Finance & Markets Channel: Latest Posts
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Finance & Markets
Understanding the Fed’s swap line
In a speech last week on “Policy Coordination Among Central Banks”, Ben Bernanke, US Federal Reserve chairman, drew attention to the way that the Fed’s swap line with other central banks has been used to facilitate lender of last resort funding for dollar-denominated assets held outside the US.
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The Wilder View
The next shoe to drop in the labor market: the insurance industry
Asset managers, brokers, investment bankers, analysts and insurers alike will see massive job cuts into 2009. From Bloomberg:
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Emerging Markets
A new architecture for global financial regulation
At the G20 summit in Washington this month, it was agreed that global growth will require sound new global regulation of financial markets. But what would it take to achieve such regulation?
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Finance & Markets
Geithner to Become Treasury Secretary
Oh dear. As reader Marshall said, “Well, it’s not Summers…it’s even worse.”I had really hoped for Volcker. That would have been 1000 points on the Dow, and more important, he is the only one I can think of who has the stature to negotiate with our friendly foreign funding sources about the future of the dollar. I have it from someone supposedly very well plugged in that he was offered the job and the Obama crowd was trying to persuade him to take it for a year. -
Finance & Markets
The 401k Bust
For years, I referred to the investment bubble of the 1990’s as the DotCom Bubble and the bubble from 2003 – 2007 as the Real Estate Bubble. The entire time, overlooking the most obvious fact of what it really was…
This was the 401k bubble.
The DotCom/RealEstate bubbles were just merely the places that the 401k bubble landed!
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Finance & Markets
A Chapter For Detroit To Open
The Big Three U.S. automakers need more than an injection of $25 billion from the federal government. Because of their ongoing losses, they would burn through that money in less than a year and would soon be back for more.
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The Wilder View
The deflation threat is extremely small
Bloomberg published article today that suggests deflation is a real threat to the U.S. economy. In my opinion, deflation is not going to be a real threat until falling prices become embedded into expectations. However, there is a growing risk that the current credit crisis contracts the money supply enough to drive prices downward over a period of many consecutive months, resulting in negative inflation expectations. But that outcome has a low probability. From Bloomberg:
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Emerging Markets
Regulation should be international
In their expansive communiqué on the global financial crisis last weekend, the Group of 20 leaders bemoaned the pro-cylicality of financial regulation caused by lax regulators, inattentive rating agencies and greedy financial institutions. Curiously absent, however, is a candid acknowledgement of politicians’ central contribution to the mix. That is most unfortunate. Finding ways to insulate financial regulation from political meddling is critical to creating a more robust global financial system in the future.
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Finance & Markets
Interesting, If Not Lucrative
Where to start? The newsflow over the past twenty four hours has been very interesting indeed, as has the price action. Not that it’s been a particularly lucrative twenty four hours….despite trying to rise above the noise, Macro Man has managed to top and tail himself a couple of times. Fun, fun, fun…..or B.
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Finance & Markets
Paulson abandons TARP asset purchase and risky assets plummets
If you are wondering why the stock market has been declining, you only need to flip your TV to C-SPAN and see Hank Paulson explaining why he has abandoned his original plan to save America from depression. Basically, Paulson has done a complete 180 and now refuses to invest a dime of the TARP (Troubled Asset Relief Program) in buying the troubled assets for which the program was named. The result: those assets have cratered, pulling down many shares with them.
