The Economist – Buttonwood: Liquidity and lottery tickets Why investors overpay for certain assets THOSE who occasionally bet on horse races like the Kentucky Derby or the Grand National have a tendency to favour 100-1 outsiders. Their motivation may be the desire for a big win to justify the act of gambling at all. The… Continue reading Liquidity And Lottery Tickets
Comment In January and February, we highlighted the performance of the S&P 500 on the first trading day of each month. Without being able to surmise a logical reason for this monthly trend, we remain a bit skeptical of its sustainability. While we cannot argue against the returns this strategy has yielded since the beginning… Continue reading Don’t Forget – Tomorrow Is The First Trading Day Of The Month
The Wall Street Journal – Alan Blinder: Handicapping the Economic Recovery If you’re searching for a metaphor for the U.S. economy right now, think of an athlete who is recovering from serious injuries and must navigate a difficult obstacle course. She’s getting into better shape but there are hazards along the way that might keep… Continue reading Stocks Continue To Climb A Wall Of Worry
The Financial Times – Lex: The dollar: QE3 may not sail The Federal Reserve’s governors are trying to tell investors something. But nobody is listening – except perhaps the foreign exchange market…the chief force driving the dollar down was the Fed’s QE2 bond purchase plan. Unique among central banks, it retains QE3 as an option.… Continue reading Is QE3 Really A Possibility?
Real Time Economics (WSJ Blog) – Fed to Name Banks That Sought Funding During Crisis The Fed will on Thursday release about 25,000 emergency-lending documents spanning a period from Aug. 7, 2007 until March 1, 2010. The data includes details for the peak month of October 2008, a month after Lehman Brothers filed for bankruptcy… Continue reading The Federal Reserve Will Hand Over Its Discount Window Data Today
<Click on chart for larger image> The Financial Times – Portugal will follow Greece and Ireland to failure Oscar Wilde famously wrote that to lose one parent may be regarded as a misfortune; but to lose both looks like carelessness. One has to wonder what he might have said about the International Monetary Fund and… Continue reading The PIIGS
<Click on chart for larger image> Bloomberg.com – Bank of Japan Said to Consider Supporting Loans for Companies After Quake The Bank of Japan is considering offering temporary loans to banks to encourage lending to companies with cash-flow shortages in the wake of the record March 11 earthquake, three people familiar with the matter said.… Continue reading More Stimulus From The Bank Of Japan?
Bloomberg.com – Alan Krueger: Why Unemployment Rose So Much, Dropped So Fast Few things are more puzzling and disconcerting for an economist, and much of the American public, right now than the unemployment rate. From late 2008 to the end of 2009, the U.S. unemployment rate jumped by 3.1 percentage points. What was so shocking… Continue reading Unemployment
Bloomberg.com – Ireland Prepares to Rescue Banks With Stress Tests Aimed at Ending Crisis Ireland’s top finance officials will today seek to show investors, taxpayers and the rest of the euro region that the banking crisis that crippled what was once Europe’s most dynamic economy might be nearing an end. Central Bank Governor Patrick Honohan… Continue reading Irish Stress Tests
Pimco.com – Skunked Medicare, Medicaid and Social Security now account for 44% of total federal spending and are steadily rising. Previous Congresses (and Administrations) have relied on the assumption that we can grow our way out of this onerous debt burden. Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not… Continue reading Bill Gross Speaks
Bloomberg.com – New York Fed Declines AIG’s Offer for Maiden Lane II Mortgage-Bond Assets American International Group Inc. (AIG), the bailed-out insurer, was rebuffed by the Federal Reserve Bank of New York in its bid to repurchase a portfolio of mortgage- backed securities for $15.7 billion. The New York Fed will instead sell the assets… Continue reading NY Federal Reserve Will Sell Maiden Lane II Assets In Small Blocks