Charts of the Week Topics Covered This Week Include: Earnings Season Underway – Gamed And Useless Statistics Are Coming Who Buys U.S. Treasuries? Who Owns Muni Bonds? Financial Stock Performance, Profitability And The Yield Curve Financial Sector Profits Partial Contribution Of Yield Curve To U.S. Equities Decreasingly Negative Stocks Making A Bit Of A Comeback…… Continue reading Untitled
Jim Bianco will appear on CNBC at 1:00 CT today discussing the FOMC minutes. He will be joined by Steve Liesman and Zane Brown of Lord Abbott. Notes For The Interview The FOMC statement on June 23 used wording that suggests a “downgrade” in the outlook of the economy. Specifically, the June 23 statement said:… Continue reading CNBC Interview On Today’s FOMC Minutes – Is QE Coming?
The Financial Times – Risk stress tests have been misunderstood The details of Europe’s stress tests went down well with investors last week. Analysts remain sniffy about the leaked numbers for the tested losses on government bonds held in bank trading books – put at 17 per cent for Greek bonds, less than many would… Continue reading Stress Tests & Austerity
<Click on chart for larger image> The Financial Times – Leverage crises nature’s way of saying ‘slow down’ Much has changed in the world economy over the past three years, but then nothing has changed. In 2007, the ratio of total debt to gross domestic product was 350 per cent in the US. In the intervening… Continue reading How Much Deleveraging Have We Actually Seen?
<Click on chart for larger image> The Wall Street Journal – Corporate-Bond Issuers Step Up The U.S. corporate-bond market saw a rush of new supply after second-quarter earnings season began on a positive note and issuers that aren’t subject to an earnings blackout took advantage of ultralow risk premiums to issue debt. “The summer doldrums… Continue reading Corporate Issuance
<Click on chart for larger image> Bloomberg.com – Illinois `Fiscal Malpractice’ Widens Yield Gap in $900 Million Bond Offer Illinois, whose comptroller said the state is in the worst financial position in its history, may face a risk premium that is almost 15 percent above what it paid last month when it sells $900 million… Continue reading Fiscal Malpractice
The Wall Street Journal – Panel Fears Small Banks Could Get Trapped in TARP, Stymie Recovery Should economic growth continue to stagnate, small banks could find themselves trapped in the government’s bailout program and unable to boost lending, an oversight panel said in a report Wednesday… While many of the larger banks receiving bailout funds… Continue reading TARP
The Financial Times – Analysis of risk appetite is a fad, not a framework The “risk-on/risk-off” mantra that dominates markets is a fad rather than a framework for analysis and could disappear as quickly as it arrived, according to David Bloom, head of FX research at HSBC. He says the obsession is due to the… Continue reading Risk On/Risk Off
The Wall Street Journal – Letting the Machines Decide Wall Street is notorious for not learning from its mistakes. Maybe machines can do better. That is the hope of an increasing number of investors who are turning to the science of artificial intelligence to make investment decisions…Most investors trying the approach are using “machine learning,”… Continue reading This Could Not Possibly End Badly, Right?
The New York Times – Europeans Weigh Details of Stress Test, and How Much to Disclose European Union finance ministers met Monday to start two days of discussions partly aimed at deciding how much information to reveal after they complete tests on the ability of banks to survive if governments default on their debts. The… Continue reading Stress Tests
Yahoo Tech Ticker – Niall Ferguson: A U.S. Debt Crisis Is On Its Way Ignore the uber-low yields on U.S. government debt. It’s only a matter of time before markets lose confidence in the U.S. government argues Harvard professor Niall Ferguson. Right now Washington is benefiting from global worries, such as those being seen in… Continue reading Scary Talk