The Wall Street Journal – John B. Taylor: The End of the Growth Consensus America added 44 million jobs in the 1980s and ’90s, when both parties showed they had learned from past mistakes. The lessons have been forgotten If these government interventions are the economic problem, then the solution is to unwind them. Some… Continue reading The Jobless Recovery
Reuters – Exclusive: Fed planning for potential default The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday. Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central… Continue reading Here Comes QE3?
The Wall Street Journal – Greek Deal Likely to Involve Bond Exchange Euro-zone leaders are debating a new bailout package for Greece that will likely include new rescue loans of roughly €70 billion ($99.51 billion) and a program to exchange much of Greece’s outstanding bond debt for new, 30-year bonds, people familiar with the talks… Continue reading Greece’s Latest Bailout
Federal Reserve Bank of NY – The SOMA Portfolio at $2.654 Trillion Given the considerable amount of uncertainty about the course of the economy, market participants have observed that the next policy action by the FOMC could be in either direction. If economic developments lead the FOMC to seek additional policy accommodation, it has several… Continue reading The Exit Strategy and QE3 According To Brian Sack
The New York Times – Wall St. Makes Fallback Plans for Debt Crisis Lawmakers in Washington are racing to reach a deal to save the country from defaulting on its debt, but on Wall Street, financial players are devising doomsday plans in case the clock runs out. These companies are taking steps to reduce the… Continue reading Preparing For Default
The Financial Times – Bill Gross: Developed world cannot thrive at ‘stall speed’ Debt is the disease – growth is the cure, but as the latter falters, economies and their associated financial markets hang in the balance. Academics Kenneth Rogoff and Carmen Reinhart have outlined what happens when countries assume liabilities that future growth cannot… Continue reading Bill Gross Talks About ‘Stall Speed’
In the absence of any cartoons today, we offer the following email which was forwarded to us this morning. Expected Timeline of European Bailout Talks Today: 12:00 Heads of state arrive 12:45 Working lunch 04:00 Buckets of sand arrive 04:30 Heads are dug well into the buckets 05:00 The heads experience an overwhelming state of… Continue reading Cartoons
Conference Call Presentation/Charts of the Week audio Topics Covered This Week Include: Summary/Conclusion Why The Lack Of A Debt Ceiling Bill Could Be Bullish For Treasuries Government Spending As A Percentage of GDP Washington Does Not Get It Was Tuesday’s Record One-Day Advance Meaningful? The Economy Points To More Subpar Growth The Economy Is No… Continue reading Untitled
The Hill – Boehner’s office says Gang of Six proposal ‘appears to fall short’ Speaker John Boehner’s (R-Ohio) office said Tuesday that a $3.7 trillion deficit-reduction plan from the Senate’s Gang of Six appears to fall short of goals set by House Republicans. “This plan shares many similarities with the framework the Speaker discussed with… Continue reading Before We Get Too Worked Up About The “Gang Of Six” …
Reuters.com – US backup debt plan doesn’t support rating – Moody’s A U.S. government backup debt plan to raise the country’s debt ceiling and avoid imminent default could still lead to a downgrade of U.S. ratings in the next year or so, Moody’s said on Tuesday. Senator Mitch McConnell’s “Plan B,” increasingly seen as a… Continue reading More On The U.S. Debt Ceiling …
The Wall Street Journal – TIMOTHY GEITHNER: A Dodd-Frank Retreat Deserves a Veto Only six congressional Republicans crossed the aisle to support reform one year ago. The GOP is still working to thwart change By almost any measure, the U.S. financial system is in much stronger shape, not just relative to the depth of the… Continue reading Geithner Speaks
<Click on chart for larger image> The Telegraph (UK) – Ambrose Evans-Pritchard: Portugal’s Prime Minister Pedro Passos Coelho discovers ‘colossal’ budget hole Portugal’s new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a “colossal” €2bn (£1.7bn) hole in the public accounts left by the outgoing… Continue reading Portugal Admits It Lied About Its Budget Deficit