The Washington Post – Neil Irwin: Ben Bernanke unlikely to announce big new plans at Jackson Hole This time a year ago, Federal Reserve Chairman Ben S. Bernanke headed to an annual gathering of central bankers in Jackson Hole, Wyo., amid a faltering U.S. economy, a perilous global situation, and rising calls on Wall Street… Continue reading Waiting On Bernanke
<Click on chart for larger image> The New York Times – Oil Reserves Sidestep U.S. Vessels In its hurry to transport millions of barrels of oil from federal stockpiles to stabilize world oil prices earlier this summer, the Obama administration has repeatedly bypassed federal law by allowing nearly all the oil to move on foreign-owned… Continue reading Updating The Strategic Petroleum Reserve’s (SPR) Drawdown
<Click on chart for larger image> The Financial Times – Richard Milne: Fanciful and dangerous risks of a eurobond panacea Belief that eurobonds can be born at the peak of a crisis is hazardous On the surface, the idea makes a lot of sense. It would provide markets with a highly liquid, well-rated alternative to US… Continue reading Europe
The Associated Press – Austria insists on bailout collateral from Greeks Austria insisted Wednesday it will seek collateral from Greece for participating in its bailout as long as Finland has the same deal, adding uncertainty to the fate of Europe’s plan to rescue Athens. The Finns last week struck a deal to secure cash guarantees… Continue reading Is The Greek Bailout At Risk?
The Wall Street Journal – Moody’s Cuts Japan’s Credit Rating Japan became the latest country hit by the current round of sovereign-debt downgrades, with the government’s credit rating lowered Wednesday by Moody’s Investors Service, The move puts fresh pressure on the country’s political leaders to repair its finances, the worst in the industrialized world. Moody’s… Continue reading Japan’s Debt Rating Cut Again
Bloomberg.com – El-Erian Joins With Feldstein-Fels on Prospect of New Core Euro The result would be what El-Erian, Pimco’s Newport Beach, California-based chief executive officer, calls a “smaller, much better integrated, fiscally strong euro zone.” While leaders such as German Chancellor Angela Merkel consistently rule out that option, El-Erian told “Bloomberg Surveillance” with Tom Keene… Continue reading The Future of The Euro
Comment Last week in a post titled Credit Leads Stocks, we said: Namely, whenever the equity and credit markets diverge, the equity market more often corrects to the credit markets. In fact, as we noted in 2008, the stock market has even been doing a poor job of discounting recessions this past decade. The charts… Continue reading Credit Continues To Underperform Equities
The Wall Street Journal – Markets Remain Unkind to BofA Bank of America Corp. suffered through another tumultuous day in the market, with a measure of anxiety over its credit-worthiness hitting an all-time high even as analysts said the bank is much sounder than it was before the 2008 financial crisis. The cost of insuring… Continue reading Bank of America On The Brink
<Click on chart for larger image> <Click on chart for larger image> Comment The next chart shows the Intrade market’s odds on Obama’s 2012 re-election. These markets are updated in real-time in the right-hand column (Obama is the first market in the second panel). At 50/51 this is literally a coin flip, which is not… Continue reading Obama’s Approval Rating Falls To A New Low
None Today
With U.S. Treasury issuance skyrocketing over the past couple years, yields at new all-time lows and talk of a bond bubble rife, we are often asked, “Who is buying all this Treasury debt?” Below are a series of charts that attempt to answer this question. Foreign Buyers When asked who is buying Treasury debt, people… Continue reading Who Is Buying U.S. Treasuries?
Bloomberg.com – Euro-Region Slowdown Caused Overreaction, Estonia’s Kaasik Says Investors “overreacted” to signs the euro region’s economic recovery is losing momentum as data have yet to confirm the situation is worsening, Estonian central bank Deputy Governor Ulo Kaasik said. Gross domestic product in the 17-nation euro area rose 0.2 percent in the second quarter, the… Continue reading The European Economy Continues To Disappoint