The Wall Street Journal – Post-Stimulus: Who Pays for China’s Bad Loans? There is no such thing as a free stimulus. At first sight, China’s response to the financial crisis looked cheap. A fiscal deficit totaling 3.1% of gross domestic product in 2009 and 2.6% in 2010 compares with 12.7% and 10.6% in the U.S.… Continue reading Comparing Debt Levels
The Wall Street Journal – Bipartisan Debt Talks Grow More Contentious The bipartisan deficit-reduction talks led by Vice President Joe Biden grew more contentious Wednesday as Democrats and Republicans became increasingly entrenched on key issues, people familiar with the matter said. Republicans are staunchly opposed to raising taxes, something Democrats believe must be part of… Continue reading The Debt Ceiling
The Financial Times – Final arbiter in Greek saga is untested, private body Investors and banks that purchased Greek sovereign credit default swaps (CDS) to protect themselves against the risk of default may find that they have been misinformed. The “hedges” may not provide the protection sought. While net outstandings of Greek sovereign CDS are… Continue reading Defining A Credit Event
The Financial Times – Traders disagree on outlook for crude spreads Will the benchmark West Texas Intermediate trade at a hefty discount to Brent for years to come? The oil market is split about the answer and some serious money is on the table with savvy traders taking opposite views about the direction of the… Continue reading Divergent Views On Divergent Crude Oil Prices
The Financial Times – Fed inflation target redux The one question to earn a wry smile from Fed chairman Ben Bernanke today was on whether the Fed will adopt an explicit inflation target. His answer was one of his most informative. In essence, he said that: (a) he wants one; (b) it’s not imminent; (c)… Continue reading Inflation Targets
The Wall Street Journal – GM Stock Impedes U.S. Exit Two years after General Motors Co. and the Obama administration worked together to save the auto maker, the two are now at odds over how to get the government out of the company. The Detroit auto maker wants a share sale as soon as possible,… Continue reading GM
Bloomberg.com – Jonathan Weil: JPMorgan Gets a Break Where Goldman Got Nailed Once again the Securities and Exchange Commission has filed a complaint against a too-big-to- fail bank that hinges on the meaning of one word: “selected.” Last year, the bank was Goldman Sachs, which the SEC accused of intentional fraud. This week, the defendant… Continue reading Why Does JP Morgan Get A Pass?
Wordle for yesterday’s FOMC statement <Click on graphic for larger image> The Big Picture
Charts of the Week Topics Covered This Week Include: The State Of The Economy The Federal Reserve’s Balance Sheet And Stocks Consumer & Investor Confidence There Is Little Panic In The Markets Volume In The Stock Market Credit Market Update Corporate Bond Issuance, The Only Credit Channel Working? Corporate Bond Issuance, The Only Credit Channel… Continue reading Untitled
<Click on chart for larger image> The Wall Street Journal – Jon Hilsenrath: QE 2 Proves No Silver Bullet Federal Reserve officials have been warning for months that the controversial $600 billion bond-buying program they initiated last year wouldn’t be a panacea for an ailing U.S. economy. That’s one forecast they seem to have gotten… Continue reading What Has QE2 Done For The Economy? What Will Happen When It Ends?
Bloomberg.com – Fed Frets Over U.S. Fiscal Recklessness “The Fed is not inclined to do more easing in the form of asset purchases, and it would create something of a dilemma for them if there’s such a dramatic near-term fiscal tightening put in place that it prevented the Fed from achieving its mandate” for full… Continue reading The Federal Reserve’s Rate Decision and Bernanke’s Second Press Conference Is Today
<Click on chart for larger image> The Guardian (UK) – Greece: markets talk of Lehmans moment as fears of a new crisis grow City analysts were showing off the benefits of a classical education as they waited on Tuesday for the Greek parliament to decide whether it would back Prime Minister George Papandreou and accept… Continue reading Greece