Dow Ends Year of Tumult up 6%

Wall Street Journal
Dow Ends Year of Tumult up 6%

U.S. Stocks Hit 5-Month High

Wall Street Journal
Stocks Hit 5-Month High in Year-End Rebound

European Disunion

Wall Street Journal
Ties That Bound Europe Now Fraying

Euro Zone Fiscal Governance Advances

Wall Street Journal
Euro Zone Crisis on Ice

Stocks Off Highs After Report on EU Ratings

Wall Street Journal
Stocks Off Highs After Report on EU Ratings

Central Banks Take Coordinated Action

Wall Street Journal
Central Banks Move to Calm Fears

Fiscal Integration in the Euro Zone

Wall Street Journal
Euro Zone Weighs Plan to Speed Fiscal Integration

U.S. Retail Sales

Wall Street Journal
Rising Sales Brighten Growth Forecasts

Markets Take Mid Week Plunge

Wall Street Journal
Banks Color the Day in Red

Financing Markets Tighten Spigots

Wall Street Journal, November 8, 2011
Financing Markets Tighten Spigots

Doubt, Debt and the Euro Zone

Wall Street Journal
Doubt, Debt and the Euro Zone

Markets Gain on Events in Europe

Wall Street Journal, November 3, 2011
Stocks Climb

U.S. Economic Growth Accelerates

Wall Street Journal
U.S. Economic Growth Accelerates

Home Lending Revamp Planned

Wall Street Journal, October 24, 2011
Home Lending Revamp Planned

Debt Crisis Overshadows Brighter Data

Wall Street Journal

Debt Crisis Overshadows Brighter Data

China's Economic Growth Slows

Wall Street Journal
China's Economic Growth Slows

China Inflation Slows Minimally

Wall Street Journal
China Inflation Slows Minimally

Treasurys Sink on Profit-Taking

Wall Street Journal, October 5, 2011
Treasurys Sink on Profit-Taking

German Vote Bolsters Rescue

Wall Street Journal
German Vote Bolsters Rescue

The European Financial Stability Fund

The European Financial Stability Fund, designed in May of 2010 to provide aid for Greece, is seeking ways to allow for more flexible borrowing. The fund currently has a 250 billion euro lending capacity but the expansion would increase that capacity to 440 billion euros.

Further expansions to bank recapitalization funds, secondary market trading capabilities, and credit line availability are also being considered. These expansion considerations are expected to provide economic stimulus for the Eurozone; however, the implementation of these expansions is being stalled by the negating effects of a lowered vehicle credit rating.

For additional information on the European Financial Stability Fund please refer to Wikipedia's entry on the European Financial Stability Facility.

Wall Street Journal
The Debate: Seeking Ways to Boost Firepower of Europe's Bailout Fund

Dow Sinks 6.4% for Week

Wall Street Journal, September 23, 2011
Dow Sinks 6.4% for Week

Fed Launches New Stimulus

Wall Street Journal, September 22, 2011
Fed Launches New Stimulus

Dow Gains 4.7% in Week

Wall Street Journal, September 16, 2011
Dow Gains 4.7% in Week

Third Quarter 2011

The Wall Street Journal outlines five factors impacting stock performance this month. They include:

1) The Economy
2) Earnings
3) The Federal Reserve
4) Europe
5) Politics

The third quarter saw a digression in growth for the U.S. economy as debt ceiling debates waged in Washington and the U.S. debt rating was downgraded. Increased unemployment rates and decreased hourly wages added further drag on the economic outlook for the fourth quarter.

Positive gains in corporate earnings resulting from the Federal Reserve's QE2 program were overcast by the debt ceiling debates and the U.S. debt rating downgrade. Corporatations will continue to benefit from the lower borrowing rates they experienced in the first half of the year but digression in U.S. economic growth is bound to push earnings expectations down.

The Federal Reserve's next move is likely to focus on long-term debt maturity holdings which will influence long-term debt market rates. Debt issues in Europe also continue to add risk to international exposure.

Wall Street Journal, September 6, 2011
Five Threats to Stocks This Month

Fed Weighed Asset Purchases at August Meeting

Wall Street Journal, August 30, 2011
Fed Weighed Asset Purchases at August Meeting

Bernanke Gives No New Signs on Fed Move

Wall Street Journal, August 26, 2011
Bernanke Gives No New Signs on Fed Move

Euro-Zone Private Sector Stays Weak as Germany Cools

Wall Street Journal, August 24, 2011
Euro-Zone Private Sector Stays Weak as Germany Cools

Europe's Debt Crisis

Wall Street Journal, August 18, 2011
Fed Eyes European Banks

Perry Says He's Running for President

Wall Street Journal, August 13, 2011
Perry Says He's Running for President

Markets Sink Then Soar After Fed Speaks

Wall Street Journal, August 10, 2011
Markets Sink Then Soar After Fed Speaks

Rating Downgrade Causes Market Volatility

The Dow Jones Industrial Average fell 634.76 points on Monday to end the day at 10809.85. The decline resulted in a one day loss of 5.5%. Equity markets in Asia, South Korea, Japan, Hong Kong, and Australia all trended downward as well.

