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Don’t Get Too Excited, U.S. / German 10 Year Spread Likely Stuck in Range

July 6, 2017

Bloomberg – ECB Discussed Removing Easing Bias on Bond-Buying Program Officials said communication on QE could be revisited later European Central Bank policy makers considered removing a pledge to increase their bond-buying program if needed when they met last month. As the likelihood of calls for unconventional policy measures to be stepped up had “clearly diminished,”… Continue reading Don’t Get Too Excited, U.S. / German 10 Year Spread Likely Stuck in Range

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Volvo Wants To Compete With Tesla By Dropping Gas Engines

July 6, 2017

Bloomberg.com – Volvo Vaults to Volts, Planning to Pull Plug on Gasoline Engines Swedish carmaker’s new models all electrified starting 2019 Tighter emissions rules spur longer ranges, cooler designs As it turns out, news of the death of the internal combustion engine may not be very exaggerated after all. On Wednesday, Volvo Car Group said it expects to… Continue reading Volvo Wants To Compete With Tesla By Dropping Gas Engines

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Maybe The Illinois Debt Crisis Is NOT Over

July 6, 2017

Crain’s Chicago Business – Greg Hinz: Moody’s throws curveball into state budget debate Moody’s Investor’s Service has thrown a bit of a curveball into efforts to pass the first state budget in three years, suggesting that Illinois still might hit junk level despite an income tax hike that’s part of the deal.  As Illinois House… Continue reading Maybe The Illinois Debt Crisis Is NOT Over

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The Relationship Between Jobs & Commodity Prices

July 6, 2017

Bloomberg.com – Why More Jobs Means Lower Commodity Prices The reasons? For one, economic growth and technological advancements lead to efficiency. At first glance, it would seem logical to assume that as the U.S. employment rate increases, so too would the price of global commodities. This conclusion rests on the premise that working citizens have greater… Continue reading The Relationship Between Jobs & Commodity Prices

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Searching For Signs Of Recession

July 6, 2017

The Wall Street Journal – Greg Ip: Why Soaring Assets and Low Unemployment Mean It’s Time to Start Worrying If you drew up a list of preconditions for recession, it would include the following: a labor market at full strength, frothy asset prices, tightening central banks, and a pervasive sense of calm. In other words, it would look a lot like the present. Those of us… Continue reading Searching For Signs Of Recession

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The Fed Set To Officially Announce Plan To Shrink Balance Sheet

July 6, 2017

The Wall Street Journal – Fed Officials Ready to Start Shrinking Portfolio in Months June meeting minutes show officials expect their balance-sheet reduction plans to have a limited impact on markets Federal Reserve officials in June readied plans to start slowly shrinking the central bank’s large portfolio of bonds and other assets in the next few… Continue reading The Fed Set To Officially Announce Plan To Shrink Balance Sheet

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Can The Bond Market Pick Up Where The Fed Left Off?

July 6, 2017

The 10-year yield is lower today than it was eight years ago, even though the federal funds rate is a full percentage point higher. MarketWatch – Caroline Baum: Opinion: No, the Fed and bond market aren’t interchangeable ll it took was a modest rise in long-term Treasury yields, part of a global bond market sell-off last week, to… Continue reading Can The Bond Market Pick Up Where The Fed Left Off?

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The ECB May Have No Choice But To Taper As It Hits QE Limits

July 6, 2017

The Financial Times – QE is approaching its Germany limit It’s not a question of opting for taper. The ECB has had no choice but to taper. As Sphia Salim, Ruairi Hourihane and Erjon Satko at BoAML outline on Wednesday, the ECB will need to lower purchases to $40bn per month from January 2018, while also… Continue reading The ECB May Have No Choice But To Taper As It Hits QE Limits

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Looking For The Next Minsky Moment

July 6, 2017

Bloomberg.com – Keep Eye on Sovereign Debt for Next Minsky Moment The recent turmoil in bonds offers a good example of what’s to come as the global economy recovers and central bankers curb stimulus. In his theory on financial markets’ fragility and instability, the late Hyman Minsky argued that “from time to time, capitalist economies exhibit… Continue reading Looking For The Next Minsky Moment

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The Robots Are ‘Slowly’ Taking Over

July 6, 2017

Bloomberg.com – Why the Robot Takeover of the Economy Is Proceeding Slowly Productivity in the U.S. rose only 1.1 percent last year and rather than being replaced by technology, more workers are being hired. Employers have added an average 159,000 new jobs a month so far in this expansion compared with 99,000 in the previous… Continue reading The Robots Are ‘Slowly’ Taking Over

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Cartoons

July 6, 2017

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Fed Policy Not the Instigator of Volatility, Watch Inflation and Econ Data

July 5, 2017

The Wall Street Journal – Does a 263% Profit Mean Markets Are Efficient? Unusually volatile reaction of investors to last week’s news about monetary policy is alarming in itself Last Thursday shouldn’t merit being on the list. Central bankers kind of maybe indicated that just possibly they might do what they previously said they would do,… Continue reading Fed Policy Not the Instigator of Volatility, Watch Inflation and Econ Data