Big Money Bets on a Housing Rebound – New York Times 12-08-12

Salient to Investors: Knowledgeable, cash-rich investors are leaping headlong into buying houses. Private-equity giants and hedge funds have spent billions of dollars on thousands of foreclosed single-family homes. Jade Rahmani at Keefe Bruyette & Woods said they have raised as much as $8 billion to invest The Blackstone Group has spent more than $1

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The Next Move for the Fed – New York Times 12-08-12

Salient to Investors: Operation Twist is scheduled to end soon – Capital Economics said the Fed doesn’t have any more short-term Treasury securities to sell, at least not with maturities of less than three years. Kathy Jones at the Schwab Center for Financial Research said the bond market can count on the Fed to hold

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Gross May Shift Pimco to Lower Risk Profile in 2013: Tom Keene – Bloomberg 12-07-12

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

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Bernanke Cliff Analogy Overstates Immediate Economic Harm – Bloomberg 12-07-12

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

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It’s Official: Austerity Economics Doesn’t Work – The New Yorker – 12-07-12

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,

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Lone German Keynesian Advocates Pooling Euro Debt – Bloomberg 12-06-12

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

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Let’s All Jump Off the Fiscal Cliff – Bloomberg 12-06-12

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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