The Economist – Buttonwood: Dodging defaults The corporate-bond market has proved more resilient than feared AS INVESTMENT banks toppled in the autumn of 2008, panic swept the corporate-bond market. With bank finance disappearing, company profits under grave threat and a slump apparently on the way, investors feared that a wide range of firms would be… Continue reading Corporate Bonds
The Economist – Corporate profitability: Profits, but no jobs How long can corporate America’s profit rebound continue? Corporate America is reaping the rewards for tough actions taken after the financial markets collapsed in September 2008. When the economy went into a tailspin, firms realised that they needed to build up reserves of cash—fast. They could… Continue reading Profit And Jobs
Global Economic Analysis (Blog) – ECRI’s Lakshman Achuthan Still Blowing Smoke Lakshman Achuthan and Anirvan Banerji, co-founders of ECRI maintain the ECRI’ WLI Weekly Leading Index (Still) Widely Misunderstood. I am going to cut to the chase because all Achuthan and Banerji did in that piece is blow smoke without addressing the critical issue. Here… Continue reading The ECRI Debate Continues
The Rolling Stone – Matt Taibbi: Wall Street’s Big Win Finance reform won’t stop the high-risk gambling that wrecked the economy – and Republicans aren’t the only ones to blame “The next phase of all this – the regulatory phase – is going to be supertechnical and complex,” says one Senate aide. “It raises questions… Continue reading FinReg
The Financial Times – US economic adviser Romer steps down Christina Romer, head of the Council of Economic Advisers, on Thursday became the second prominent member of Barack Obama’s economic team to resign following last week’s departure of Peter Orszag, the White House budget director. Ms Romer, who will return to her job teaching economics… Continue reading Romer Leaves
The Economist – Financial games: Another roll of the dice New ways to take your friends and family to the cleaners THE most famous board game of them all, “Monopoly”, was launched during the Depression. This crisis may not produce anything quite as successful, but it has also spawned a crop of new financial games. … Continue reading The Great Recession’s “Monopoly”
None Today
A customer asked us about the state of deleveraging since the credit crisis began. In short, there has been none. Let us explain using the broadest measures of debt available from the Federal Reserve’s Flow-of-Funds report (the data is current through Q1-2010. Q2 data will be released on September 17). The next two charts show… Continue reading The State of Credit Market Deleveraging – None So Far
<Click on chart for larger image> The Wall Street Journal – U.S. Debt: It Gets Better With Age Going long still looks the right play for Tim Geithner, but some of his Wall Street coaches are recommending a different approach. Two years ago, heavy short-term debt issuance drove the average maturity of outstanding U.S. Treasurys… Continue reading The Average Maturity Of U.S. Debt Is On The Rise
MarketBeat (WSJ Blog) – Should We Still Heed the Message of the Bond Market? Here’s a pretty stark example of the confusion characterizing the markets at the moment. Take a look at the Treasurys markets and stocks. Normally these two asset classes are like cats and dogs, oil and water, Pelosi and Bush. But in… Continue reading Stocks vs. Bonds
The Financial Times – Fed dilemma on fresh monetary easing As economic indicators in the US on consumer spending and housing point to renewed gloom and raise fears of a “double dip”, markets are expecting the Federal Reserve to step in again to ease credit – lowering rates at which companies and consumers borrow –… Continue reading QE2
The Financial Times – Goldman eyes ‘prop desk’ shake-up Goldman Sachs is preparing to shut down the unit that trades with the bank’s funds and move its traders to either an independent hedge fund or its asset management arm to comply with new US law and prevent an exodus of star employees. People close to… Continue reading Prop Desks