The Wall Street Journal – Dollar Strength Crimping Stock Gains Wondering how the stock market is performing on a given day? Check the greenback. The negative correlation between stocks and the U.S. dollar has been increasingly apparent throughout the last few months. When stocks have risen, the dollar has dropped as investors have shown an… Continue reading Are Stocks Moving Independently Of Other Markets?
The Financial Times – Dublin is paying the price of three follies Ireland is today facing a political as well as an economic crisis, with the government under growing pressure to resign. The inflaming of passions is all too understandable. The sorry saga, which has seen a reluctant government accept a European rescue package with… Continue reading Ireland
The Financial Times – Time to revamp the Fed’s flawed mandate The big deal is that the dual mandate itself is deeply flawed. For starters, it is a relic from a distant past. In 1978, after enactment of the Humphrey-Hawkins Act, the central bank was required to add price stability to its original charge of… Continue reading Questioning The Federal Reserve’s Dual Mandate
<Click on chart for larger image> Euro Intelligence (Blog) – The road to self-destruction of the eurozone At recent European Council meeting, the member countries of the eurozone have agreed to introduce a sovereign debt default mechanism. They even seem to be willing to codify this into a new treaty. This is a bad decision… Continue reading Can The Euro Survive?
The Wall Street Journal – Hedge Funds Raided in Probe A three-year insider-trading investigation shifted into high gear Monday as government agents raided the offices of three large hedge funds, sending shock waves through the financial world. In coordinated raids in New York, Connecticut and Massachusetts, Federal Bureau of Investigation agents seized documents at the… Continue reading Hedge Funds Under Scrutiny
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The Wall Street Journal – Criticism Hinders Fed’s Easing Plan Criticism of the Federal Reserve’s latest bond-buying program, both from insiders and from U.S. politicians, is muting the plan’s potential benefits for the economy. Amid widely publicized skepticism about the efficacy and wisdom of the bond buying, investors and traders are questioning whether the Fed… Continue reading Still Criticizing QE2
<Click on chart for larger image> Comment Just like the Greek crisis in May, the Irish crisis can date itself to a political statement. This time it was Angela Merkel saying in Late October that bondholders should take a haircut (highlighted on the chart above). Last December it was Trichet saying the relaxed collateral requirements… Continue reading Ireland Gets A Bailout
<Click on chart for larger image> The Telegraph (UK) – Ambrose Evans-Pritchard: Portugal next as EMU’s Máquina Infernal keeps ticking The Portuguese seemed baffled – and pained – that investors should link their country in any way with Greece or Ireland. I am afraid they must come to terms very soon with some unpleasant facts.… Continue reading After Ireland, Who Is Next?
The Wall Street Journal – Steven Malanga: The ‘Build America’ Debt Bomb The state and city fiscal mess is getting worse, yet the Obama administration wants Congress to make new taxpayer-subsidized bonds permanent But the BAB program hasn’t been the unqualified success its advocates claim. While the original municipal bond crisis in late 2008 was… Continue reading Muni Trouble?
Barron’s – Banks Face Another Mortgage Crisis The government may have bailed out the nation’s biggest banks, but now the courts will sort out who gets stuck with mortgage losses. Banks could lose more than $100 billion. JUST WHEN AMERICA’S MAJOR BANKS seem to be back on their feet, having paid back federal bailout money… Continue reading Will Banks Have More Losses?
The New York Times – China Move Could Counter Fed’s Efforts China’s central bank unexpectedly announced on Friday night that it would require commercial banks to set aside a bit more money. It was the second such move by Beijing this month and the clearest sign yet that China means to counter the Federal Reserve’s… Continue reading Is China Trying To Offset QE2?