The Wall Street Journal – The Fed Can Create Money, Not Confidence A report by the Federal Reserve Bank of New York last week showed that consumers are having difficulty climbing out of the debt hole they dug for themselves before the credit bubble began to deflate in late 2007. The report gives support to… Continue reading This Is Not A Monetary Problem
Comment We have long argued that Intrade’s betting markets (highlighted in the right-hand column) are great real-time indications of market opinion. We have not suggested that these markets possess any special wisdom, but rather they are an accurate reflection of what is known. Often an accurate reflection is all that is needed to have a… Continue reading Is A Republican House Now Priced In?
The Wall Street Journal – Court Declines to Review Ruling for Fed Disclosure A federal appeals court declined to reconsider its March ruling that the Federal Reserve must disclose documents regarding borrowing from its discount window and other “last resort” lending programs. The Fed could appeal next to the U.S. Supreme Court. In May, the… Continue reading Audit The Federal Reserve
MarketWatch – Crash and burn The market is falling, the market is falling! That’s the urgent warning coming from devotees of an esoteric market timing gauge known as the Hindenburg Omen. They say that it is a reliable indicator of an imminent stock market crash. But I’m not so sure. In fact, my review of… Continue reading The Hindenburg Omen: The Hottest Technical Indicator Since The Death Cross
The Wall Street Journal – New Fees Weighed for Mortgage Industry The Obama administration may propose that any federal backing of mortgages be paid for through fees on the lending industry, according to people familiar with the internal discussions. While the administration hasn’t settled on a plan to revamp failed mortgage giants Fannie Mae and… Continue reading Homeownership For Everyone!
Barron’s – Randall W. Forsyth: Vacuous Bond-Bubble Talk THERE’S A REAL BUBBLE TAKING PLACE in the markets and you can scarcely miss it, so blatant and omnipresent has it become. It is, of course, the bubble in talk about a bond bubble. As for an actual bubble in bond prices, that’s quite a different story.… Continue reading Bond Bubble
Bloomberg.com – Bernanke Must Raise Benchmark Rate 2 Points, Rajan Says Raghuram Rajan accurately warned central bankers in 2005 of a potential financial crisis if banks lost confidence in each other. Now the International Monetary Fund’s former chief economist says the Federal Reserve should consider raising rates, even as almost 10 percent of the U.S.… Continue reading What Should The Federal Reserve Do?
The Wall Street Journal – S&P Raises Concerns Over Turkey Ratings agency Standard & Poor’s Corp. on Monday warned on Turkey’s future creditworthiness amid signs that the government is steering an expansive fiscal policy that will lead to bigger budget and current-account deficits. The warning comes amid growing market concerns over Ankara’s spending plans in… Continue reading Europe Slows
<Click on chart for larger image> The Financial Times – Housing Fades as a Means to Build Wealth, Analysts Say Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when… Continue reading Housing: Bankrupt And Corrupt
The New York Times – RICHARD H. THALER: The Overconfidence Problem in Forecasting BUSINESSES in nearly every industry were caught off guard by the Great Recession. Few leaders in business — or government, for that matter — seem to have even considered the possibility that an economic downturn of this magnitude could happen. What was… Continue reading Getting Forecasts Wrong
The Financial Times – Lex: Low yields Investors are squealing and tutting as bonds yields edge ever lower. Some decry the lack of returns, others warn of a bubble that will surely burst. Irrespective of where bonds are heading, however, everyone should at least heed two important truths: the first concerns returns, the second risk.… Continue reading Low And High Interest Rates