The Wall Street Journal – Yield Curve as Recession Harbinger here’s no surefire way to forecast recessions. But watching the “yield curve” comes awfully close. Essentially the difference between long term and short term U.S. government debt yields, the yield curve is a powerful harbinger of recessions and recoveries. Nearly every time the yield on… Continue reading The Yield Curve
Bloomberg.com – Manhattan Luxury Condos Try FHA Backing in `Game Changer’ The Federal Housing Administration agreed in March to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo. That enables buyers to make a down payment of as little as 3.5 percent in a building where apartments range from $820,000 to… Continue reading FHA
The Wall Street Journal – Brent Arends: Is a Crash Coming? Ten Reasons to Be Cautious 1. The market is already expensive.2. The Fed is getting nervous. 3. Too many people are too bullish. 4. Deflation is already here. 5. People still owe way too much money. 6. The jobs picture is much worse than… Continue reading Scary Talk Everywhere
New York Magazine – Mark Gimein: Is This Normal? The uncertainty of our economic uncertainty. At the height of the bank panic, it seemed that we were on the verge of a cataclysmic unwinding of the once-roaring financial system. Now we seem to have settled uncomfortably into the backseat of an economy sputtering along feebly.… Continue reading The New Normal
Real Time Economics (WSJ Blog) – Fed’s Hoenig: Rates Need to Rise On Tuesday, the Fed decided to provide additional support to an economy whose recovery appears to be faltering, by deciding to maintain the size of its balance sheet, rather than letting it slowly shrink. The Fed will do this by reinvesting the proceeds… Continue reading Hoenig Explains Himself
<Click on chart for larger image> Bloomberg.com – Mortgage Bonds Pare Relative Declines Amid Worst Trading Month Since 2008 The Fed’s statement may also be hurting mortgage bonds because it made it appear less likely that the central bank will ever buy mortgage bonds again, after some investors anticipated any announcement on it reinvesting would… Continue reading MBS Trading
Bloomberg.com – Caroline Baum: It Takes a Tea Party to Start a Tax Revolution Have you read the U.S. Constitution recently, especially the part where We, the People, give Congress the power to levy and collect taxes? There’s nothing in there about carving out special exemptions for certain individuals or groups; about using tax credits… Continue reading Politics And The Mid-Term Elections
Yesterday we hosted a conference call titled “Earnings , QE2 and the Markets.” If you missed it, here is the Audio Handout, and Webcast. Jim Bianco was also on Ron Insana’s radio show yesterday discussing many of these same issues. The interview begins at the 35:40 mark of this audio. Finally, Jim was also on… Continue reading Earnings , QE2 and the Markets
The Financial Times – Lex: Bond markets In the fight between deflationists and inflationists, the former seem to have the upper hand these days. On Tuesday, the Federal Reserve offered official support to their belief that the US, along with much of the rest of world, faces years of Japanese-style price stasis. Investors, however, are… Continue reading The Bond Market And The Federal Reserve
The Wall Street Journal – Foreign Bank Borrowing in Commercial-Paper Market Increases Foreign banks are back as major borrowers in the short-term U.S. commercial-paper market, according to Federal Reserve data released Thursday, as investors resumed lending to them after European banks passed stress tests last month. Several European banks had been shut out of this… Continue reading Is Commercial Paper Rebounding?
The Wall Street Journal – ECB Buys Irish Government Bonds to Calm Market The European Central Bank has bought short-dated Irish government bonds over the past 24 hours in a bid to calm rising market volatility stemming from concerns on the creditworthiness of Irish banks, two people familiar with the matter said. The move, part… Continue reading European Government Bonds A Problem Again?