The Monday decline follows the Friday announcement by Standard and Poor's to downgrade the U.S.'s credit rating. The rating was lowered from AAA to AA+. The downgrade reflects the urgency for congressional officials to focus on a long-term plan for fiscal stabilization. 

Wall Street Journal, August 9, 2011
Markets Open Higher After Wild Drop
Downgrade Ignites a Global Selloff

Leaders Agree on Debt Deal

Wall Street Journal, August 1, 2011
Leaders Agree on Debt Deal

Debt-Crisis Vote Goes Down to Wire in House

Wall Street Journal, July 28, 2011
Debt-Crisis Vote Goes Down to Wire in House

Up Week for U.S. Markets

Wall Street Journal, July 23, 2011
Up Week Ends on a Downer

Obama Backs Latest Bargain

Wall Street Journal, July 20, 2011
Obama Backs Latest Bargain

'Stress Tests' Fail to Ease Pressure on Euro

On May 1 the euro reached its peak for the year based on euro to dollar conversions, buying 1.483 USD. Since May it has begun a slow decent following news of Portugal’s aid request and Greece’s debt restructuring. Recent news of only eight reported banks failing the 90 bank stress test conducted by the European Banking Authority gave the euro a boost to begin the week. However, further details from the test and Greek’s debt restructuring uncertainty are likely to continue the downward trend, pushing the euro to near the 1.36 USD mark.

Wall Street Journal, July 18, 2011

'Stress Tests' Fail to Ease Pressure on Euro

Bernanke Remarks Boost Dollar

The dollar gained on Thursday following Federal Reserve Chairman Ben Bernanke’s statements that the Federal Reserve is not likely to enter into a third round of quantitative easing. An agreement in Washington between Republicans and Democrats for spending cuts amounting to $1.5 billion also boosted the dollar and gained positive momentum for debt-ceiling talks.

Wall Street Journal, July 14, 2011
Bernanke Remarks Boost Dollar

Dow Down on Europe Debt Worries

Economic woes in the U.S. and Europe’s debt contagion have negatively affected U.S. markets this week. The Standard & Poor's 500 stock index fell 24.32 points, or 1.8%, on Monday and fell again Tuesday to finish at 1313.64. The two-day decrease brought the year-to-date total return to 5.53% ending Tuesday.

Wall Street Journal, July 12, 2011
Dow Down on Europe Debt Worries

Movement in Budget Impasse

Social Security and taxes will be at the forefront of government discussions over a deficit deal as Congress continues seeking a proposal that will allow the U.S. government to meet its August 2 deadline for repayment of debt obligations.

Taxes have been the greatest 'stumbling block' keeping government discussions from formalizing a deficit deal. As the article states, "Until now, Republicans have rejected any tax increases, while Democrats have insisted on including some."

Compromise is likely to occur in the coming weeks as Congress seeks to develop a long-term plan that will fuel further economic recovery.

Wall Street Journal, July 7, 2011
Movement in Budget Impasse

A Quantitative Assessment

The QE2 program ends today after eight months and $600 billion in treasury bond purchases. Following the program, mortgage rates remain at all-time lows, corporate borrowing rates have decreased, and U.S. stock markets have reacted positively. Based on these measurements the program was successful, however U.S. fiscal debt debates and debt worries in Europe may interfere with the program’s long-term success.

Wall Street Journal, June 30, 2011
A Quantitative Assessment of QE2

Obama Joins Debt Talks

President Obama’s focus in the U.S. debt debate will be an end to tax breaks for wealthy income taxpayers. The president’s tax break focus would have the greatest impact on corporate-jet owners, hedge-fund managers, and oil companies.

Wall Street Journal, June 25, 2011
Obama Targets Tax Breaks

Federal Reserve Policy Meeting Recap

Following a two day policy meeting the Federal Reserve announced no change in the discount rate and an expected ending to their QE2 bond buying program. The Federal Reserve also revised down U.S. economic growth rates as noted below:

The economy is now expected to expand at a rate of around 2.7% to 2.9% this year and 3.3% to 3.7% in 2012. That is below estimates given after the last meeting in April for growth of 3.1% to 3.3% in 2011 and 3.5% to 4.2% next year.

