The Wall Street Journal – Goldman Says Peak In Treasurys Is Past Goldman Sachs Group Inc., hitherto one of the biggest Treasury-bond bulls on Wall Street, now says the rally has seen its peak and the best trade going forward is to buy stocks, not bonds…In recent weeks, the Treasury market got a boost from… Continue reading Goldman Thinks QE2 Is Already Priced Into Bonds
<Click on chart for larger image> Bloomberg.com – Ireland’s Rating May Be Downgraded by Moody’s on Banks Ireland’s credit rating may be cut by Moody’s Investors Service after the government pledged as much as 50 billion euros ($68.6 billion) to save the country’s banks. Ireland’s Aa2 rating will “most likely” be cut by one level… Continue reading Ireland
The Wall Street Journal – Debate on ‘Crash’ and Its Causes While regulators are emphasizing the role a single trade played in kicking off the May 6 “flash crash,” some are arguing that takes the focus away from the broader, underlying causes of the stock market’s failure that afternoon. In a joint report released last… Continue reading The Flash Crash
<Click on chart for larger image> <Click on chart for larger image> MarketBeat (WSJ Blog) – Gold: Wow! An Actual Analysis of What Could Support Prices! One reason we don’t like gold: It’s rare that you hear a reason to buy it that does not involve hyperbolized frothing about Weimar-style inflation and the impending collapse… Continue reading Gold Bubble
Real Time Economics (WSJ Blog) – Bernanke: Additional Asset Purchases Could Ease Financial Conditions Federal Reserve Chairman Ben Bernanke Monday said he believes further asset purchases could help the economy, signaling he would support the move if the economy remains weak. Speaking to college students, Bernanke illustrated how the Fed was able to lift the… Continue reading Arguing The Case For More Asset Purchases
The Wall Street Journal – Yield Hunt Leads to Currency Debt The global rush for yield is driving investors to buy emerging-market debt issued in local currency, adding foreign-exchange fluctuations to the list of risks bondholders face. The latest evidence came Monday when the Asian Development Bank reported that foreigners are taking an ever bigger… Continue reading Reaching For Yield
The Financial Times – Lex: Bank of Japan An interesting choice of words from Masaaki Shirakawa. Investors hearing of a “comprehensive monetary easing” policy might have been braced for something radical from the Bank of Japan’s governor: a commitment to start monetising the government’s horrendous deficit, perhaps, or a big expansion of the fixed-rate loans… Continue reading The Bank Of Japan Cuts Rates
The Financial Times – Edward Chancellor: Why some housing bubbles remain Housing bubbles appear pretty similar on the way up. Yet the aftermaths of recent real estate booms in the US, UK, Spain and Australia have been extremely varied. US home prices took a real hammering. The formerly hot housing markets of the UK and… Continue reading Housing Bubble
The Wall Street Journal – Banks Pile Into Safer Bets Tighter regulatory requirements are compelling giant investment banks in the U.S. and Europe to tone down their risk-taking and shift to more staid strategies. Now hot on Wall Street: trading securities for clients, processing trades, exchanging currency, managing assets and advising clients on deals and… Continue reading How Are Banks Making Money These Days?
None Today
Bloomberg.com – Fed Bond Buying’s Unintended Consequences May Push Up Rates Based on what the Fed bought in 2009, yields are trading as if it has already acquired an additional $315 billion to $670 billion of securities, according to Deutsche Bank AG, one of the 18 primary dealers that trade with the central bank. Policy… Continue reading Is QE Already Priced In?
The Wall Street Journal – The Bond ‘Bubble’: Are Small Investors Taking Too Big a Bet? What they have been doing is responding rationally by moving out of money-market funds. Nearly $500 billion has come out of money funds so far in 2010. Thus, it seems, most people aren’t selling off their stock funds to… Continue reading Where Is The Money That Is Flowing Into The Bond Market Coming From?