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September 23, 2011
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The Federal Reserve – September FOMC Statement To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400… Continue reading Operation Twist Begins
MarketBeat (WSJ Blog) – Treasury Yields Lowest Since 1940s Here’s where Operation Twist is helping the most so far: The 10-year Treasury note ended trading today yielding 1.871%, the lowest since the 1940s. The 30-year note is still far from its record low, but isn’t far away. At about 3%, the 30-year bond yield is… Continue reading Lowest Yields Since 1940s
The Wall Street Journal – Moody’s Downgrades BofA, Wells Fargo, Citi Moody’s Investors Service cut the debt ratings of Bank of America Corp., Citigroup Inc. and Wells Fargo & Co., warning that bond investors shouldn’t expect a full-fledged government bailout the next time a big bank runs into trouble. The U.S. government is likely to… Continue reading Downgrades For Everyone
MarketBeat (WSJ Blog) – Operation Twist: Maybe a Bank Subsidy Our fingers are still hot from typing a post about how Operation Twist really doesn’t accomplish much for the broader economy, but now we’ve just received another idea: Maybe it’s a big subsidy to the banks. The concept comes from Lee Quaintance and Paul Brodsky… Continue reading Operation Twist & The Banks
<Click on chart for larger image> The Financial Times – Lex: Greece: postponing the inevitable Once more unto the breach, dear Greeks. Athens has agreed another package of last-minute measures to secure another €8bn of emergency funding. Once again it has been forced to implement a policy that is not working – ever more severe… Continue reading Greece
The Financial Times – Mohamed El-Erian: French banks could tip Europe back into a full-blown banking crisis Conventional wisdom may now be only half right when it comes to solving Europe’s mess. Fixing the sovereign debt problem is still necessary, but it may no longer be sufficient. Europe must also move quickly to stabilise the… Continue reading Funding Problems At French Banks
Bloomberg.com – Why Identifying a Bubble Is So Much Trouble Here are the central facts: High valuations are, on average, followed by many years of poor returns, and vice versa. High valuations are not, on average, followed by years of good cash-flow growth, or by ever-higher valuations…No one substantially disputes these facts. The question is:… Continue reading How To Spot A Bubble
Real Time Economics (WSJ Blog) – Why Was Fed Statement Late? 20th Century Technology As any veteran market participant knows, the Federal Open Market Committee meeting outcome is announced only roughly around the scheduled time. Why? Unlike almost all the other stuff that comes out of the government’s economic divisions, the Federal Reserve statement is… Continue reading Blame A Copy Machine Malfunction For The Late FOMC Announcement Yesterday
Business Insider – Merkel Consults With The Pope On Financial Crisis German Chancellor Angela Merkel said she and Pope Benedict XVI spoke about financial markets after meeting with him today as he began a four-day visit to Germany. No word on exactly what he said…His visit reportedly delayed a crucial vote on the European Financial… Continue reading Only Divine Intervention Can Save Us Now
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Charts of the Week Topics Covered This Week Include: What Deleveraging? The Myth Of Cash On The Sidelines Total “Private” & “Government” Credit Market Debt Household Net Worth & The “New” American Dream European Funding No Austerity In Greece, Now or Ever Italy Is Downgraded Credit Market Update A Look At ETF Assets Core Inflation… Continue reading Untitled