Slate.com – Final Arguments Was TARP a success or failure? It depends on who you think it was supposed to help Depending on who’s assessing it, it is either one of the most successful government responses to an economic crisis or one of the least. “It isn’t often that the government launches a major program… Continue reading TARP
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The Wall Street Journal – Fed’s Low Interest Rates Crack Retirees’ Nest Eggs Forrest Yeager, a 91-year-old resident of this seaside community, had been counting on his retirement savings to last until he died. The odds are moving against him. With short-term bank CDs paying less than 1%, the World War II veteran expects his… Continue reading Low Interest Rates
The Financial Times – Lex: QE2 won. Now what? Don’t look now, but QE2 worked. The aggressive second round of quantitative easing unleashed last autumn by the Federal Reserve clearly had the advertised effects. Last week’s US payroll data underline this. Last August, when Ben Bernanke of the Fed signalled more bond purchases in a… Continue reading QE2
The Financial Times – Lex: Commodities: never mind the price The rule that prices are set where marginal demand meets marginal supply has not been suspended for commodities. But prices have been distorted by cheap funding, which allows many buyers to borrow, bid up the price to high levels – and not use any less.… Continue reading Commodities
The Wall Street Journal – Treasury Market Braces for Higher Interest Rates While Federal Reserve officials openly feud over the right time to begin tightening monetary policy, Treasury investors are starting to lean with the hawks. U.S. Treasurys last week endured their longest losing streak in more than two decades—nine consecutive days—and ended the worst… Continue reading Bearish On Interest Rates
The Wall Street Journal – No Relief Likely for Muni Bonds With last week concluding the slowest quarter for municipal-bond issuance in 11 years, attention is shifting to when borrowers will come back. If they ramp up soon, it won’t be pretty, say bankers and portfolio managers, who say demand remains weak. “Even if [supply]… Continue reading Muni Bonds
<Click on chart for larger image> Bloomberg.com – William Pesek: IPad-Eating Bankers Face Surge in Inflation The economics of production is unpredictable. Just ask Steve Jobs. Stock analysts are buzzing about how Japan’s unfolding crisis will affect production of iPhones and iPads. The country is a vital hub for everything from flash memory chips to… Continue reading Inflation
The Wall Street Journal – GRETCHEN MORGENSON: The Bank Run We Knew So Little About IN August 2007, as world financial markets were seizing up, domestic and foreign banks began lining up for cash from the Federal Reserve Bank of New York. That Aug. 20, Commerzbank of Germany borrowed $350 million at the Fed’s discount… Continue reading Discount Window Lending
The Telegraph (UK) – Liam Halligan The US recovery is little more than an economic ‘sugar-rush’ Guess what! America is on the mend. That’s right, the world’s biggest economy is now forging ahead, escaping its sub-prime malaise. Strengthening jobs data last week show the US has reached a “turning point”. On Wall Street, the Dow… Continue reading The Economy: Sugar-High?
The Wall Street Journal – Jon Hilsenrath: Battle Lines Drawn on Fed’s Next Moves As the U.S. economy slowly improves, battle lines are being drawn at the Federal Reserve for the coming debate about when and how to tighten the central bank’s easy monetary policy. A slew of regional Federal Reserve bank presidents have taken… Continue reading Bill Dudley Speaks
The Financial Times – Phil Davis: Hedge fund route to fixed income Bonds are staple pension fund assets and their proportion within portfolios is rising as pension schemes continue to de-risk under orders from plan sponsors. However, fixed income does not have to be a simple buy-and-hold strategy. “Pension funds tend to hold bonds to… Continue reading Hedge Funds