By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
There’s a lot of talk flying around about the Japanese stimulus. Some appears to be misguided, some appears to be sensible.
Read more...This site refrains from talking about individual stocks, since we don’t give investment advice. However, a potential sea-change is underway, as a large portion of the inventory of foreclosed homes is being converted to rentals. Private equity firms are pursuing this opportunity eagerly, as the combination of low financing costs and tight rental markets in the US means that, at least on paper, investor believe they can earn attractive income, with potential for appreciation, either by eventually selling the houses to individuals or by taking the company public.
Given all the excitement over this conversion (it was voted the best opportunity over the next 12 months at a real estate conference I attended in the fall), it was interesting to detect a fair bit in the way of reservations in an article in the New York Times on the first IPO in this space, Silver Lake.
Read more...By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011)
In Germany, gold is now available from vending machines in airports and railway stations – Gold to Go. Shoppers can buy a 1 gram wafer of gold or a larger 10g bar. Seeking safety for their savings, individuals have purchased 150 tonnes of gold, mainly in the form of coins. Investors poured money into special funds (known as exchange traded funds (“ETFs”)) which pool investor monies to buy over 1,000 tones of gold.
Read more...At least in the US, a series of attention-getting stories, Sandy, then the elections, then the immediate roll right into fiscal cliff gamesmanship, followed by the Patreaus/Allen scandal, have made finance news seem comparatively dull, even though the stock market is in a swoon thanks to the engineered fiscal cliff nailbiter And Europe keeps looking more and more jaundiced by the day.
The Economist has taken note of the fact that the normally staid corporate bond market is looking a bit frothy.
Read more...Now even though, as Ben Walsh contends, market moves are often just noise, a downshift of over 2% in the S&P on the day after a Presidential election is being ascribed meaning by market touts, and therefore, by golly, it does mean something.
Read more...Earlier today, El-Erian in the Financial Times released a short and apt note on the limits of the central bank put.
Read more...Starting late last week, there’s been a marked shift in the mix of headlines in the major media outlets. While it may simply be post fall equinox moodiness or a confluence of downer reports leading to a rare moment of sobriety, suddenly the big venues are concerned about the economic outlook.
Read more...Obviously, it’s a little early to reach a verdict on QE3, but market pundit love reading the tea leaves early and often, so we figured we’d join the fun and look at early reactions.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
As you are surely aware by now, the US Federal Reserve has announced a new round of quantitative easing which like the ECB’s outright monetary transactions (OMT) is a new program of large scale asset purchases by a central bank. I thought I’d spend a bit of time today talking about these programs because once again I have noticed some large misconceptions in the media about what these operations are, and more importantly, what the likely outcome of them is.
Read more...It’s difficult to puzzle out what Bernanke thinks he is accomplishing with QE3. The level of bond buying, as various commentators have pointed out, is much lower than in the earlier QE programs. And pulling out bigger guns in the past was not terribly productive. As we wrote in April 2011 in a post titled “Mirabile Dictu! Economists Agree All the Fed Has Done is Goose Financial Markets!“:
Read more...By Paul Amery. Cross posted from Index Universe
The US equity market’s main risk measure is back down to the levels we saw in 2007. But declines in volatility mask substantially different behaviour from stocks than pre-crisis.
Read more...Cross posted from MacroBusiness
Exclusively from Michael Pettis’ newsletter:
While analysts are still arguing over whether or not growth in the first half of 2012 was lower than the already-low reported numbers (I think it was, and for reasons see Kate Mackenzie’s quick summary in the Financial Times), I expect, as I discussed in the previous issue of this newsletter, that over the next three months we will see a rebound in Chinese GDP growth as investment expands. The leadership transition, after all, is in October, and no one in power wants to see the ten-year period under the leadership of President Hu and Premier Wen end with an economic whimper, especially after the very distressing political scandals we have lived through this year.
I don’t think, however, that any rebound or recovery will last more than one or two quarters, and even then it is going to be a very tedious and lop-sided recovery.
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By Satyajit Das, a former banker and author of Extreme Money and Traders Guns & Money
Richard Duncan (2012) The New Depression: The Breakdown of the Paper Money Economy; John Wiley, Singapore
Simon Lack (2012) The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to be True; John Wiley & Sons, Inc, Hoboken NJ
Read more...The more news comes out, the more it looks like Mario Draghi’s pledge that the ECB would do all it would take to save the Euro was a bluff.
Read more...Nouriel Roubini, the dour seer who was early (too early in the minds of some) to warn of possible financial crisis prior to the Great Upheaval, has been more cautious in his calls since having ascended to official pundit status. Nevertheless, he’s been warning of a possible crisis in 2013 for some time and is not backing off from that call as the date approaches.
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