<Click on chart for larger image> FT Alphaville ( FT Blog) – Oops, MBS settlements failing again As FT Alphaville has explained before, the failures occur when the MBS seller fails to deliver on an agreed-upon settlement date. This is a problem for both buyers and sellers, since it means they could have to go… Continue reading MBS Fails On The Rise
The Wall Street Journal – Will Jackson Hole Generate a Curve Fall? Market expectations of more quantitative easing, alongside weak economic data, have led U.S. bond yields to fall sharply. Friday’s speech from Federal Reserve Chairman Ben Bernanke might include his latest thinking on asset purchases.But are investors thinking through the consequences, particularly for long-dated… Continue reading The Yield Curve
The New York Times – A Big Surprise: Troubled Assets Garner Rewards American taxpayers are already poised to make unexpected billions from rescuing the nation’s banks. Now, they could reap another sizable profit from a government program devised to purge troubled real estate assets from the financial system. The Obama administration made the so-called Public-Private… Continue reading Are The Taxpayers Actually Going To Make Money On The Bailout?
The Washington Post – Mohamed A. El-Erian: Why another fiscal stimulus won’t do Throughout the summer, data signals have become more alarming. Despite all the rhetoric about job creation, unemployment remains stubbornly high and the problem is becoming structural in nature (and, therefore, harder to solve). Consumer credit continues to contract while small companies find… Continue reading Mohamed El-Erian Speaks Out Against Fiscal Stimulus
<Click on chart for larger image> The Financial Times – A broken relationship The goldfish-like memory of investors was on show again on Thursday as one piece of moderately good news, lower than expected weekly US jobless claims, led to a short-lived equity rally and a bond sell-off. Did the market forget this week’s dire… Continue reading Correlation In The Markets
Zero Hedge (Blog) – Guest Post: Hyperinflation, Part II: What It Will Look Like Now let’s return to the possibility of hyperinflation in the United States: If there were a sudden collapse in the Treasury bond market, I argued that sellers would take their cash and put them into commodities. My reasoning was, they would… Continue reading What Would Hyperinflation Look Like?
Marketwatch.com – Rex Nutting: Double dip and other labels don’t matter It still feels like a recession. We don’t have enough jobs, and a great cloud of uncertainty and doubt hangs over each of us. Instead of accelerating out of the slump and settling into cruising speed as it usually does, the economy has stalled… Continue reading Jobs
Marketwatch.com – S&P to hit 450 with U.S. worse than ‘lost’ Japan: strategist A noted bearish strategist said Thursday that the S&P 500 will tumble to 450 because conditions in the U.S. are “much, much worse” than during the lost decade in Japan. As the market debates whether bond prices are in bubble territory, Societe… Continue reading Very Bearish Talk
<Click on chart for larger image> Calculated Risk (Blog) – Home Sales: Distressing Gap This is something I’ve been tracking for years … this graph shows existing home sales (left axis) and new home sales (right axis) through July. This graph starts in 1994, but the relationship has been fairly steady back to the ’60s.… Continue reading Housing: The Distressing Gap
<Click on chart for larger image> The Financial Times – View of the Day: Toby Nangle, Barings The way G7 countries respond to the challenge of debt sustainability is one of the most important questions facing investors today, says Toby Nangle, director of asset allocation at Barings. But just what constitutes a sustainable level of… Continue reading What Is An Acceptable Level For Debt To GDP?
The New York Times – Paul Krugman: There Are Bubbles, And Then There Are Bubbles On the whole, I find it amazing and distressing that fear of new bubbles is playing such a large role in current policy discussion, leading too many prominent economists to recommend raising interest rates in the face of a hugely… Continue reading Bubble Talk