Bloomberg.com – Caroline Baum: Fed Ignored Foreclosed Homes In Asset Choices Instead of another round of Treasury purchases, the Fed missed an opportunity to kill two birds with one stone by using QE2 to buy foreclosed homes. I was half-kidding when I wrote that sentence. Now I’m not so sure it’s a bad idea, assuming… Continue reading Why Doesn’t The Federal Reserve Just Buy Houses?
<Click on chart for larger image> The Wall Street Journal – Some Players Still Sidelined in Lending Game Banks have slowly begun to increase their lending to small companies. But generally only the strongest of firms—those that tend to be larger, with cash and collateral on hand—are receiving loans and lines of credit. Many of… Continue reading Lending
None Today
Conference Call Presentation/Charts of the Week Topics Covered This Week Include: How Did The Federal Reserve Arrive At $600 Billion? Inflation Expectations Why No Record Refis? Did Larry Meyer Beg The Fed To Create An Equity Bubble? POMO And The Stock Market The Economy And QE How Well Has QE Worked So Far? Earnings And… Continue reading Untitled
Marketwatch.com – Paul Farrell: Sell bonds now, Fed’s QE2 is doomed to fail Commentary: Buffett, Gross, Grantham, Faber, Stiglitz agree: Bernanke plan a disaster The Fed is making the same kind of mistakes Japan made that resulted in its 20-year recession. The Washington Post says Larry Mayer, a former Fed governor, estimates that to work… Continue reading The Federal Reserve Meets Today
Bloomberg.com – Business Looks to Republicans to Block Obama on Rules, Taxes The Republican gains in Congress mean U.S. companies from Goldman Sachs Group Inc. to Wellpoint Inc. may be able to weaken or block what they consider President Barack Obama’s anti-business policies on health care, the environment, taxes and financial reform. “This is truly… Continue reading How The Election Results Will Affect Business, Bernanke And Obama
Bloomberg.com – Australia Lures Pimco With Debt Returning Most Since 2004: Inflation Bonds Because some banks may raise their lending rates by a bigger amount than the RBA’s increase, the potency of yesterday’s move may be heightened, diminishing the attraction of medium-term inflation bonds, according to Barclays Capital. Commonwealth Bank of Australia, the nation’s biggest… Continue reading Australia
The Financial Times – Martin Feldstein: QE2 is risky and should be limited Mr Bernanke’s argument for QE is based on the “portfolio balance” theory which stresses that, when the Fed buys bonds, investors increase their demand for other assets, particularly equities, raising their price and increasing household wealth and spending. Equity prices have already… Continue reading The Portfolio Balance Theory
Globe and Mail (Blog) – Neil Reynolds: The scary actual U.S. government debt Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP.… Continue reading The U.S. Government’s Debt Woes
<Click on chart for larger image> Marketwatch.com – Mark Hulbert: Deja vu, all over again? Yet another sovereign-debt crisis passes into the history books, and the stock market rallies. I say this because the last year is not the first time in recent history in which there has been a run on a nation’s currency… Continue reading Europe’s Debt Crisis Continues, But Does It Affect Market Performance?
The New York Times – Casey B. Mulligan: The Failure of Mortgage Modification The Obama administration’s Home Affordable Modification Program for reducing mortgages of homeowners who owe more than their houses are worth has fallen far short of its objectives. Officials seem surprised by that outcome and blame the result on administrative problems. But, all… Continue reading Mortgage Mods