Salient to Investors: William Pesek writes: Asians Indonesians, Malaysians, South Koreans and Thais have not gotten over Larry Summers’ role in forcing austerity measures on governments in the late 1990s. Asians were puzzled by the 1999 Time magazine cover heralding Summers, Greenspan and Rubin as “The Committee to Save the World” for their free-market solutions to
READ MORE... →Salient to Investors: 50% of surveyed economists say non-performing local-government and corporate debt will significantly impact China’s credit and economic growth, and expect China to deal with bad loans at local governments in the next 18 months by expanding the muni-bond market and letting localities refinance with direct bond sales. JPMorgan
READ MORE... →Salient to Investors: James A. Kostohryz writes: Stock valuations are currently within or even slightly above a broad range that could be considered “normal” and not at bubble levels, but unprecedented levels of excess liquidity, declining liquidity preference, and a number of fundamental, technical and psychological indicators strongly indicate a bubble is forming. Probabilities favor
READ MORE... →Salient to Investors: James Bullard at FRB of St. Louis said the Fed should wait for evidence the labor market and economy are strengthening before tapering purchases. Bullard said the Fed will probably hold mortgage-backed securities among its assets longer than it had expected and make a decision on what to
READ MORE... →Salient to Investors: William Pesek writes: Asia sits on almost $7 trillion in currency reserves, much of it in dollars as its central banks engaged in a kind of financial arms race after a 1997 crisis. Asia now has more weapons against market unrest than it knows what to do with
READ MORE... →Salient to Investors: Lawrence Summers’ current and previous work as a paid consultant to financial firms helped make him a wealthy man between the time he left government service in 2001 and when he returned in 2009. When Clinton nominated him to be Treasury Secretary, he listed assets of $900,000 and debts of $500,000, but
READ MORE... →Salient to Investors: Caroline Baum writes: Obama’s proposal to cut the corporate tax rate in exchange for new spending on education, training and infrastructure is a non-starter. 50 percent of economists say the Fed will taper in September but if economic conditions change, the Fed’s actions will change with them.
READ MORE... →Salient to Investors: Money managers are betting that bond funds that are unconstrained by duration, strategy or region will attract money as interest rates rise and investors shift assets from traditional fixed-income offerings, which are limited in how they can react to falling bond markets. Unconstrained funds generally can increase in value
READ MORE... →Salient to Investors: Companies lacking pricing power have helped hold the inflation rate below the Fed’s 2 percent target for 14 straight months. Michael Hanson at Bank of America said economists and policy makers don’t see much evidence that pricing power’s going to return quickly or that inflation is going to
READ MORE... →Salient to Investors: Vincent Reinhart at Morgan Stanley said investors are the little white lab rabbits in the central bank experiments. Gilles Moec at Deutsche Bank said the potential for the dialog between the central banks and the market to fail is significant. Nathan Sheets et al at Citigroup said the UK
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