The Wall Street Journal – How QE 2 could drift off course The Federal Reserve this week decided to carry out enough Treasury purchases to stop its balance sheet shrinking. This was a wise move, as a contracting Fed balance sheet could have led to a de facto tightening of monetary policy while the economy… Continue reading QE2
<Click on chart for larger image> The Wall Street Journal – ‘Junk’ Market Blooms Investors snatched up the new benchmark 10-year Treasury at the lowest yield on record Wednesday, offering fresh evidence of the scramble into U.S. government bonds at a time of growing uncertainty about the economic outlook. Those concerns could spell trouble ahead… Continue reading High Yield Issuance
Bloomberg Businessweek – Taleb Says Government Bonds to Collapse, Avoid Stocks Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in “The Black Swan,” said he is “betting on the collapse of government bonds” and that investors should avoid stocks.“I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today.… Continue reading Nassim Taleb
FT Alphaville (FT Blog) – ‘There is no money multiplier’ Here’s an elegant solution to the problem of the US’s missing money multiplier. Just declare it doesn’t exist. Or at least, not as we know it. That’s just what Seth B. Carpenter and Selva Demiralp are arguing in a new Federal Reserve working paper. It’s… Continue reading In Search Of The Missing Money Multiplier
We would like to dedicate this song to Ben Bernanke.
Conference Call Presentation/Charts of the Week Topics Covered This Week Include: QE 1A The Federal Reserve’s Holdings Of Government Securities Big Owners Of Government Securities Should We Worry About Deflation? Owners’ Equivalent Rent: An Update Economic Indicators That Lead vs. Coincident ECRI – Slowdown or Double Dip? Economic Indicators That Lead Do Stocks Predict Recessions?… Continue reading Untitled
The New York Federal Reserve – Statement Regarding Reinvestment of Principal Payments on Agency Debt and Agency MBS On August 10, 2010, the Federal Open Market Committee directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current… Continue reading The Federal Reserve Downgrades Its Assessment Of The Economy
<Click on chart for larger image> <Click on chart for larger image> The New York Times – Economic Pessimists Gain Cachet The central question dividing economists these days is whether Western governments should spend more to ward off a potential second recession or retrench to hold down their ballooning debts to restore confidence among investors.… Continue reading Bearish Sentiment
<Click on chart for larger image> Reuters.com – Record low mortgage rates do little for US demand U.S. home loan demand climbed last week but record low mortgage rates failed to light a fire in a market constrained by unemployment and tight lending practices. Mortgage purchase and refinancing applications rose by less than 1 percent… Continue reading Mortgage Rates And 10-Year Treasury Yields Plunge
<Click on chart for larger image> Bloomberg.com – Obama Signs Measure for $26 Billion in State Aid President Barack Obama signed into law legislation providing $26 billion in aid to cash-strapped state governments amid fears the U.S. economy is stalling just months before this year’s midterm elections. The House, taking a one-day break from the… Continue reading Yet Another State (Muni) Bailout
The Wall Street Journal – John C. Michaelson: The High Costs of Very Low Interest Rates Money that should be invested to create jobs is instead funding government debt, while worried consumers sit on the sidelines. The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term… Continue reading Interest Rates
<Click on chart for larger image> The Wall Street Journal – China’s Economy Continues to Slow Key drivers of China’s economic growth continued to cool in July, according to new figures that the government said showed the success of its recent push to achieve a moderate slowdown and avoid asset bubbles. China’s government has this… Continue reading China