Posts filed under “Fixed Income/Interest Rates”

The U.S. Economy Upshifts

 

“Read narrowly, the results show that some survey data suggesting weak post-Thanksgiving Black Friday sales was misleading at best.” — New York Times

 

No, this isn’t going to be a victory lap about the National Retail Federation and its always-wrong forecasts about holiday retail sales (that annual chest-pounding comes in January). Rather, this is about the recent U.S. economic acceleration and what it might mean for the stock market, the Federal Reserve and bonds.

The combination of falling oil prices, increasing job availability and rising wages bodes well for retail sales. Perhaps more significantly, the economy is now showing unmistakable signs of acceleration. Following several years of subpar job creation, jobs are now being added at a robust pace. As we noted last week, the U.S. is adding an average of 241,000 jobs a month. That’s almost a 25 percent increase from 2013’s monthly average of 194,000.

Some of you will no doubt be compelled to note that any economic recovery is artificial, the result of the Fed’s bond-buying program of quantitative easing and its zero interest-rate policy. To which I say, you are in part right. But I am equally compelled to point out that many of these are the same folks who have been loudly complaining that QE and ZIRP weren’t working. Well, which is it? Is QE impotent or does it generate growth, albeit it artificial? Critics of the Fed can’t have it both ways.

Regardless, investors may want to consider the ramifications of accelerating  economic growth:

No. 1. Economic activity is uncorrelated with the stock market.

Continues here

 

 

Category: Economy, Federal Reserve, Fixed Income/Interest Rates, Investing

The Fed Spectrometer

  Federal Reserve Hawks vs Doves   click for ginormous infographic Source: Bloomberg Briefs   Text only version is here  

Category: Federal Reserve, Fixed Income/Interest Rates

Better Than All Weather Portfolio . . .

>   My Sunday Washington Post Business Section column is out. This morning, we take yet another at Tony Robbin’s All Weather Portfolio. The print version had the headline Why the all-weather portfolio is a wash-out while online, it was Better Than All Weather Portfolio. Rather than merely criticize Robbin’s 55% bond, 15% commodity portfolio, I…Read More

Category: Apprenticed Investor, Asset Allocation, Fixed Income/Interest Rates, Investing, Really, really bad calls

Muni Mania: A Timeline

Source: Bloomberg Briefs

Category: Credit, Fixed Income/Interest Rates, Markets, Really, really bad calls

Economics Indicators Dashboard

Here’s the monthly update from Russell:   click for interactive graphic Source: Russell Investments

Category: Consumer Spending, Data Analysis, Economy, Employment, Fixed Income/Interest Rates, Inflation, Markets

Fed Policy and Stock Outlook

Fascinating stuff here: The Easy Money’s Been Made: Fed Policy and Stock Outlook Source: Bloomberg Chart of the Day

Category: Federal Reserve, Fixed Income/Interest Rates, Markets

U.S. Debt Held by Foreigners Hits Record $6.07 Trillion

Posted without comment: Source: Real Time Economics

Category: Credit, Data Analysis, Economy, Fixed Income/Interest Rates, Taxes and Policy

Restoring Confidence in Reference Rates

Restoring Confidence in Reference Rates October 2, 2014 William C. Dudley, President and CEO, NY Fed Remarks at NYU Stern School of Business, New York City       Thank you for the opportunity to speak with you today.1 In my remarks today, I will focus on the development and use of reference rates for…Read More

Category: Federal Reserve, Fixed Income/Interest Rates, Think Tank

Bill Gross’s Farewell Letter to PIMCO

Bill Gross, founder of Pimco, and its chief investment officer for the past 40 or so years, resigned last week. Rumor has it that he was but two steps ahead of a mutinous gang, swords out, planning to make him walk the plank. Gross was too quick and before the mutineers could force him, he…Read More

Category: Corporate Management, Fixed Income/Interest Rates

Open Secret of Libor Manipulation

open secretOpen Secret: The Global Banking Conspiracy That Swindled Investors Out of Billions is the new book written by Erin Arvedlund.

The book goes behind the scenes of the elite firms that trafficked in LiBOR based products, including Barclays Capital, UBS, Rabobank, and Citigroup to show the negative impact they had on both ordinary investors and borrowers.

Erin’s claim to fame was a column she wrote in Barron’s in the early 2000s outing Bernie Madoff as a fraud. It was a national bestseller titled Too Good to Be True.

Here is Yahoo:

“LIBOR, the London Interbank Offered Rate, is a global benchmark for interest rates. It’s tied to everything from mortgage rates and student loan rates to complex financial derivatives. And guess what? For a very long time it was rigged.

Now, multiple lawsuits are pending, and that could mean some money back for some investors, traders and consumers.

LIBOR is set each day by a group of bankers, based on estimates of rates at which banks would expect to borrow money from each other. It’s a system built on trust, not math. Regulators were tipped off back in 2007 that banks were fixing rates, and by the summer of 2012, an ugly scandal was revealed. An estimated $300 trillion in financial securities worldwide are based on LIBOR.

Video after the jump . . .

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Category: Books, Fixed Income/Interest Rates, Legal