This is how beggar-thy-neighbor monetary policies work, and perhaps why they ultimately fail.» Read More
I've never brought a guest such an elaborate breakfast- but when legendary investor Jim Rogers wants to come on my show- I go all out. Truth be told, it wasn't entirely Suzy Anchorwoman of me—it was secretly a good jumping off point for his favorite topic these days- inflation.
“Have you tried to buy any cotton recently? Have you tried to buy any sugar recently?" he said pointing down to the spread in front of him.
Co-hosting with me this morning on “Worldwide Exchange” over a breakfast of Diet Coke, candy and bagels, CEO of Rogers Holdings Jim Rogers was as usual all about commodities as an inflation hedge: the sugar he adores along with gold and silver.
Brian Carney, my brother and the editor of the Wall Street Journal Europe’s editorial page, explains what’s wrong with the hounding of WikiLeaks founder Julian Assange.
There’s an old adage: you can fool some of the people some of the time, but economists are foolish people most of the time.
Economists at Deutsche Bank prompted us to recall this bit of wisdom today when they raised their projections for GDP growth next year from 3.3 percent to 4.1 percent. Their reason for the raise was that the tax deal agreed in Washington, DC last night promises a payroll tax holiday. Their basic reasoning seems straight forward enough—if you increase the amount of money that shows up in the paychecks of workers, they’ll go out and spend most of that money, which will help the economy grow.
Unfortunately, it’s not so simple. In fact, temporary tax relief tends not to increase consumer spending by very much. What’s more, tax relief that comes in the form of a temporary payroll tax cut is even less likely to stimulate spending.
But first let’s give the Deutsche Bankers their due. As you’ll see, they have lots of math on their side.
It's time to bid au revoir to another idealistic European fiction .
Banks in euro zone countries have not been required to hold back any capital as a hedge against bonds issued by the governments of euro zone nations.
But reality has intervened. First Greece, then Ireland, received massive bailout packages. The danger of imminent sovereign default was real. The notion that such instruments could be treated as "risk-free" proved to be a fantasy.
"Risk Free" may have been a lovely idea. Like a world without war. Or the dissolution of national borders, as a grand utopian marketplace sprung forth from the soil that had hosted some the 20th Century's worst nightmares.
It didn't work out that way. A unified monetary policy simply did not accord with the radically different fiscal policies of the EU's member states. Historically divergent worldviews, rooted in cultural traditions of long-standing, could not be reconciled with academic theories of postmodern multiculturalism.
In a month that was supposed to be one of the toughest for hedge funds, Pershing Square Capital Management reportedly saw a 12.2 percent net gain—and a 15 percent gain before fees.
This capped off a stellar year for the hedge fund, which is run by Bill Ackman. It is reportedly up 35.5 percent before fees for the year. The returns were first reported by Bess Levin of DealBreaker, a site that frequently posts hedge fund returns.
(Full disclosure: I was the editor-in-chief of DealBreaker from early 2006 until 2008, when I handed over the reins to Levin, who had been my colleague there since mid-2006 and remains a personal friend.)
In the post-Madoff era, those kind of returns will—and should—prompt skepticism. How could Ackman produce those kind of gains?
This question sent a website called Insider Monkey digging into the SEC filings. What it found is an example of the value and dangers of investigating the returns of hedge funds.
This morning Julian Assange turned himself into authorities in London after a warrant for his arrest was issued. A judge reportedly refused to grant him bail—which means he will remain in custody until his trial.
WikiLeaks has indicated that it will continue to operate as usual, despite the arrest of its founder.
What’s far more troubling than the arrest of Assange—which arises from very weird allegations that seems to involve sexual encounters with two women—is what appears to be a covert war against WikiLeaks.
In the course of a very short timespan, WikiLeaks lost access to Amazon, Paypal, Visa and Mastercard. Its account with a Swedish bank was frozen. In short, its access to financial transactions—including donations from outside supporters—that it uses to finance its operations is being shut down.
If the next WikiLeaks target is Bank of America , the information could come from a hard-drive of a top Merrill Lynch executive.
Could the huge cache of documents WikiLeaks founder Julian Assange says he has obtained from a hard drive at one of America’s biggest banks reveal fraudulent lending at Countrywide Financial?
A year ago, Assange mentioned that he had five gigs of documents on Bank of America. So when he revealed that one of the next “megaleaks” from his organization would be about a big American bank, pretty much everyone concluded that he was talking about Bank of America.
Bank of America issued an poorly thought out non-denial, protesting that it had no proof of Assange’s claim to have a hard drive and that Assange hadn’t named the bank in his latest statement.
The holiday shopping season seems to be ringing in stronger this year. Although not the at pre-recession levels, consumers are opening their wallets a little bit more and November retail sales showed that strength.
Now the question is—will the consumer carry that momentum throughout the whole holiday shopping season? To get further color on luxury side of the industry I spoke with Steve Sadove, Chairman and CEO of Saks .
This is how beggar-thy-neighbor monetary policies work, and perhaps why they ultimately fail.
UBS has reacted to the financial market turbulence by freezing salaries for its investment bankers until at least mid year. The FT reports.
Janet Yellen is expected to attempt to balance raising interest rates against the risks of a weaker global economy.