Ben Bernanke also held his second press conference today recapping the two day meeting. Of note, it seems deflation risks have become less of a factor following the QE2 bond buying program. Core inflation projections for 2011 can be found below:

The 2011 projection for underlying inflation—stripping out volatile food and energy costs—was raised to between 1.5% and 1.8% from April's forecast of 1.3% to 1.6%.

Wall Street Journal, June 22, 2011
Fed on Hold Amid Slow Recovery

U.S. Stocks Rise on Hopes for Greece

Wall Street Journal, June 21, 2011
U.S. Stocks Rise on Hopes for Greece

Europe Wrangles Over Greece

Wall Street Journal, June 20, 2011
Europe Wrangles Over Greece

Greek Debt Concerns Further Weaken the Euro

Wall Street Journal, June 16, 2011
Extreme Bets Versus Euro Rise

Prices Fall for Mortgage-Backed Securities

Wall Street Journal, June 13, 2011
Subprime Debt's Siren Call

Euro Falls Dollar Gains

Wall Street Journal, June 11, 2011
Euro Drops Below $1.44

OPEC Output

Wall Street Journal, June 8, 2011
OPEC Nations Spar Over Output

Effects of Dodd-Frank on the Derivatives Market

Wall Street Journal, June 7, 2011
Unease Over Dodd-Frank Grows

Oil Falls Below $100 a Barrell

Wall Street Journal, June 6, 2011

Oil Falls Below $100 a Barrell

Banks May Need More Capital

Wall Street Journal, June 4, 2011

Banks May Need More Capital

Romney Announces Presidential Campaign

Wall Street Journal, June 3, 2011

Romney Blasts Obama Over Economy

Stocks Root for a Greek Debt Deal

Wall Street Journal, June 1, 2011
Stocks Root for a Greek Debt Deal

U.S. Growth Slowdown a Concern

Wall Street Journal, May 31, 2011

Economists Downgrade Prospects for Growth

Memorial Day

Wall Street Journal, May 30, 2011
Obama Marks Memorial Day at Arlington National Cemetary

Debt Ceiling Debates

Wall Street Journal, May 29, 2011

Mitch McConnell (R., Ky.): Medicare Overhaul Must Be Part of Debt Ceiling Deal

2012 Election Candidates

Wall Street Journal, May 28, 2011
Prominent Names Dip Toes in 2012 Race

Greece Ends Week in Tough Spot

Speculations in May 2010 projecting that Greek debt obligations would exceed the aid provided by the IMF-EU bailout fund by 2011 are proving true. This week ends a tough week for Greece as the country has rattled markets again with the possibility of bond defaults.

Greece’s greatest ally in its debt crisis has been the IMF, who led the structuring of the bailout agreement for Greece a year ago. Aid under threat from the IMF is a result of a potential debt restructuring which would ask bondholders to wait for their debt payments. Should Greece postpone those debt repayments, those bonds would become ineligible as collateral at the European Central Bank making its loan commitments insufficient for the IMF aid contribution on June 29.

Greece finds itself in a tough spot as it will be difficult for the country to raise additional capital from already distressed Eurozone countries who are weary to provide further investment. Next week’s review of Greece’s fiscal situation by the IMF, ECB, and participating Eurozone countries will determine the remaining aid program payments for the Eurozone country.

Wall Street Journal, May 27, 2011

Greece Aid Is Under Threat, Europe Finance Chief Says

Euro Falls on Debt Concerns in Greece

Debt concerns in Greece caused the euro to fall against most currencies yesterday. Specifically against the dollar, the euro traded at $1.4084 late Wednesday and is expected to continue hovering around the $1.40 mark.

Wall Street Journal, May 26, 2011

Greece Worries Damp Euro

New Phase in Greek Debt Crisis

Wall Street Journal, May 25, 2011
Europe's Split on Debt Crisis Hardens

Eurozone Debt Market Distress

Eurozone debt market distress carried over into equity markets pushing stocks down on Monday.

Wall Street Journal, May 24, 2011
Europe Sinks Markets

Debt Concerns in Italy and Belgium Cause Further Distress in the Eurozone

Wall Street Journal, May 23, 2011
Debt Fears Roil European Markets

The 2012 Republican Race

New York Times, May 22, 2011
Former Restaurant Executive Enters 2012 Republican Race

Greek Bonds

New York Times, May 21, 2011
A Downgrade by Fitch Leads to a Decline in Greek Bonds

World Oil Production

New York Times, May 20, 2011
Energy Agency Calls for Rise in World Oil Output

Greek Debt Restructuring

Wall Street Journal, May 19, 2011
Top European Bank Officials Urge Greece to Perservere on Fiscal Overhauls

Investment-Grade Bond Offerings

Wall Street Journal, May 18, 2011
Companies Rush to Borrow

Greek Debt

Wall Street Journal, May 17, 2011
Europe Ministers Wrestle Over Aid

U.S. Government Debt

Wall Street Journal, May 16, 2011
U.S. Acts to Keep From Going Over Debt Ceiling

Oil and Gas Drilling in the U.S.

