risk

I believe policy makers at the the Federal Reserve have soured on the marginal effectiveness of quantitative easing as a primary tool for monetary policy. As interest rate policy is still not effective with the policy rate at zero, forward…

Here is an observation. The last couple of years show some interesting similarities to the period ending in early 2005. The reason for such a comparison is that then, just as now the Fed began to gradually exit its highly accommodative…

Here is further evidence that in this environment treasuries are driving "risk asset" valuations. Corporate HY bond spreads are now positively correlated to treasury yields. That's quite unusual because traditionally when treasury yields…

The latest Fed confab at Jackson Hole is demonstrating that central bankers were so keen to avoid taking much blame for the global financial crisis that they also failed to learn critical lessons from it. That lapse in turn is directly…

One often hears the refrain "the market is not the economy", but what does that really mean? I am going to explain it in my terms here in the context of the global reflation trade - EM meltdown paradox.

I have been fairly sanguine about some of the market turbulence in 2013. From the fiscal cliff to the sequester to the Japan rate rise to the Fed tapering, I haven't seen a trigger for wholesale risk repricing. I want to flag student loans…

Floating emerging markets currencies have been under tremendous pressure over the past month, as active investors move out. Slowing growth, political instability, and weaker demand for natural resources have all contributed to the sharp…

I have two topics I want to highlight this morning. First, there are the US housing inflation numbers from Case Shiller, which are at a 7-year high. Then there is the fiscal drag in the US, Denmark, the UK, the Euro Zone and Canada. What I…

Retail savers in the US are abandoning certificates of deposits (CDs). The amount of CDs outstanding that are $100K or smaller has been on a sharp decline since the recession and is now at the lowest level since the Fed began keeping track…

As Merrill's junk bond index yield crossed the historical low of 5% on Thursday, some senior Fed officials are clearly becoming uneasy. Corporate credit markets are entering bubble territory (see discussion) and up until recently very…