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Market Talk
Why The Federal Reserve May Have A Hard Time Raising Rates
April 15, 2011
Comment Prior to September 2008, total bank reserves (red line) held at the Federal Reserve were about $45 billion. Required reserves (blue) were about $44 billion. Excess reserves, the difference between total and required, averaged about $1 billion. <Click on chart for larger image> Prior to the financial crisis, banks that needed reserves would borrow… Continue reading Why The Federal Reserve May Have A Hard Time Raising Rates
Newsclips
Can We Have A Bond Debacle When Everyone Is Forecasting It?
April 15, 2011
Comment This is an update from last month: The table below shows the results of Bloomberg’s survey of economists. It details economists’ expectations for 10-year Treasury yields over the next six months. For those familiar with this survey, we use the quarter-end results closest to six months into the future. See the bottom of the… Continue reading Can We Have A Bond Debacle When Everyone Is Forecasting It?
Newsclips
Chinese Reserves
April 15, 2011
<Click on chart for larger image> The Economist – China’s foreign reserves: Who wants to be a triple trillionaire? Window-shopping with China’s central bank BY THE end of last year, China’s foreign-exchange reserves amounted to $2.85 trillion. Although China ran a rare trade deficit in the first quarter of this year on April 14th the… Continue reading Chinese Reserves
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The Carry Trade
April 15, 2011
The Economist – Currencies: Carry on Rich countries’ central banks are on divergent paths. So are their currencies THE Japanese yen has seen dramatic gyrations in its value since the earthquake and tsunami of March 11th. Immediate bets by speculators—or “sneaky thieves”, in the words of one Japanese official—that companies would have to repatriate funds… Continue reading The Carry Trade
Newsclips
Chinese Inflation
April 15, 2011
<Click on chart for larger image> The Financial Times – China acts as inflation rises to 5.4% China has imposed strict price controls on basic consumer items and is expected to allow faster appreciation of its currency in the coming months after annual inflation in the country reached its highest level in nearly three years… Continue reading Chinese Inflation
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Europe’s Debt Problems
April 15, 2011
<Click on chart for larger image> The Wall Street Journal – Moody’s Downgrades Ireland Moody’s Investors Service Inc. downgraded Ireland’s government debt by two notches Friday, taking the country to the brink of junk status, and kept its outlook negative. The agency, cutting Ireland’s bond ratings to Baa3, one notch above junk, from Baa1, said… Continue reading Europe’s Debt Problems
Newsclips
BP Spill One Year Later
April 15, 2011
<Click on chart for larger image> Reuters – A year on, Gulf still grapples with BP oil spill The disaster that captivated the world’s attention for 153 days struck at 9:53 p.m. CDT on April 20 (0253 GMT on April 21), when a surge of methane gas known to rig hands as a “kick” sparked… Continue reading BP Spill One Year Later
Newsclips
Who Trades Stocks?
April 15, 2011
The New York Post – John Crudele: Bastardized market has lost all legitimacy The stock market has officially been bastardized. Think about it. The market is no longer about which company will work harder, earn more in profits in the future and justify an investor’s confidence with a higher stock price. Stocks are now the… Continue reading Who Trades Stocks?
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Bubbles
April 15, 2011
Bloomberg BusinessWeek – The Granddaddy of All Bubbles? World markets are frothing like shaken Champagne, and doomsayers argue that today’s bubbles need to be deflated now before they get dangerously large It’s as if 2008 never happened. Once again the world’s investors are pumping up bubbles that will probably explode in their faces. After the… Continue reading Bubbles
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Saving Germany’s Banks
April 15, 2011
The Economist – Europe’s banks: Follow the money Is Germany bailing out euro-area countries to save its own banks? IF THE euro zone were an old-fashioned family, Germany would be the stern father telling his wayward children to go to bed early and not to spend all their pocket money at once. It has resisted… Continue reading Saving Germany’s Banks
Newsclips
A Recovering Economy Saves Lives
April 15, 2011
Centers for Disease Control and Prevention – CDC Study Finds Suicide Rates Rise and Fall with Economy The overall suicide rate rises and falls in connection with the economy, according to a Centers for Disease Control and Prevention study released online today by the American Journal of Public Health. The study, “Impact of Business Cycles… Continue reading A Recovering Economy Saves Lives