New York Times, May 15, 2011
Obama Shifts to Speed Oil and Gas Drilling in U.S.

Treasury Prices Rise on Inflation Data

Wall Street Journal, May 14, 2011
Treasury Prices Rise on Inflation Data

U.S. Trade Deficit Data

Wall Street Journal, May 11, 2011
U.S. Trade Gap Widens

Greece Not Out of the Woods Yet

Wall Street Journal, May 10, 2011
Greek Woes Fuel Fresh Fears

10-Year Treasury Yields

The yield on the 10-year Treasury note has fallen to 3.16% but is expected to see gains following the Federal Reserve’s exit from the Treasury market in June.

Wall Street Journal, May 9, 2011

A 'Buy' Sign for Treasurys

Euro Wavers

New York Times, May 8, 2011
Greek Leader Irked by Speculation on Debt

Greek Debt

New York Times, May 7, 2011
Ministers Meet to Study Fixes on Greek Debt

Commodity Prices

Oil closed at its lowest price since mid-March yesterday, finishing the day at $99.80 a barrel.

Wall Street Journal, May 6, 2011

Commodity Prices Plunge

Debt Ceiling Debates

The GOP is calling for strict spending cuts to be put in place before agreeing to an increase in the debt ceiling. Their focus will likely be on decreased spending for defense programs and regulatory agencies as well as farm subsidies, food stamps, federal employee retirement, student loans and housing subsidies. Democrats would also like to see increased tax reforms in addition to decreased government spending.

Wall Street Journal, May 5, 2011

GOP, White House Talk Deal on Debt

Portugal to Receive $116 Billion from the EU and IMF

Portugal agreed to deal terms that would provide 78 billion euros in financing over three years from the European Union and International Monetary Fund. Stipulations include a required 2011 budget deficit of 5.9% of GDP. 

Wall Street Journal, May 4, 2011
Portugal Reaches Deal on Bailout

Treasury Prices

Treasury prices have increased this week following global current events and the Federal Reserve’s purchase of $7.24 billion in Treasurys with maturities between May 15, 2018 and Feb. 15, 2021.

Wall Street Journal, May 3, 2011
Treasury Prices Rise on Economic Anxiety

President Barack Obama Addresses the Nation

Wall Street Journal, May 2, 2011
President Barack Obama's Speech to the Nation

2012 Election Candidates

John Huntsman of Utah seems to be the leading Republican prospect for the 2012 presidential election. Other possible candidates include Mitch Daniels of Indiana, Sarah Palin, former governor of Alaska, Gov. Chris Christie of New Jersey, Gov. Rick Perry of Texas and Representative Paul D. Ryan of Wisconsin, the chairman of the Budget Committee.

New York Times, May 1, 2011
Republicans Are Pursuing a Wider Field for 2012 Race

Congress to Debate on Oil and Gas Tax Subsidies

President Obama is seeking a repeal of tax incentives for oil and gas producers in the U.S. Revenue from the repealed tax subsidies would likely be spent to fund clean energy research which would provide for less expensive fuel alternatives.

New York Times, April 30, 2011
Gas Prices Spur Sound and Fury in Washington

Oil Prices and Winter Weather Slow U.S. Economic Growth

Domestic economic output grew at an annual rate of 1.8% in the first quarter of 2011 after expanding at a rate of 3.1% in the previous quarter. The slower growth was attributed to higher oil prices and winter weather.

Higher oil prices led to decreased profits for businesses and less discretionary income for consumers. Winter weather also took its toll by closing many businesses and delaying construction on new homes.

New York Times, April 29, 2011

U.S. Economy Grew 1.8% in First Quarter

Oil and Gas Prices Continue to Rise

Commodity prices, particularly oil and gasoline, have shown significant increases year-to-date. These prices will continue to be closely watched as the Federal Reserve enters their final phase of bond-buying. Following the end of the program in June, the focus is expected to turn to a debate on the federal funds rate, which has remained at 0 - 0.25% since December 2008.

Wall Street Journal, April 28, 2011
Crude-Oil, Gasoline Prices Climb

U.S. FOMC Meeting Focuses on Inflation

The Federal Reserve announced it would continue its bond buying program through June as scheduled. The inflation outlook is not expected to warrant an increase in interest rates immediately following the end of QE2. However, commodity prices have steadily been pushing higher and the Fed raised their inflation forecast from 1.3% to 1.7% in 2011. The Fed did not foreshadow the economy reaching its expected inflation rate of 2% until as late as 2013 which would probably not call for a raise in the interest rate in the near future. The Federal Reserve's next scheduled FOMC meeting will be in July.

