The Economist – The federal debt: Countdown The row over the debt ceiling is going down to the wire THE stand-off over America’s debt ceiling has entered strange territory: pretty much everyone agrees the limit will be raised, but it is becoming ever harder to see just how. The Treasury reckons it will run out… Continue reading Debt Ceiling Countdown
Reuters – US Treasury Secretly Weighs Options to Avert Default A small team of U.S. Treasury officials is discussing options to stave off default if Congress fails to raise the debt limit by the Aug. 2 deadline, sources familiar with the matter said on Wednesday. Senior officials, including Treasury Secretary Timothy Geithner, have repeatedly said… Continue reading What Happens On August 2?
Usually mutual fund flows follow performance. However this was not the case in the last decade. As the first chart shows, net new cash flows into domestic equity mutual funds began diminishing as early as 2004. By the all-time high in 2007, the public was a net seller and has not returned since. Many believe… Continue reading Don’t Expect Equity Mutual Fund Inflows Anytime Soon
Companies Forcing Analysts’ Estimates Downwards? The Big Picture (blog) – Reporting Season Farce Albert Edwards is the uber-Bear who sits on the Global Strategy Team at Société Générale. Edwards notes: “It’s that surreal time of the quarter, just ahead of the reporting season, when US companies cajole compliant analysts into reducing their profit forecasts so… Continue reading Earnings Estimates
Der Spiegel (Gernamy) – Europe Seeks to Free Itself from Rating Agencies’ Grip The “Big Three” credit rating agencies can determine the fate of entire countries, by deciding whether they are creditworthy or not. Now Portugal is under pressure after Moody’s downgraded its debt to junk status. European politicians want to create an alternative, even… Continue reading Proof Nothing Was Learned From The Credit Crisis
<Click on chart for larger image> Bloomberg.com – Italian Yields Reach 9-Year High as European Crisis Spreads; Bunds Gain Italian bonds slid for the fifth straight day, driving yields to a nine-year high, as contagion from Greece’s fiscal crisis intensified in the region’s biggest government-debt market. Spanish, Portuguese, Irish and Greek bonds also fell. The… Continue reading Italy Blows Up?
CNBC – ‘Perfect Storm’ Coming for Global Economy in 2013: Roubini Weakening economic conditions will come together in 2013 and create a “perfect storm” of global weakness, economist Nouriel Roubini told CNBC. Known for his generally dour outlook that helped him see the financial crisis before it hit in 2008, Roubini said the US, European… Continue reading Scary Talk
The Economist – Debt reduction: Handle with care “Deleveraging” will dominate the rich world’s economies for years. Done badly, it could wreck them DEBT reduction, or deleveraging as it is known in the inelegant argot of economists, is a painful process. Growth suffers as consumers and firms, let alone governments, try to reduce their debts.… Continue reading Deleveraging
Slate.com – QE2 Winners and Losers How the Fed’s stimulus maneuver helped the rich and screwed the poor Since the onset of the 2008 financial crisis the Federal Reserve has twice attempted to stimulate economic growth through a somewhat unorthodox maneuver called quantitative easing, wherein the Fed buys back Treasury bonds from big banks. When… Continue reading Looking Back At QE2
Washington Wire (WSJ Blog) – Chained CPI: A Link To a Budget Deal? The main Consumer Price Index is a measure of the average price change of a fixed basket of goods and services purchased by the average urban household; that doesn’t reflect the reality that when, for instance, the price of pork goes up… Continue reading Chained Inflation
The Economist – Global house prices: Rooms with a view Asia’s frothiest housing markets are calming down. Is America’s bottoming? THE bubble that caused a global recession has been a long time deflating. The American housing market began to decline half a decade ago and hasn’t stopped yet. Prices dropped by 5.1% from the year… Continue reading Housing
The Financial Times – High-frequency trading adding risk, Haldane says High-frequency trading is creating systemic risk and markets may need a “redesign”, a top official at the Bank of England said in prepared remarks. In a policy speech to be given in Beijing, Andrew Haldane, executive director for financial stability at the Bank of England,… Continue reading HFT