Are central banks throwing a progressive party?
You know, the kind of party where folks travel from house to house feasting and drinking and enjoying the proffered hospitality. For years pundits have speculated about what will happen to the U.S. stock market party when the spiked punch bowl of quantitative easing is gone. Last week, they got an unexpected answer: Come on over to Japan’s house. (more…)
If you’re familiar with fairy tales, you’ve probably encountered a story or two that involves the granting of wishes. Usually, these are cautionary tales. Well, there was some wishing going on around the globe last week and, if the wishes come true, the outcomes may be less beneficial than anticipated. (more…)
What do Harry S. Truman and Hindu goddesses have in common? Both were invoked to describe the U.S Federal Reserve Chairwoman Janet Yellen’s speech at the Jackson Hole Economic Policy Symposium last week. (more…)
If you’re feeling whiplashed from the mid-week collision of good and bad economic news, you’re not alone. (more…)
The third quarter of 2013 held plenty of mayhem and emotion. It began with an overthrow of Egypt’s democratically-elected government and ended with the United States government at risk of defaulting on Treasury and government obligations. In between:
Baseball great Yogi Berra once said, “In theory there is no difference between theory and practice. In practice there is.” He may have been on to something.
Last May, Fed Chairman Ben Bernanke introduced the idea the Fed’s economic stimulus program, known as Quantitative Easing (QE), might be ratcheted down sooner rather than later. The concept, that easy money – the Fed has injected about $2.75 trillion into financial markets during the past five years – could soon be behind us, threw global markets into a tizzy. (more…)
“So much depends upon, a red wheelbarrow, glazed with rainwater, beside the white chickens.”
Well, the U.S. Federal Reserve’s monetary policy is a lot more complex than the simple tools mentioned in the oft-memorised William Carlos Williams’ poem, The Red Wheelbarrow, but an awful lot is depending on it. In some of those countries that have been affected negatively by changing expectations about quantitative easing, the importance of chickens, wheelbarrows, and other basic tools to a family’s economic well-being has not been forgotten.
The Bank of England put its neck out and did a fair imitation of the U.S. Federal Reserve last week when it offered forward guidance tying tighter monetary policy to unemployment levels.
If it’s not stocks, it’s bonds!
In a turnaround worthy of Bruce Willis in a ‘Die Hard’ movie, expectations for second quarter’s corporate earnings growth soared from below expectations, on average, in the previous week to beating expectations last week. Earnings growth estimates shot up to 4.1 percent which was a significant change from last week’s 2.8 percent. Of the companies that have reported so far, more than one-half have performed better than expected – an improvement on the last four quarters’ performance.
QE or not QE …. Make up your mind?
Last week, investors and traders obsessed about the U.S. Federal Reserve (Fed) and the possibility it might begin to end its quantitative easing (QE) program. The Fed began its first round of quantitative easing during the financial crisis in an effort to prop up the American economy. In general, quantitative easing helps increase money supply and promote lending and liquidity. Investors’ fears about what may happen when the program ends were apparent when, despite abundant positive economic news, major world stock markets lost value last week.
