The chart below shows the percentage of S&P 500 companies that have beat quarterly earnings expectations. Every quarter since 1998, the majority of companies have beat expectations. We have called quarterly earnings “gamed and useless statistics” as the only way companies can consistently beat expectations 75% of the time is if they are manipulating the… Continue reading Do Earnings Continue To Disappoint?
The Wall Street Journal – Boom’s Home-Ownership Gains Lost The meltdown of the U.S. mortgage market and rising foreclosures have wiped out more homeowners than were created in the 2000-07 housing boom, some industry watchers say, the latest indication of the severity of the housing bust. In the fourth quarter of 2010, 66.5% of Americans… Continue reading Home-Ownership Rate
The Wall Street Journal – Rising Rates Fuel Boomlet in Buyouts A flood of cash by investors seeking to profit from rising interest rates is having an unintended effect in the deal world, where this money is being recycled into corporate buyouts. Investors have been selling bonds, which typically lose money when interest rates increase,… Continue reading Are Buyouts Returning?
The Wall Street Journal – Financial Advisers on Munis: Don’t Panic Like many financial advisers, Stan Richelson is fielding calls these days from clients wanting reassurance about their holdings in the municipal-bond market. His response: “Stop worrying; get over it.” He then explains to them how and why, as he puts it, “the world is… Continue reading Munis
The Wall Street Journal – The Dow’s Rockin’ New Year Blue-chip stocks kicked off the new year with their strongest January in 14 years, as a boom in corporate revenues and robust economic readings gave investors confidence that the U.S. economy has turned a corner. Helped by the Federal Reserve’s open monetary spigot, stocks continued… Continue reading The January Indicator Is Useless
The Wall Street Journal – Bond Buyer of Last Resort The latest word out of a mountain hamlet in Switzerland suggests that Europe may finally be coming to grips with the need to restructure Greece’s debt. The bad news is that the mooted restructuring seems likely to leave the European Central Bank with the tab.… Continue reading European Debt Woes
The Wall Street Journal – Peter J. Wallison: What’s So Special About the 30-Year Mortgage? One remarkable feature of the current debate in Washington about the future of Fannie Mae and Freddie Mac is the prominence given to one kind of mortgage—the 30-year, fixed-rate loan. The proponents of a continuing role for government in housing… Continue reading Why Do Fannie & Freddie Still Exist?
<Click on chart for larger image> Zero Hedge (Blog) – Treasury Sees $194 Billion Drop In Borrowing Needs Due To SFP Program Roll Off, Over Half A Trillion In Financing Needs For Jan-Mar Quarter Today, the Treasury issued its revised merkatble borrowing estimate. And while the last time the Treasury issued this forecast, it had… Continue reading Treasury Borrowings
The Financial Times – The era of cheap capital draws to a close The global economy faces a dilemma. Attempts to boost growth have lowered interest rates in advanced economies. The resulting hot money has moved exchange rates out of line with fundamentals, creating inflation and asset appreciation in the developing world. Accumulation of foreign… Continue reading Cheap Capital
None Today
Wall Street is quick to blame Bernanke/the Federal Reserve for just about everything wrong in the financial world. In fact, many conspiracy theorists present the Federal Reserve as an unnecessary entity that needs to be done away with. While conspiracy theories usually have little proof to support them, there is evidence that high food prices… Continue reading Is QE2 Contributing To Unrest In Egypt?
The Financial Times – Bernanke’s QE2 efforts receiving mixed signals The Fed has no qualms. “My short answer is yes,” Janet Yellen, Fed vice-chair, said earlier this month. The place to start an assessment is with government bonds. Since the $600bn quantitative easing, QE2, was announced in November, bonds have done the opposite of what… Continue reading Grading QE2