Wall Street Journal, Wednesday, April 27, 2011
Fed Signals Intent to Complete Bond Buying

Watch Ben Bernanke's FOMC press conference:
Fed Chairman Ben Bernanke's FOMC Press Conference

Treasury Market Awaits Federal Reserve Announcements

Treasury trading volume was significantly lower on Monday as investors awaited announcements by the Federal Reserve on policy decisions.

Closing Treasury yields on Monday were the following:

1-year note 0.206%

3-year note 1.119%

5-year note 2.069%

10-year note 3.365%

30-year note 4.456%

Tuesday, April 26, 2011

Treasurys Rise in Quiet Before Bernanke

Wall Street Journal Markets Data

Quantitative Easing

The Federal Reserve will meet on Tuesday and Wednesday of this week. The spotlight will be on QE2 and the Fed is expected to announce continuance of its bond-buying program through June.

Monday, April 25, 2011
Fed Searches for Next Step

U.S. Energy Prices

President Obama's focus was on gas prices today in his weekly radio address. High gas prices have affected inflation and President Obama says he wants to eliminate tax subsidies to gas companies to ease the burden on U.S. consumers.

New York Times, April 23, 2011
The Politics and Government Blog of The Times: Weekly Address

Dollar Weakens

It is no surprise that the dollar weakened this week against its basket of currencies in the ICE Index. Relief for the U.S. will not come until the budget debate is under wraps and the debt ceiling is decided on.

Concurrently, Europe and the euro continue to strengthen. The ECB’s announcement of an increase in rates has added momentum for the region. Additionally, the Eurozone’s control of Greece, Ireland, and Portugal, all under the care of the EU – IMF aid fund, has calmed the zone’s worries of a widespread contagion.

Wall Street Journal, April 22, 2011

Dollar Tumbles to Precrisis Levels

The Housing Market

Housing market prices fell in March. The median price decreased to $159,600, which was down 6% from a year earlier.

Wall Street Journal, April 21, 2011
Existing-Home Sales Tick Up, but Prices Slip

Treasury Yields

Standard and Poor's outlook on U.S. government debt pushed the yield on the 10-year treasury note to 3.354%. Yields on the 30-year note moved to 4.436% and the two-year note yielded 0.653%.

Wall Street Journal, April 20, 2011
A Silver Lining to S&P's Cloud

A Closer Look at U.S. Federal Debt and the Debt Limit

The U.S. federal debt limit was last increased to $14.294 trillion on February 12, 2010. That federal debt limit is expected to be exceeded by mid-May to June and the 2011 ending estimated debt is $15.476 trillion. Federal debt ending 2010 was $13.5 trillion with $4.5 trillion held by government accounts and $9.0 trillion held by the public.

Analytical perspectives from the White House’s Office of Management and Budget website provide further breakdown on U.S. federal borrowing.

Wall Street Journal, April 19, 2011

S&P Cuts U.S. Ratings Outlook to Negative

Rating Agency Changes Outlook on U.S. Debt

Stocks fell following Standard and Poor's announcement of a change in outlook on U.S. government debt. Falling 1.1%, the need for budget cuts and resolution on the debt ceiling was factored in.

Wall Street Journal, April 18, 2011
Release: S&P Cuts U.S. Ratings Outlook to Negative

U.S. Budget Debate

The debate over the U.S. budget will have an impact on the 2012 election. Democratic and Republican party values will be significantly brought to light. Two areas of focus during the debate will be Medicare and Social Security.

New York Times, April 17, 2011
The Budget Debate, Revealed

Consumer Prices and Inflation

The Consumer Price Index increased 0.5% in March pushed up mostly by food and energy prices. The core index, excluding food and energy, increased only 0.1%.

Food costs increased 0.8 percent in March and gasoline rose 5.6 percent in March.

New York Times, April 16, 2011
U.S. Consumer Prices Up 0.5%, Pushed Mainly by Food and Gas

2011 U.S. Budget Bill Approved

The U.S. bill designed to cut $38 billion in spending for the remainder of 2011 was approved by Congress yesterday. The bill is a step toward reining in the federal budget. The U.S.’s next focus will be on next year’s federal budget plan and will have to involve a vote on raising the federal debt limit. Without debt restructuring or a raise in the debt ceiling the U.S. will default on federal debt payments by mid-May.

New York Times, April 15, 2011

Congress Passes Budget Bill but Some in GOP Balk

Germany Calls for Greater Austerity Measures in the Eurozone

Germany has led the way for austerity measures in the Eurozone since Greece requested bailout in May 2010. Their measures do not differ much from the political debates in most countries and call for decreases in spending and benefits as well as an increase in taxes and greater enforcement of tax evasion.

