<Click on chart for larger image> Bloomberg.com – Greenspan Says Greece Default ‘Almost Certain,’ May Trigger U.S. Recession Alan Greenspan, former Federal Reserve chairman, said a default by Greece is “almost certain” and could help drive the U.S. economy into recession. “The problem you have is that it’s extremely unlikely the political system will work”… Continue reading Greek Default And The Markets
<Click on chart for larger image> <Click on chart for larger image> The Financial Times – Corporate bond risk premiums soar The spread, or risk premium, on a Barclays Capital index of investment grade dollar-denominated bonds was at 153 basis points over benchmark risk-free rates on Thursday. In the first week of this year, the… Continue reading A Look At The Credit Markets
<Click on chart for larger image> The Financial Times – Ireland to seek ECB backing for bond haircuts Although Ireland’s banks have imposed heavy losses on junior bondholders as part of efforts to bolster bank capital, senior bondholders have been protected by the ECB, which fears any forced losses could affect funding for banks across… Continue reading Ireland
Bloomberg.com – Caroline Baum: Soft Patch 2, Not QE2, Is Main Influence on Rates When it began, some thought it might not run its course. Now that it’s ending, there are those who think another installment is needed. The “it,” of course, is the Federal Reserve’s second round of large-scale asset purchases, better known as… Continue reading The Economy’s Soft Patch And Interest Rates
<Click on chart for larger image> Bloomberg.com – U.S. Confidence Out of Sync With Stock Gains Main Street is out of step with Wall Street. The Bloomberg Consumer Comfort Index has stalled near its recession average as the Dow Jones Industrial Average has risen 83 percent from a 12-year low in March 2009. A tight… Continue reading Consumer Confidence Is Still Very Low
Portfolio Advisor (Blog) – To QE3 or not to QE3? The argument in favour of a further round of QE is that economic activity is weaker than it should be at this stage in the cycle, that lower Treasury bond yields are necessary to reduce the cost of credit, and that a new programme of… Continue reading QE3
Project Syndicate (Blog) – Mohamed El-Erian: America’s Dangerous Debt Ceiling Debate It has been raised more than 70 times in the last 50 years, mostly without commotion. It must be raised again this summer if the United States government is to continue paying its bills on time. But now America’s debt ceiling has become the… Continue reading The Debt Ceiling
CNBC.com – Black Swan: A 40 Percent Correction? The S&P could be bound for a correction of 40 percent or more in the next three years, according to a research paper issued by Universa Investments, otherwise known as the “Black Swan” fund for its affiliation with author Nassim Taleb. Universa, which helps its clients brace… Continue reading Are We Looking At A 40 % Stock Market Correction And $12,000 Gold?
The New York Times – Wall Street Braces for New Layoffs as Profits Wane Wall Street plans to get smaller this summer. Faced with weak markets and uncertainty over regulations, many of the biggest firms are preparing for deep cuts in jobs and other costs. The cutback plans are emerging even as Wall Street firms… Continue reading Layoffs On Wall Street
None Today
<Click on chart for larger image> The Wall Street Journal – Greek Lawmakers Quit as Crisis Gathers Pace Prime Minister George Papandreou will announce later Thursday a new cabinet to shore up fast-eroding support, as more members of his Socialist Party come out in opposition to government policies. On Thursday, two Socialist party members withdrew… Continue reading All Eyes On Greece
<Click on chart for larger image> Bloomberg.com – No Panic in Options After VIX Takes Six Weeks to Exceed Average It took six weeks of equity losses, a series of lower-than-estimated economic reports and political turmoil in Greece to finally drive the options gauge known as the VIX above its long-term average. The Chicago Board… Continue reading There Is Little Panic In The Markets