“Studies show that the poorest people in the most-free societies are 10 times better off than the poorest in the least-free.”
But less equal, so you can have more equality through bigger government…by making the country poorer, as Erik Rosenkranz explains.
“Federal Reserve large scale asset purchases significantly influenced international bond yields.” ~ St. Louis Fed (PDF)
More and more research shows the importance of productivity growth in forecasting exchange rates ~ OECD data
Capital flows often pour in as “surges” and “bonanzas” and subsequently escape in “sudden stops” (IMF 2011a; Forbes and Warnock, 2011).
Net Capital Flows 1995 ~ twitter
Research says capital bond flows from the EPFR corporate bond data can be used as a proxy for balance of payments data, reducing lag from up to six months from one. ~ EPFR
Argentina prior to hyperinflation: Rodriguez’ regression study shows that every 1% of primary deficit was financed with 0.7% creating money
- “When the stock of debt gets out of hand relative to reserves, pressure mounts against the currency and devaluation follows.”
Declines in Youth populations associated with recessions, says $study ~ HBR
Bruno Iksil sold so many CDS contracts on a European corporate bond index that it cost much less to buy the index, short individual contracts, allowing hedge funds like Saba Capital to profit at JP Morgan’s expense.
“We’re seeing clearer signs of diminishing returns from success of quantitative-easing programs” Robert Rennie, Westpac
Alan Meltzer notes every CEO is taught to project cash flows, adding that it’s impossible it is to predict healthcare, tax, and regulatory costs
Avg. hourly earnings sinking ~ Bloomberg
The time series certainly appears mean reverting and perhaps poised to bounce if so. Note that wage inflation lags actual inflation, as people demand higher wages to compensate for rising prices, creating a feedback loop
“Banks shower loans on junk rated companies” 4/30/2012 ~@WSJ
Of course, this has nothing to do with @federalreserve mispricing risk
Charles G. Koch: Corporate Cronyism Harms America ~ WSJ
Jeff Gunlach is bearish on the U.S. ~ businessinsider
“Raw food product accounts for only 14% of the average total price on the shelves, according to the USDA, “so even if all commodity prices doubled, retail food prices would increase by about 14%,”
There’s a bubble in farmland thanks to the @federalreserve cheap money and it’s drive to force people out of cash into hard assets, less they lose purchasing power. The USDA predicts food price inflation to be 3.5% in 2013.
“Countries of the European Union have pledged to make up capital loss of the European Central Bank, which comes from tax revenues.” ~ John Cochrane
Carry trades had returned almost 80 percent from March 2009 through July last year
Approx. Drop in FX reserves as a percentage of GDP: Ireland 100%; Portugal 60%; France 30%; Australia 25%; India and Indonesia 10%
Difference between spot rate and forward rate tells you the number of Central Bank Rate cuts priced in; next 3 monhts, China -10bps; KRW -30bps; INR -20BPS ~ Bloomberg
Japanese banks are highly exposed to a spike in interest rates; regional banks the weakest, says IMF. A 100bps rise would generate 20% M-to-M losses in Tier 1 Capital
Japanese bank claims on the public sector doubled since 2007 to above 90% of GDP in 2010, four times Italy
Japan’s July current account surplus falls 40.6 pct ~ Globaltimes.cn
Rumours swirl as China’s Xi Jingping vanishes ~ FT– recently cancelled meetings with Clinton, Russia
Sun Kai properties, Wheelock, and New World Development last year sold dollar-denominated bonds, exposing themselves to Chinese Yuan weakness/U.S. Dollar appreciation
It recently cost more to lock in Chinese interest rates for one year than it does for 5 year, according to interest rate swaps, hinting at credit crunch.
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