Germany will likely continue to push for increased austerity in the Eurozone and specifically for Greece, Ireland, and Portugal as these measures have already been factored into the aid agreements for these three countries.

New York Times, April 15, 2011

Resentment Is Rising In Euro Zone

Budget Deficit Plan and the Federal Borrowing Limit

President Obama laid out a budget plan that would cut federal deficits by $4 trillion over four years. In his speech, budget cuts that would pave the way for an increase in the federal borrowing limit were also announced. The federal borrowing limit will be a focus of debates over the next few months as the U.S. is expected to reach its limit by May 16. A decision on the ceiling is expected by June and maneuvers could be used to delay defaults until July.

Wall Street Journal, April 14, 2011
Obama Stokes Deficit Fight

REITs Remain Marketable

Nine new REITs have been developed for the market this year. These developed securities show that demand still remains for packaged mortgage securities depsite the credit and liquidity failures that were caused by sub-prime mortgages in 2008.

Wall Street Journal, April 13, 2011
Mortgage REITs on a Tear As High Yields Fuel Demand

Europe and the U.S.

The U.S. is not facing the same inflation pressures as Europe. Commodity prices are on the watch list but Janet Yellen calls the Fed's current bond-buying program the "appropriate" solution for the U.S. 

Wall Street Journal, April 12, 2011
Fed Plays Down Inflation
Inflation Concerns Weigh on Treasurys

Dollar Weakens

The dollar weakened against it's basket of currencies last week following the US government's affliction over budget cuts and a looming resolution needed on the federal borrowing limit.

The Federal Reserve's quantitative easing and the decision on the federal borrowing limit are likely to direct the movement of the US dollar over the next few months.

Wall Street Journal, April, 11, 2011
Dollar Still in a Downdraft

Government Borrowing Limits

Done with the $38 billion budget cut, next on the government’s agenda will be increasing the federal borrowing limit. Money owed to Social Security comprises the majority of the federal debt, which ended September 2010 at $13.5 trillion. As the government is on track to exceed the current limit of $14.25 trillion by mid-May, debt will either have to be restructured or the federal debt limit increased.

Increasing the federal debt limit would call for another round of budget cuts which is not going to be easy as hurdles to the debt-limit increase are likely to be the same as in the $38 billion budget cut and include the Democrats demand for Planned Parenthood funding and John Boehner and the Republicans stance on health care, the environment, and abortion rights.

Gene Sperling has been the lead administrator for the government’s strategy on the debt-limit debate. A debate which will be battling through Congress this month and has the potential to be a “recovery-ending event,” as quoted by Ben Bernanke in Calme’s New York Times article.

New York Times, April 10, 2011
Next on Agenda for Washington: Fight Over Debt

Government Shutdown is Averted

Political opposition showed in Congress as the government passed an eleventh hour bill that would cut $38 billion from the federal budget for the remaining months of this year. In his first month in the position, Speaker of the House, John Boehner was unrelenting in his Republican stance on the need to decrease funding to Planned Parenthood programs. However, in the last leg of the discussion, President Obama overruled in the debate and funding to family planning programs remained unchanged as the Democratic Party remained loyal to their support for the programs.

New York Times, April 9, 2011
Budget Deal to Cut $38 Billion Averts Shutdown

Europe's Risks and the Euro

Portugal's request for bailout caused little disruption to financial markets. The euro gained following the expected announcement and speculators see Portugal as the final country in the region to require aid.

The European Commission Bank also signaled an easing of the region's risks this week. The bank's relaxed risk outlook for Spain and control over the fiscal situation in Portugal led to an increase in interest rates and an end to expansion of bailout mechanisms for the ESF and EFSF funds.

Spain and Italy, two periphery countries on the bailout watch list, have both shown positive improvements in recent weeks as their yield curves decoupled with 10-year bond yields falling to more normal rates nearing 5.0% and 3.25% respectively. 

Wall Street Journal, April 8, 2011
No Time for Euro Complacency

Portugal Third Country to Receive Eurozone Bailout

Portugal is the third, and hopefully final, country in the Eurozone to request aid for debt repayments coming due in June. Over the course of a year the Eurozone and its allies have structured funds to provide relief to Eurozone countries unable to make debt repayments.

Initial aid required by Greece was called upon in May 2010 and since then additional structured funding created by the European Central Bank and the IMF has relaxed the risk outlook for the region. Consent by the ECB and IMF to structure available funding for countries in need of a bailout has likely stopped a widespread contagion in the region as debt is highly interconnected within the seventeen member zone.

Wall Street Journal, April 7, 2011
Portugal Pleads for Rescue

Europe and the U.S.

Interest rate policy, open market operations or bond-buying, and bank reserve requirements are three weapons central banks can use when making strategic monetary policy decisions.

