a steep price to do so, in the first bond auction since Spain… Continue reading Spain Continues To Pay Up At Auction
Bloomberg.com – The One Man Who Can Save Europe With the EU’s politicians unable or unwilling to act, everything depends on the European Central Bank and its chief, Mario Draghi. That may sound familiar. Once the fiscal stimulus of 2009 had passed, the U.S. Congress and administration fought to a draw, leaving the economy’s prospects… Continue reading The ECB As A Lender Of Last Resort