Tim Duy’s Fed Watch – Taking Stock I am not convinced that the Phillips curve is dead. I am convinced that the Fed has repeatedly killed expansions in recent years before inflationary pressures emerge. In other words, the Fed has not allowed the economy to hold in a full employment situation for a length… Continue reading A Defense Of The Phillips Curve
CNBC – The ‘second-most’ important job at the Fed will soon be vacant. Here’s who may get it * New York Fed President William Dudley is stepping down, likely by next summer. * Dudley’s replacement will assume the critical responsibilities of supervising New York banks and selling assets as the Fed looks to unwind its balance… Continue reading Who Replaces Dudley?
Bloomberg – Powell Wants to Change How the Fed Communicates Fed chair nominee sees shortcomings in Fed ‘dot plot’ outlook Changes could help smooth relations with Republican lawmakers Federal Reserve Chair nominee Jerome Powell has likened central bank communication to a popular Far Side cartoon: A man chides his dog Ginger about rooting through the trash,… Continue reading Changing Fed Talk!
The Financial Times – S&P says Venezuela is in default on sovereign debt Rating agency confirms failure to make $200m in bond coupon payments within grace period Standard & Poor’s has declared that Venezuela is in default after it missed two interest payments and following a meeting in Caracas that left investors with little notion of… Continue reading Venezuela Defaults
MarketWatch – Caroline Baum: Bonds are from Venus; stocks are from Mars Wild optimism fuels big gains in equities, but fixed-income isn’t impressed If it were to continue, “it could become an issue going forward as the high-yield market is joined at the hip with the stock market,” says Jim Bianco, president of Bianco Research. On Venus,… Continue reading Bonds On Venus
The Financial Times – Pool of negative yielding debt swells to nearly $11tn Nearly $11tn of sovereign and corporate bonds trade with a yield below zero, according to data from Bloomberg Barclays Indices. The $10.9tn figure includes notes and bonds in the benchmark global aggregate index as well as Bloomberg Barclays’ US, Euro, UK and Japanese… Continue reading Negative Debt
The Financial Times – Martin Wolf: Unusual times call for unusual strategies from central banks The most heated objections have been to quantitative easing. At the outset, critics complained it would lead to hyperinflation. When this failed to occur, they just condemned it as somehow unnatural. But use of the central banks’ balance sheet is a… Continue reading Central Banks’ Unconventional Policy
The dollar rally carried treasury yields, financials and materials higher. Failed tax reform could reverse these moves.
As Q3 earnings season comes to a close, we take stock of the results.
We provide a road-map of the likely benefactors in the event volatility rises.
The Financial Times – Martin Wolf: We’re in bubble territory again, but this time might be different Returns for investors are modest and could be negative over lengthy periods Assets are indeed expensive by historical standards. Consider stocks. The Nobel-Laureate, Robert Shiller, developed the cyclically-adjusted price/earnings ratio, the so-called CAPE, to assess whether stocks are… Continue reading Bubbles Everywhere