In Blackstone’s Wall Street Journal article he contrasts the use of these instruments by the ECB and the US Federal Reserve as well as other central banks such as China, Japan, and England.

The European Central Bank is likely to be the first central bank to raise interest rates since the 2008 Credit Crisis. Moving rates higher would signal that the country’s capital growth is expanding.

The US Federal Reserve currently remains in a period of quantitative easing which calls for government bond-buying through June 2011.

Wall Street Journal, April 6, 2011
Central Banks Grapple With Competing Forces

Housing's Toll on Inflation Measures

Housing or shelter costs make up a large part of the Consumer Price Index (CPI), accounting for 32% of headline CPI. The Federal Reserve's more favorable price index, the Personal Consumption Expenditures (PCE), weights housing at 15%.

Rising housing costs, including rent and mortgage payments, are expected to rise through 2011 adding pressure on the Federal Reserve to increase rates to manage rising inflation expectations.

Wall Street Journal, April 5, 2011
Housing Bubble Continues to Haunt Fed

Euro Gains

The euro appears to be gaining despite Eurozone debt woes over the last year. The ECB is expected to raise rates signifying a strengthened economic outlook in Europe.

Wall Street Journal, April 4, 2011
Euro Gives Back Gains on Dollar

China's Communist Government

China is happy with the status quo and the economy has seen tremendous gains over the last decade as a result. Entrepreneurs have prospered and living standards have improved. Under the current rule the country is expected to continue as a leader in the emerging markets.

New York Times, April 3, 2011
In China 'Jasmine' Means Tea, Not a Revolt

Portugal Scrambles to Avoid Bailout

Portugal sold 1.65 billion euros ($2.3 billion) of short-term government debt in hopes of raising funds to payoff debt repayments coming due in April and June. Rating agencies reacted negatively to the offering downgrading the country's debt rating shortly after the auction.

The offering is likely to be the last effort by Portugal to avoid a bailout request which would also require implementation of strict austerity measures.

New York Times, April 2, 2011
Portugal Stages Surprise Bond Auction; Ireland Is Hit With New Downgrade

Ireland's Bailout Woes Continue

Ireland was the second Euro-zone country to request bailout from the EFSF. Ireland's request came in November 2010 following Greece in May 2010. Recent stress tests for the country have revealed further capital shortfalls of 24 billion euros. The gap is likely to call for nationalization of the country's six largest banks which would allow for government aid but turn the burden to taxpayers. Rating agencies have reacted negatively to the stress test results, exemplified by an S&P downgrade to Ireland's sovereign debt from single A minus to triple B plus.

Wall Street Journal, April 1, 2011
Ireland's Never-Ending Stress Test
Ireland's Banks Get Failing Grades
S&P Downgrades Ireland One Notch
Ailing Ireland Accepts Bailout

Irish Bank Nationalization

Wall Street Journal, March 31, 2011
Irish Banks Move Toward Nationalization

Mortgage Lending Regulations

Securitization of mortgages and other loans by US banks was a catalyst for the 2008 credit crisis. Subprime loan securities were innovative and compelling but the lack of credit risk modeling and regulation lead to a nationwide bank failure. The Dodd-Frank financial overhaul law addresses the lack of regulation in this area by imposing a 5% credit risk requirement on banks for securitized mortgages and loans. Additional regulation on down payment requirements and mortgage ratings are likely to follow.

Wall Street Journal, March 30, 2011
Regulators Unveil Mortgage-Lending Rules

Sovereign Debt Downgraded in Portugal and Greece

Wall Street Journal, March 29, 2011
S&P Downgrades Portugal, Greece

Socrates to Continue as Prime Minister of Portugal

Huffington Post, March 28, 2011
Uncertainty hastens Portugal's financial tailspin

Wall Street Journal, March 27, 2011

Portugal's Socrates Re-elected Party Leader

Turmoil in Syria and Jordan

New York Times, March 27, 2011

Tension and Grief in Syria After Protests and Deadly Reprisals

Unrest in Syria and Jordan Poses New Test for U.S. Policy

Home Sales

New York Times, March 26, 2011
A Housing Market Cycle Different From Others

Federal Reserve Press Conference Schedule

Wall Street Journal, March 25, 2011
Bernanke to Speak Out More to Explain, Bolster Policy

Eurozone Debt Crisis

Wall Street Journal, March 24, 2011
New Phase in Europe Crisis

Aftermaths from the 2008 Credit Crisis Continue

Aftermaths from the 2008 Credit Crisis still continue to surface within the U.S financial system. Liz Rappaport, from the Wall Street Journal reports in her article, “Banks Hit for Credit Union Ills” on five wholesale credit unions backed by the National Credit Union Administration (NCUA) who have threatened to sue Wall Street investment banks for misrepresenting bonds packaged with subprime mortgage loans, bought and held within credit union portfolios.

