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Noteworthy News – January 5, 2015

Economy:

The $245,000 price tag for raising an American child, in 5 charts – VOX

Bank of England minutes to lift lid on global financial crisis – The Guardian

Nice work if you can get out: Why the rich now have less leisure than the poor – Economist

The End of Men – Atlantic

The Economics (and Nostalgia) of Dead Malls – New York Times

Thomas Piketty’s “Capital”, summarised in four paragraphs - Economist

Markets:

Wall Street Strategists Forecast More Stock Gains in 2015 – Wall Street Journal

Euro dives to nine-year low as U.S. dollar surges – Reuters

Identifying market faultlines for 2015 – Financial Times

Politics:

France’s 75% ‘supertax’ quietly dies with few mourners - Yahoo!

Ukraine to spend five percent of 2015 budget on defense and security – Reuters

What I want from our cities in 2015: a severe tax on empty homes – The Guardian

Social Programs That Work - New York Times

Banks:

Big banks in New York expect to continue struggling in 2015 - Daily News

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Posted in Economics, Markets, Media, Politics.


Noteworthy News – December 29, 2014

Economy:

The Economists Who Studied All-You-Can-Eat Buffets – Atlantic

Summers Sticks With Secular Stagnation Warning After Jobs Data – Bloomberg

The Booming Economy vs. The Struggling Middle Class – Brookings

Markets:

The baseball-card bubble – Economist

What Lies Behind the Plunge of the Ruble? – Economonitor

Politics:

Japan Approves $29 Billion Spending Package to Boost Economy – Bloomberg

Japanese firms to spurn PM’s call for higher wages next year: survey – Reuters

Twenty states will raise their minimum wage on Jan. 1 - Washington Post

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Posted in Economics, Markets, Media, Politics.


Noteworthy News – December 22, 2014

Economy:

Middle class woe – HarvardGazette

Global debt: How worried should we be? – BBC

Report: Billionaires are hoarding mountains of cash - UPI

Santa’s real workshop: the town in China that makes the world’s Christmas decorations – Guardian

Modern Moms Aren’t as Busy as 1960s Moms Were – Atlantic

Markets:

The Markets Are Predicting a Venezuelan Default – Bloomberg

Here’s why oil companies should be a lot more profitable than they are – Reuters

Bankers See $1 Trillion of Zombie Investments Stranded in the Oil Fields – Bloomberg

Politics:

Surprise! The Rich Are Now Richer Than Everyone Else By the Widest Margin Since We Started Keeping Track – Atlantic

That’s rich! Why so many wealthy Americans think they’re middle class - Salon

The week the dam broke in Russia and ended Putin’s dreams -Telegraph

Of Kiwis and Currencies: How a 2% Inflation Target Became Global Economic Gospel – New York Times

Banks:

A black hole for our best and brightest: Wall Street is expanding, and the economy is worse off for it – Washington Post

Big banks need to embrace digital era - Financial Times

How Wall Street is chipping away at reform – The Week

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Posted in Economics, Markets, Media, Politics.


Noteworthy News – December 15, 2014

Economy:

Employers Will Have to Raise Wages. They Just Don’t Know It Yet. – New York Times

The Vanishing Male Worker: How America Fell Behind – New York Times

Many Feel the American Dream Is Out of Reach – DealBook, NY Times

Global financial crisis patches are leaking - CBC News

Solid U.S. retail sales point to firming economic recovery - Reuters

Markets:

How Countries Around The World Are Coping With Falling Oil Prices - Huffington Post

A Greek island – yours for the price of a London flat - The Independent

Asian shares mixed on Chinese data – BBC

Politics:

The Case Against Eurozone QE - Forbes

Oil Prices Go Down, Russia’s Gold Buying Goes Up – NPR

Banks:

Eurozone bank integration: EU versus non-EU banks - VOX

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Posted in Economics, Markets, Media, Politics.


Three Charts to Challenge Investment Strategies

The rather amusing broadly cited economic fact is that US growth has become more robust and we should only expect a “tailwind” from lower gas prices that will put more dollars in the US consumers’ pockets.  I will not pontificate on how indications of job growth are impossible to explain, but instead point to three market facts that everyone seems to ignore.

1) Breakeven inflation rates have fallen dramatically since midsummer.  Economists still expect US inflation to come in near 2% in the coming years, but the market has quickly repriced and suggested that the 2 year inflation (deflationary) rate will be .45%!

Inflation

 

2) US Interest Rates actually look attractive versus alternatives.  Despite the Economists’ beliefs that the US 10 year will hit over 3% by the end of 2015, the market forward rate says that the 10 year will not reach 3% in 10 years!  More importantly, every German is thinking that US Bonds look incredibly attractive compared to their own securities:

Diverging Yields

 

3) Despite equity markets being extremely happy, the US High Yield market has been slaughtered over the last few months.  I guess you just need to believe that all fixed income markets are wrong and equities are right:

High Yield vs S&P 500

I believe the most realistic explanation is that US markets broadly believe that the Federal Reserve is planning on tightening when the economy will not be able to take the stress.  It is also telling you that the rising dollar and falling crude point towards the US importing deflationary conditions from struggling economies around the world.

Posted in Economics, Markets, Media.




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