Bill Gross thinks conditions are ripe for a liquidity crisis, and he points a finger at his old firm for its potential to be at the center of the storm.» Read More
If Friday’s 3.1 percent read on fourth-quarter GDP let you a little queasy, you may want to get the antacids ready for the year ahead.
Consider the stock market to be a triple bacon cheeseburger with extra cheese, extra bacon and extra special sauce, complete with a super-sized order of fries on the side: A delicious meal, to be sure, but hell on the arteries and waistline.
Then consider investors to be the customers at our little fast-food bistro. They know coming here to eat could be extremely hazardous to their health, but they just can’t resist the lip-smacking gastronomic goodies being whipped up in the kitchen, which we’ll call the QE Cucina.
This is the market of guilty pleasures, where the only fear is that the lard, butter and deep fat fryers will be replaced someday with soybeans, broccoli and woks. As long as the goodies are being served up—in Wall Street’s case the liquidity provided from the Federal Reserve amid a backdrop of tepid improvement in some aspects of the economy—the lines at the restaurant will remain long and the food continue to be served.
Wells Fargo—easily the most secretive US bank—wants my cell phone number.
Top hedge fund managers are eager to bid on subprime-mortgage bonds that once threatened to wipe out AIG and are now held by the Federal Reserve.
“Champing at the bit,” is how one hedge fund trader who invests in distressed debt put it.
The Wall Street Journal reported Friday that the Fed had tapped asset management firm BlackRock to help sell off portions of the $30 billion Maiden Lane II portfolio, which is made up of bonds and derivatives acquired when the government bailed out American International Group.
Unrest continues in Middle East and North Africa. NATO will be enforcing the no-fly zone and picking up responsibility. [WSJ]
Nuclear reactor core may have been breached [Bloomberg]
Irish banks might need another $39 billion [Bloomberg]
"S&P Warns About 'Excessive' Bank Dividends" [CNBC.com via New York Times]
Economic data today includes GDP and consumer sentiment index [CNBC.com via Reuters]
The Concord Coalition is pointing out that Paul Ryan , the new chairman of the House Budget Committee, faces a daunting task. He wants to preserve his party’s prohibition against tax hikes—while also producing a budget that reduces the budget deficit more than the Obama administration's plan.
Liberals, of course, don’t think it’s possible to be a hawk on tax cuts and a hawk on budget deficits. Ezra Klein is already forecasting that Ryan will have to either use wishful thinking or vagueness to escape the dilemma.
Fortunately for Ryan, he doesn’t need either. He just needs to look at the NetNet version of the federal budget.
Back in November, we figured out how to reduce the budget deficit all the way to zero —without raising taxes or touching Social Security. In fact, we over-achieved, resulting in a slight surplus. You can check out exactly how we did it by clicking through to the New York Times interactive feature we used as our baseline.
In many ways, this could be a huge political winner for the Republicans. Obama has shown his willingness to spend money to take sides in the Libyan civil war—something Republicans could easily run against. Our budget took an axe to military spending and space research to achieve a savings of $349 billion.
Remember when this whole Libya thing was going to be a "no fly zone?" Yep. We were lied into war. Again. (Washington Examiner)
Good news. He's now going to hold a quarterly press conference. (FederalReserve.gov)
Reading Victor: "One raises the razor blade and puts some lather on the face and checks the prices at 7am and notes many markets near local extremes including stocks, fixed income, oil and the beard is still there, as well as the shaving cream." Your guess is as good as mine. (Daily Speculations)
Silver soaring to another multi-decade high, where do we go from here? Nobody really knows but what I do know… is that it won't stay here. Why?
Because there is just no financial basis for the price of silver to be at $38 an ounce and there is no real trading history on which to gauge strength and resistance.
Nobel Prize-winning economist Robert Shiller says that his key valuation indicator is flashing warning signs.
The Fed is in the early stages of an analysis on changes in bond market liquidity, amid signs that liquidity may be less resilient than in past.
Janus Capital acquired a majority interest in Kapstream Capital and said Kapstream's Palghat will support Bill Gross as co-portfolio manager of the Janus Global Unconstrained Bond strategy.