<Click on graphic for larger image> The New York Times – Floyd Norris: After the Fed’s Action, Watching Inflation’s Trajectory THE core rate of inflation fell to a record low in the United States last month, rekindling fears of deflation and warnings that the Federal Reserve might have to take even more aggressive steps to… Continue reading Inflation
The Wall Street Journal – Junk-Bond Boom Takes a Timeout While this past week may well be a blip, the struggles of some deals do show how investors are becoming more demanding. It is likely to slow the flood of issuance into the “junk”-bond market and force private-equity firms to sweeten the terms of some… Continue reading Junk Bonds
The Wall Street Journal – Commodities Whipsaw Investors Volatility set to continue as China wrestles with inflation; big bets add to risk of reversal. Prices of everything from gold to copper and cotton leapt to new highs, only to be slapped down just as quickly. Trading volume in many commodities roared to records, including for… Continue reading Commodities
The Weekly Standard – Irwin M. Stelzer: Rays of Happiness Cutting Through the Economic Gloom “Don’t worry, be happy,” songwriter Bobby McFerrin instructed. But that was in 1988, at the close of Ronald Reagan’s successful presidency. The unemployment rate, at 7.2 percent and rising when Reagan was sworn in, had fallen to 5.3 percent. The… Continue reading Saying Nice Things About The Economy
Bloomberg.com – Nobel Laureate Diamond Is Unqualified for Fed: Mark A. Calabria Peter Diamond, the Nobel Prize- winning economist nominated for the Federal Reserve Board, should be rejected by the Senate and sent home to Massachusetts. There, where he is a professor at Massachusetts Institute of Technology, he can do the least harm to U.S.… Continue reading Is Peter Diamond Not Qualified For The Federal Reserve?
None Today
In an August TIC Update, we first noted that Chinese holdings of U.S. notes and bonds were able to remain near all-time highs at the expense of a roughly $200 billion reduction in their T-Bill holdings: Thus far China has not had to sell their holdings of notes and bonds to any meaningful degree. Instead,… Continue reading China Reduces Its Dollar Exposure Via The Agency Market
The Wall Street Journal – Bernanke Takes Aim at China Federal Reserve Chairman Ben Bernanke is firing back amid criticism at home and abroad of the Fed’s easy-money policies, arguing that China and others are causing global problems by preventing their currencies from strengthening as their economies boom. By keeping their currencies artificially weak, Mr.… Continue reading Bernanke
The Wall Street Journal – Market Optimism Is Ominous Sign As if Tuesday’s sell-off on the stock market weren’t enough to be worried about, now comes some more ominous news. Global money managers have just turned dangerously optimistic. The booming market rally of September and October, and the Fed’s new promise of easy money for… Continue reading Investor Sentiment
The Economist – European bond markets: Last among equals Even if Europe’s bond markets calm again, they will be profoundly changed Things have changed. A statement by Germany that if borrowers are unable to repay their debts then it is their creditors who ought to bear the losses looks wholly uncontentious on the surface. Yet… Continue reading Europe
Bloomberg.com – China to Raise Reserve Ratio by 50 Basis Points From Nov. 29 China ordered banks to set aside larger reserves for the fifth time this year, draining cash from the financial system to limit inflation and asset-bubble risks in the world’s fastest-growing major economy. The ratio will increase 50 basis points starting Nov.… Continue reading China Raises Banks’ Reserve Requirements, Fears Inflation
<Click on chart for larger image> MarketWatch.com – California selling bonds into muni market rout California plans to sell almost $14 billion in debt just as the municipal bond market gets pummeled by a flood of supply, worries about the future of the Build America Bonds program and a selloff in the Treasury market. The… Continue reading Trouble In Muni Land Continues