Credit Unions, usually created by employee working groups, were established by the government in 1934. Federal Credit Unions are overseen by the NCUA and managed by a credit committee or Board of Directors. These unions encourage regular savings by members and can provide consumer and home mortgage loans from the members’ pooled savings deposits. Funds deposited with the federal credit unions are insured up to at least $250,000 by the National Credit Union Share Insurance Fund (NCUSIF). These funds are also backed by the U.S. Government.

The 2008 credit crisis had such a dramatic effect on credit unions because of their reliance on corporate bank liquidity. Mortgage loans bought and held by credit unions significantly lost value causing a liquidity crisis for credit unions.

Sources:

Banks Hit for Credit Union Ills

www.ncua.gov

NCUA - Frequently Asked Questions

Euro Gains

Wall Street Journal, March 22, 2011
Euro Demand Hurts Dollar

USDX Down 4.51%

The U.S. Dollar Index return has fallen 4.51% year-to-date and 1.59% in March.

Wall Street Journal, March 21, 2011

Markets Back in Lockstep as Risk Bets Return

Japan's Disaster

New York Times, March 20, 2011
A Crisis That Markets Can't Grasp

Global Growth

New York Times, March 19, 2011

Washington vs. the Merciless

Similarities between the 2008 US Financial Crisis and Japan's Nuclear Risks

New York Times, March 18, 2011

Japan's Meltdown and the Global Economy's

Nuclear Situation in Japan Affects World Markets

Wall Street Journal, March 17, 2011

DJIA Takes Another Triple-Digit Hit

Treasury Rates

The 10-year Treasury note yield fell to a 3.22% close today following the Federal Reserve's decision yesterday to continue with their bond buying program.

Wall Street Journal, March 16, 2011

High-Yield Bond Issues, Loan Repricings Pulled; Treasurys Rise

Outcome of Today's Federal Reserve Policy Meeting

Wall Street Journal

Fed Sees Gains, Keeps Eye on Inflation

QE2

Wall Street Journal, March 14, 2011

Treasury Investors Focus on Fed, BOJ

The Federal Reserve System

The New York Times' list of resources on the federal reserve system.

Federal Reserve

Wisconsin Union Bill Becomes Law

Wisconsin's union bill was signed into law Friday by Governor Scott Walker. The law will strip unions in Wisconsin of their collective bargaining rights.

New York Times, March 12, 2011

Union Bill Is Law, but Debate Is Far From Over

New York Times, March 11, 2011

The Burden of Pensions on States

Crisis Continues in Eurozone

New York Times, March 11, 2011
Germany Sets Steep Price to Shore Up Euro Zone

Two-Year Anniversary of Bull Market's Start

Since March 9, 2009, the S&P 500 has gained more than 95% and the Dow Jones Industrial Average has gained nearly 87%.

Wall Street Journal, March 10, 2011

Stocks Ease Lower: Boston Beer Loses 4.3%

U.S. Considers Humanitarian Mission in Libya

The U.S. is considering humanitarian options that would provide aid to rebel forces in Libya.

Wall Street Journal, March 9, 2011

U.S. Sees Stalemate Emerging in Libya
EU to Broaden Libya Sanctions
U.S. Debates Libya Action

Rising Oil Prices Continue

The Dow Jones Industrial Average fell Monday on news of Wells Fargo's downgrade to the semiconductor sector and rising oil prices following continued conflict in Libya. The change pushed the year-to-date return for the DJIA to 4.92%.

Wall Street Journal, March 8, 2011
Stocks Notch a Down Day on Oil Jitters

QE2 Likely to Continue

Fed officials will most likely decide next week to continue the $600 billion Treasury securities purchasing program, known as QE2.

Wall Street Journal, March 7, 2011
Fed Unlikely to Remove Its Economic Stimulus Just Yet

The Fiscal Illusion

New York Times, March 6, 2011
It's Time to Face the Fiscal Illusion

Crude Oil Reaches $104.42

New York Times, March 5, 2011
Rising Oil Prices Overshadow Drop in the Jobless Rate

Oil Prices Could Push Food Prices Even Higher

World food prices rose 2.2% in February as measured by the Food and Agriculture Organization's price index.

Wall Street Journal, March 4, 2011

Food Prices Reach Record High

H.J. Heinz - Earnings Report:

Heinz Profit Rises on Strength in North America

Kroger - Earnings Report:

Loyalty Program Boosts Kroger

Article Publications

Included below are links to some of my published articles.

Greece's Economic Crisis
Currency Funds
Gold Prices Soar as Euro Falters
Eurozone Volatility
Emerging Markets
Deflation Risks