The Economist – How to stop a currency war Keep calm, don’t expect quick fixes and above all don’t unleash a trade fight with China IN RECENT weeks the world economy has been on a war footing, at least rhetorically. Ever since Brazil’s finance minister, Guido Mantega, declared on September 27th that an “international currency… Continue reading Covering Currency Wars
<Click on chart for larger image> The New York Times – Lending Is Up, but Demand Is Lacking After that surge, bank lending plunged. Banks tightened credit standards and, like many investors, became intolerant of any real risk. In the third quarter of last year — even after the recession had ended — commercial and… Continue reading Lending
The Financial Times – Mohamed El-Erian: The Fed feels compelled to experiment This week’s release of the minutes of the September 21 meeting of the Federal Open Market Committee points to an activist Federal Reserve that is in policy experimentation mode – an institution that feels compelled to take additional measures to energise the American… Continue reading Why Do We Need QE2?
The Wall Street Journal – Document Mess Hits Fannie, Freddie Raising questions for the first time about the role of Fannie Mae and Freddie Mac in the unfolding mortgage-foreclosure crisis, the two government-owned giants are reviewing the work of a Florida law firm they recommended to process foreclosures. Until now, Fannie and Freddie have been… Continue reading The Mortgage Foreclosure Mess
Real Time Economics (WSJ Blog) – Did Fed Cause 2000s Bubble by Holding Rates Too Long Too Low? A running argument between Alan Greenspan and Ben Bernanke, on one side, and a small band of vociferous critics, on the other side, turns on a question easier to pose than to answer: Did the Fed contribute… Continue reading Will QE2 Cause The Same Problems As 2000′s Low Rate Environment?
FT Alphaville (FT Blog) – Currency wars – ‘The crisis is upon us’ We’ve already commented on the rampant descent of the dollar on Thursday. But here’s a scarily convincing argument from Marc Ostwald at Monument Securities about what all these QE-related currency war shenanigans could really be indicating. In one smooth line he suggests… Continue reading Currency Wars
Bloomberg.com – Krugman, Niall Ferguson Renew Debate Over U.S. Stimulus Nobel Prize-winning economist Paul Krugman and Niall Ferguson, author of “The Ascent of Money: A Financial History of the World,” clashed anew today over how to revive the U.S. economy. Krugman, 57, a Princeton University professor, is urging the Obama administration to undertake a second… Continue reading Krugman vs. Ferguson
MarketBeat (WSJ Blog) – Tsk Tsk Please Stop Overhyping Risk One thing that drives me nuts is the way market pros talk so frequently about “risk” to describe market activity. For instance, one large bank this morning opens its note with “Overall it has been a solid 24 hours for risk.” In the parlance, “risk”… Continue reading Have We Overused the Phrase “Risk On/Risk Off”?
The Wall Street Journal – Dividend Rock: Firms Reward Buyout Bosses Private-equity firms are on pace to suck a record amount of cash out of the companies they own, responding to a robust borrowing market and a possible dividend-tax increase in 2011. But some investors are beginning to question whether the frenzy has gone too… Continue reading Dividend Payouts On The Rise At Private Equity Firms
The Financial Times – Crackdown hangs over derivatives bets The days when traders could take big bets on commodities futures or other derivatives look to be disappearing fast. Restrictions over the size of bets that speculators can take have long been a feature of the grains, fuels and metals futures markets. Now, under US derivatives… Continue reading Limiting Derivatives
Zero Hedge (Blog) – Mr T Talks Gold On Bloomberg Mr. T pities the fool who does not buy gold. And having been gobbling up the shiny metal since 1977, Mr T’s cumulative return puts about 90% of the hedge fund managers currently in the business to shame, and proves, once and for all, that… Continue reading Is This A Surefire Sign Of A Top In Gold?