The Financial Times – Eurozone exits and defaults may be only escape Given Italy’s current political mess, it is hardly surprising that the markets are reluctant to give the country the benefit of the doubt. There are two obvious ways of mitigating the damage. The first is to buy time for Italy and the rest… Continue reading Can The Eurozone Survive?
Bloomberg.com – MF Global Clients May Have to Share Cash MF Global Inc.’s commodity customers may be required to share some of their cash with other clients unless money missing from some accounts is found, said the head of the group overseeing the liquidation of the broker-dealer. “Distribution of the assets will be pro rata,… Continue reading MF Global Customers Might Have To Learn To Share
Bloomberg.com – Kocherlakota Calls for Fed Contingency Plan Covering Economic Scenarios Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. central bank should develop and make public a contingency plan that would explain how it would react to developments in the economy. Such a contingency plan by the policy-setting Federal Open Market Committee… Continue reading Should The Federal Reserve Offer Contingency Plans?
MSNBC – Nearly 29% of mortgaged homes underwater, report finds A whopping 28.6 percent of homeowners with mortgages owe more on their loans than their homes could sell for, according to quarterly data released Tuesday by Zillow, a real estate website. That’s up from 26.8 percent in the second quarter. Home values declined only 0.2… Continue reading Underwater Mortgages
CNBC.com – IMF Chief Warns World Economy Risks ‘Lost Decade’ The head of the International Monetary Fund warned on Wednesday that Europe’s debt crisis risked plunging the global economy into a “lost decade” and said it was up to rich nations to shoulder the burden of restoring growth and confidence. Christine Lagarde told a financial… Continue reading Christine Lagarde Warns Of Another Lost Decade
The Wall Street Journal – Model-Driven Strategies Burn Currency Traders Computer-driven currency traders are learning that sometimes you just have to go with your gut. Big currency hedge funds like FX Concepts LLC and Ikos are tweaking, and in some cases overriding, computer models they blame for a disappointing performance this year. These models, which… Continue reading Model Trading
None Today
The Financial Times – Italy’s bonds plunge to danger zone “In Greece, the developments are cataclysmic,” said Wolfgang Schäuble, the German finance minister, as he headed into the meeting. “Every day it’s a new situation.” But he also insisted that Italy, while too big to be rescued by the existing EU bail-out fund, was not… Continue reading Italy
Business Insider – ECRI’s Lakshman Achuthan Is Still Forecasting A Recession Truth be told, economic data from the United States have not fallen off the cliff, and people are now upping their forecasts as data came out better than expected. But Lakshman Achuthan of Economic Cycle Research Institute is still forecasting a recession as he… Continue reading Predicting Recessions
<Click on chart for larger image> The Wall Street Journal – Financing Markets Tighten Spigots European banks are placing their money with the region’s central bank instead of lending it out. And in the U.S., money-market funds are again ratcheting back the amount of money they lend to European banks. That is raising the cost… Continue reading ECB Deposits Reach A New High
<Click on chart for larger image> The Financial Times – Saving the euro is the wrong goal As the European ship heads for the rocks, so the officers in charge are being thrown overboard. This week could see the departure of the prime ministers of both Greece and Italy. But while politicians may come and… Continue reading Save The Euro
MarketWatch – You cannot push on a string One of the Federal Reserve’s dual mandates should be dropped…When it was created nearly 100 years ago, the Fed was given one mission: create enough liquidity to take care of the needs of the economy — but not so much as to cause inflation. As simple as… Continue reading Revisiting The Federal Reserve’s Dual Mandate