HEDGED.BIZ

A look at economics, markets, finance and the irrational human being

Why The Fed May Not Be Able To Credibly Raise Rates

At the Humphrey Hawkins last night, the Fed Chair, Janet Yellen signaled flexibility on interest rates neither committing to be patient nor being more hawkish in the face of stronger labour market data.   The Fed has signaled that it is ready to raise rates this year as the US economy has shown strength and
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Ten Seconds Into Darkness. 2015 02.

Equity and bond markets have been behaving well these past few years. Despite a slowdown in returns and a few wobbles towards the year end, 2014 was a fairly good year for investors. The MSCI World Index returned 4.8% while the Barclays Global Bond Index returned 3.8%. Clever positioning would have earned the average investor
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The Economy's Natural Growth Rate. Never Knew No Miracle Of Policy That Didn't Go From A Blessing To A Curse. Never Knew No Monetary Solution. That Didn't End Up As Something Worse.

The economy has a natural rhythm, a natural metabolism, a natural rate of growth. These growth rates are determined broadly by the endowments of natural resources and the people, how many there are, how quickly they grow, their age distribution, and their intellect and enterprise, and the tools which were made by these people to
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Greek Default 2015. Possibilities.

What is the situation in Greece? · Government finances have been improving during the austerity measures,  the current account is now in surplus, the budget in primary surplus and economic growth has recovered, however, unemployment has risen sharply to 26%. · Syriza has chosen a far right nationalist party, the Independent Greeks as their coalition
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Negative Bond Yields and Interest Rates. Neither A Borrower Nor A Lender Be. And Now We Are Both…

“Neither a borrower nor a lender be; For loan oft loses both itself and friend, and negative yields dulls the edge of policy.” Now many countries are both. 10 year Swiss and German government bonds currently carry a negative yield. When one moves to shorter maturities, such as 2 years, we find that France, Germany,
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