Salient to Investors: 48 of 49 economists predict the FOMC will buy Treasuries to increase its program to buy $40 billion in mortgage bonds each month, and expect the Fed to wait until its March 19-20 meeting before adopting thresholds on unemployment and inflation.The median economist expects Fed purchases at least through Q1 2014. Economists expect a
READ MORE... →Salient to Investors: Stephen King at HSBC said inflation is not the central banks’ highest priority, and as long as people believe they are committed over the longer term to price stability, there is leeway to play for other objectives. HSBC said the MSCI All Country World Index will return 9 percent in 2013 on aggressive
READ MORE... →Salient to Investors: Paul Krogman writes: The American economy is by most measures deeply depressed. Corporate profits are at a record high because capital is grabbing an ever-larger slice at labor’s expense. The wage gap between those with a college education and those without grew a lot in the 1980s and early 1990s but hasn’t
READ MORE... →Salient to Investors: Robert Frank at Cornell University writes: For his cameo appearance in the movie “Analyze This”, Warner Brothers ended up paying Tony Bennett $200,000 instead of the $15,000 they first offered because they did not make their offer at the outset when they would have had much more leverage. computer with bad credit Republicans
READ MORE... →Salient to Investors: Roberto Padovani at Votorantim CTVM said services inflation will keep running at close to 8 percent for the coming year, but sees the economy moving above capacity by the end of 2013, triggering a rate hike in 2013. Brasil will reduce electricity rates in 2013, which will have a deflationary impact of
READ MORE... →Salient to Investors: Bill Gross at Pimco said: Interest rates are so low and corporate spreads so tight that you have to be leery of prices going the other way. Structural headwinds may reduce real GDP below 2 percent in the US and other developed nations. With globalization, technological and demographic changes
READ MORE... →Salient to Investors: Chad Stone at Center on Budget and Policy Priorities said the fiscal cliff conjures up Wile E. Coyote, but said “fiscal slope” is more acurate as the effects would accumulate gradually during 2013. Neil Dutta at Renaissance Macro Research said those who argue that it’s a fiscal slope are ignoring the psychological impact on business and understates the
READ MORE... →Salient to Investors: Austerity policies are self-defeating because they cripple growth and reduce tax revenues. Cutting government spending causes output to fall, tax revenues to fall, and benefit spending to rise, ending almost invariably in slower growth or recession, and high budget deficits. The proper reaction to a negative external shock is to loosen fiscal policy,
READ MORE... →Salient to Investors: Peter Bofinger at University of Wuerzburg said: Germany would be the biggest loser in a euro breakup. Germany’s national obsession with austerity stems from a misreading of Germany’s recent history. Germans rarely acknowledge how they have benefited from the euro with lower exchange rates and record-low interest rates – the benefit of
READ MORE... →Salient to Investors: Bradley Belt and Jared Bernstein at Milken Institute, William Gale at Brookings, Phillip Swagel at Milken Institute and University of Maryland say: Avoiding the fiscal cliff may be beyond the strained US political system – even kicking the can down the road requires one side to give ground on a core belief. Let all tax cuts
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