Seeking Alpha – Why the CPI Is Understating Inflation The other big reason for low CPI readings is the housing market. As Brian Wesbury has noted repeatedly, one of the key factors depressing the CPI over the past year or so has been the government’s estimate of how much rent homeowners would be paying if… Continue reading OER
The Economist – The future of Japan: The Japan syndrome The biggest lesson the country may yet teach the world is about the growth-sapping effects of ageing IN 1979 Ezra Vogel, a Harvard academic, wrote a book entitled “Japan as Number One: Lessons for America” in which he portrayed Japan, with its strong economy and… Continue reading Learning From Japan
The Economist – Economics focus: Data birth Fifty years after the dawn of empirical financial economics, is anyone the wiser? IT ALL began with a phone call, from a banker at Merrill Lynch who wanted to know how investors in shares had performed relative to investors in other assets. I don’t know, but if you… Continue reading Remembering The Early Days Of Financial Data
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The Wall Street Journal – GM Stock Sale in High Gear General Motors Co. is on pace to sell $18.1 billion in shares in what likely will be the second-largest U.S. initial public offering ever, capping a remarkable two-year turnaround in which the car maker went from begging for a government bailout to posting its… Continue reading GM IPO: If Geithner Did His Job Correctly, The Market Should Be Peaking
The Wall Street Journal – Burton G. Malkiel: ‘Buy and Hold’ Is Still a Winner An investor who used index funds and stayed the course could have earned satisfactory returns even during the first decade of the 21st century. Many obituaries have been written for the investment strategy of buy and hold. Of course, investors… Continue reading Is ‘Buy And Hold’ Still A Viable Investment Strategy?
The Wall Street Journal – Fed Orders 2nd Round of Stress Tests The Federal Reserve plans to scrutinize the nation’s top 19 banks for a second time, the latest indication federal regulators are seeking to toughen oversight of the nation’s biggest financial institutions. The Fed, in guidance issued Wednesday, said the 19 largest bank-holding companies… Continue reading More Stress Tests: Is The Federal Reserve Trying To Tell Us Something?
Bloomberg.com – Andre Sapir: Euro’s Recipe for Redemption Needs Two Ingredients A decade after the euro’s birth, Greece revealed glaring defects in the design of the common currency. Existing rules failed to prevent the buildup of sovereign debt, and there were none to manage or resolve crises. In March, European leaders asked European Union President… Continue reading Can The Euro Survive?
<Click on chart for larger image> The Wall Street Journal – Loan in ‘Tens of Billions’ Seen for Ireland Negotiations on Thursday to defuse the latest European debt crisis will likely lead to Ireland receiving a loan on the order of “tens of billions” of euros from its European Union counterparts, the country’s central bank… Continue reading Ireland
<Click on chart for larger image> The Financial Times – Core US inflation slowest on record Core consumer prices in the US are rising at their slowest pace since records began, bolstering the case for the Federal Reserve to complete its planned $600bn in asset purchases and extend the programme to buy more… The latest… Continue reading Inflation
The Financial Times – Lex: US mortgages Last week’s 14 per cent drop in US mortgage activity, coming during the first full week of QE2, is a reminder of the limits of monetary and fiscal stimuli. Housing, as the main source of both household wealth and consumer credit, is a critical monetary transmission mechanism. Considerable… Continue reading Housing