As the usual end-of-year predictions roll in, perhaps the safest bet was captured this tweet from Bajaji Sridharan:
Since everyone is making predictions for 2012, here’s my prediction — 90%+ of all the 2012 predictions will be wrong.
Ask not what your monetary policy can do for you, but what you can do for your monetary policy. That’s the jist of a 1968 paper by Milton Friedman, the poster-child for monetarist economics, entitled “The Role of Monetary Policy,” whose key questions remain hotly debated more than four decades on. Friedman’s answer is simple (some might argue too simple), and all too familiar to those who read the speeches of present-day Federal Reserve hawks – focus on the only thing monetary policy can truly control, which in Frideman’s view is price stability.
By setting itself a steady course and keeping to it, the monetary authority could make a major contribution to promoting economic stability. By making that course one of steady but moderate growth in the quantity of money, it would make a major contribution to avoidance of either inflation or deflation of prices. […] That is the most that we can ask from monetary policy at our present stage of knowledge.
WASHINGTON (Reuters) – Banks tightened the screws on lending to major financial market participants in recent months, the U.S. Federal Reserve said on Thursday, reflecting concerns about Europe’s banking crisis.
The central bank’s survey of senior credit officers did not mention Europe directly, but indicated a “broad but moderate tightening of credit terms applicable to important classes of counterparties over the past three months.”
A new survey from job placement firm Challenger, Gray & Christmas offers good news and bad news for U.S. job seekers. While some Americans have become more optimistic about their employment prospects, others have grown even more frustrated at their inability to find work.
The results were based on a random sample of 600 callers to Challenger’s yearly job-search advice hotline. Here are some key findings:
7,231,514. That was the real number of Americans receiving jobless benefits on last count – not the 381,000 new weekly applications that made the headlines.
It’s always heartening to get good news on the job market. Still, it’s easy for fully employed Wall Street analysts to get carried away with optimism after relatively minor improvements in the data.
WASHINGTON (Reuters) – The U.S. Treasury again shied away from labeling China a currency manipulator on Tuesday, but it rapped the country for not moving quickly enough on exchange rate reforms.
The United States also chided Japan for stepping into the currency market to stem the yen’s rise, and urged South Korea to use such interventions sparingly.
WASHINGTON (Reuters) – The U.S. Treasury said on Tuesday China was not manipulating its currency but rapped the country for not moving fast enough on exchange rate reforms.
Some U.S. politicians have argued that China has gained an unfair competitive edge in global markets by keeping the yuan artificially low to boost exports.
As 2011 draws to an unspectacular close, U.S. economic data are sending thoroughly mixed messages about the near-term path of the recovery. That’s not particularly reassuring given the still enormous risks emanating from Europe – but it’s better than the unequivocal weakness that prevailed during the first half of the year.
Consumer confidence offered some reassurance, jumping to an eight-month high in December and showing other encouraging signs as well as Eric Green of TD Securities explains:
Anemic economic growth in the United States has sparked fears the country was entering a Japan-style “lost decade.” The comparison also has implications for government bond markets. Some traders see the U.S. Treasury market’s new, lower-yielding structure as eerily reminiscent of trading patterns seen in JGBs (Japanese government bonds). Says George Goncalves at Nomura:
There has been much debate since the start of the ’08 credit crisis over whether the US is turning into Japan and if so how to trade it. We have spent a fair deal of time over the last two years developing a framework for how US rates investors can leverage these insights to “Trading USTs like JGBs.” […] One thing is clear: momentum trading starts to wane and narrower ranges will become the norm in a low yielding world with the Fed on perma hold meanwhile a lack of alternative fixed income products is still forcing investors to buy USTs.
U.S. poverty is becoming increasingly concentrated both geographically and racially, according to a new study from the Federal Reserve Bank of Cleveland. The authors find that while the poverty rate has moved up and down in a relatively narrow range over the last 40 years, mostly mirroring the ups and downs of the economy, that a deeper look at the data reveals some disturbing trends.
The data we have examined indicate that the share of Americans living in high-poverty neighborhoods increased between 1970 and 2000. And we have found that an individual’s poverty status or race is highly predictive of the neighborhood poverty rate they will experience.