Business Insider – UniCredit Plunge Gets Worse: Italian Megabank Now Off 45% Year To Date UniCredit, the major Italian bank that got clobbered just about every day last week is… getting clobbered some more today. The stock is off over 12% today. The company’s stock ended 2011 and 4.2284. At its current price of 2.306… Continue reading Italian Banks
Comment We were recently asked if the U.S. unemployment rate has any bearing on which party’s presidential nominee becomes elected. Below are our findings. <Click on chart for larger image> The table below shows the U.S. unemployment rate, the incumbent and challenger of each presidential election along with the winner of each election from 1904… Continue reading The U.S. Unemployment Rate and Presidential Elections
Bloomberg.com – Encouraging the Right Kind of Greed Among Banks We need to enforce rules to balance natural greed with capital requirements so that greed can create productive risk-taking and competition — not short-term extraction. Here are five possible ways to do that. Make Swaps Public: In Las Vegas, you need to have actual money… Continue reading Bank Regulation
The Wall Street Journal – Mohamed El-Erian: Investing in a ‘Fat Tail’ World “Fat tails”—the technical term for the extremes of an outcome distribution—are risks for any global system that loses its anchors. Economies and markets function differently, companies and households feel unsettled, and policy measures become less effective…Navigating such unpredictability requires investors to rely… Continue reading Mohamed El-Erian’s Take On Fat Tail Investing
The Financial Times – Lawrence Summers: Current woes call for smart reinvention not destruction How justified is disillusionment with market capitalism? This depends on the answer to two critical questions. Do today’s problems inhere in the present form of market capitalism or are they subject to more direct solution? Are there imaginable better alternatives? The… Continue reading Lawrence Summers Questions Capitalism
Ekathimerini.com – Ex minister says Acropolis could be leased Conservative New Democracy MP and former deputy health minister Gerasimos Giakoumatos, suggested on Monday that the Acropolis and other archaeological sites be leased to private firms in a bid to bring much-needed revenue into the debt-ridden country. In comments made to Vima FM radio station, Giakoumatos… Continue reading Desperate Times Call For Desperate Measures
Bloomberg.com – Draghi May Copy Bernanke on Path to Low Rates European Central Bank President Mario Draghi may act more like Ben S. Bernanke than Jean-Claude Trichet in 2012. With the euro area’s debt crisis pulling its economy into a second recession in three years, Draghi soon may cut the ECB’s benchmark interest rate below… Continue reading EU Policy
The Wall Street Journal – Robert Barro: An Exit Strategy From the Euro The EU specifies with great detail how candidate countries can qualify for euro membership, but it offers no recipe for exit or expulsion. A natural possibility would be to start by throwing out the least qualified members, based on lack of fiscal… Continue reading Euro Exit Strategy
Bloomberg.com – William D. Cohan: How Wall Street Turned a Crisis Into a Cartel Almost 65 years ago, in 1947, the U.S. government sued 17 leading Wall Street investment banks, charging them with effectively colluding in violation of antitrust laws. In its complaint — which was front-page news at the time – — the Justice… Continue reading The Wall Street Cartel
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<Click on chart for larger image> MarketBeat (WSJ Blog) – Why Traders Don’t Trust the ADP’s Read on Friday’s Jobs Report RBC’s Tom Porcelli sent along this chart that illustrates the reason for the skepticism about ADP numbers, particularly around the holidays. As you can see, since 2006, the average gap between initial December ADP… Continue reading ADP vs. Nonfarm Payrolls
The Wall Street Journal – Euro-Zone Imbalances Persist The European Central Bank delivered some holiday cheer last month to beleaguered crisis-fighting policymakers; the ECB’s move to provide long-term loans to euro-zone banks helped drive down yields on government debt, assuring officials that their Christmas vacations wouldn’t be interrupted by another spasm of the crisis. But… Continue reading Europe