The Economist – In defence of the Shiller p/e But even though the Shiller p/e accurately predicted that the market was overdue for a fall, there are still many critics who today refuse to accept its message. That is because, as you can see, the ratio is close to one of its 20th century peaks… Continue reading Valuing The Stock Market
The Economist – Buttonwood: The missing link Economic growth helps investors only if they are clairvoyant Goldman argues that investors can take advantage of upgrades in economic-growth forecasts, which signal better prospective returns especially in the developing world. But its evidence for this claim is quite limited (just ten years of data for Brazil and… Continue reading GDP And Stock Prices
The Wall Street Journal – Goldman Braces for Federal Subpoenas Bank Expects a Demand for Mortgage Documents; Move Would Follow Senate Subcommittee’s Report Goldman Sachs Group Inc. executives expect to receive subpoenas soon from U.S. prosecutors seeking more information about the securities firm’s mortgage-related business, according to people familiar with the situation. Officials at the… Continue reading Is Goldman In More Trouble?
The Wall Street Journal – Opinion: The LinkedIn Mania Ben Bernanke and the IPO market In that sense, LinkedIn’s founders can probably thank Ben Bernanke. The Federal Reserve Chairman has kept interest rates at near-zero for close to 30 months, surplus dollars are sloshing around the world, and investors are desperate for higher returns. They… Continue reading Bernanke’s Effect On LinkedIn
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Comment Jim Bianco was on CNBC yesterday afternoon discussing the FOMC minutes. To view the interview, click on the picture above. To view any of our recent interviews click here. The Wall Street Journal – Fed Officials See Gradual Exit Plan Minutes of the Fed’s April 26-27 meeting, released Wednesday with the normal three-week lag,… Continue reading The FOMC Minutes
Cnbc.com – Despite End of Easing, Fed Won’t Be Going Away Soon The second leg of the central bank’s official easing policy—known as quantitative easing, or in this case, QE2—comes to a close at the end of June with the conclusion of $600 billion in Treasury purchases. But the goal to maintain economic stability will… Continue reading Will/Can QE3 Happen?
<Click on chart for larger image> The Financial Times – Lex: Inflation: not spiralling out of control There are good reasons to fear inflation. The exceptionally low interest rates in place since the credit crisis should be directly inflationary. So should the fast rise in commodity prices. And by the beginning of this month, markets… Continue reading Inflation Expectations
<Click on chart for larger image> The Wall Street Journal – Funds Extend Streak of Inflows Long-term mutual funds had estimated inflows of $3.91 billion in the latest week on strong inflows into bond funds, while investors added money to municipal funds for the first time since November, according to the Investment Company Institute. It… Continue reading Mutual Fund Flows
The Financial Times – Lex: What drives commodity prices? Commodity prices have fallen – the CRB-Reuters index has dropped 7 per cent (in euro terms) since a February peak. Commodity prices have also risen – the CRB is still up 80 per cent (in euros) since the 2008 low. There should be an explanation for… Continue reading Explaining Swings In Commodity Prices
The Wall Street Journal – Alan Blinder: The Debt Ceiling Fiasco The debt ceiling “crisis” started on Monday when the U.S. government reached the legal limit on how much it is allowed to borrow—a limit that, curiously, counts even debts that one branch of government owes to another. But don’t worry—yet. Treasury Secretary Tim Geithner… Continue reading The Debt Ceiling
Bloomberg.com – Jonathan Weil: Government Prays a Bigger Sucker Is Out There Look through the footnotes in American International Group Inc. (AIG)’s latest annual report, and you will see a long section analyzing the company’s ability to use past losses to offset future income-tax obligations. The gist: AIG’s executives have gazed into their crystal ball… Continue reading AIG