Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation?

MishTalk

Minyanville Business and Market News. Balanced Budget Ammendment Sign the Balanced Budget Petition. China Financial Markets. Market Oracle. Market Ticker. Real Clear Markets. Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation?

Fed Openly Discusses "Permanently High Balance Sheet"; Lie Finally Admitted

MishTalk

Merits of Not Shrinking the Balloon When the Fed first launched QE, they stated they had the "tools" necessary to shrink their ballooning balance sheet. Once the Federal Reserve lifts interest rates from near zero, likely this week, the focus will turn to the other legacy of the crisis-era policies: the Fed's swollen balance sheet. A " permanently higher balance sheet.

Central Bank Balance Sheets: What Will They Look Like in 2016-2017?

MishTalk

Reader Gary emailed a link to JP Morgan's Quarterly Market Guide. When do asset sheet balances approaching 100% of GDP matter? Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Financial Engineering Chart of the Day: Fed Balance Sheet vs. S&P 500

MishTalk

Fed Balance Sheet vs. S&P 500 I was playing around with some ideas on the St Louis Fed "Fred" database and came up with this. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Apple's Balance Sheet Math: Does Apple Really Have $203 Billion in Usable Cash on Hand as Widely Reported?

MishTalk

Current Liabilities Cash Much Smaller Than You Think I don't often dive into balance sheets, but did so after reading a Market-Watch opinion by Brett Arends. billion in “off-balance-sheet” liabilities.

Millennials Mired in "Wealth Gap" as Older Americans Gain; Housing Crash Continues to Overshadow Young Families' Balance Sheets

MishTalk

The average value of housing on young families’ balance sheets remains about 35 percent below its 2007 level, the St. These changes going on with individual balance sheets could have impacts on the whole economy,” said William Emmons, an economist at the St.

ECB Kills Covered Bond Market; Buyers of Only Resort; Japanization of Europe Continues

MishTalk

Covered bond supply has reached its lowest level in nearly two decades as the European Central Bank has been accused of crowding out investors from the market by pushing up prices and depressing yields. This is in spite of an ECB programme announced in September aiming to stimulate the market. Last month Allied Irish Banks took the unusual step of postponing a planned 10-year covered bond deal amid market speculation that the yield offered was too low to tempt investors.

Finding the Perfect Fit

Joellyn Sargent

Finding the right business fit means: You market to customers who are most receptive to your offers and don’t chase ‘likes’ or leads from people who don’t really care. It has the strength and stamina to chase new business, markets and opportunities without sputtering out before the finish line. Think about this: Business fitness includes a strong balance sheet. Leadership Managing customer experience leadership marketing strategy

Jeremy Grantham 1999, Jeremy Grantham Today: "Over Next Seven Years, Market Will have Negative Returns"

MishTalk

I have to admit (time and time again actually), that this market has gone further, faster, than I thought possible. Over Next Seven Years, Market Will have Negative Returns" I strongly encourage you to read an interview of Jeremy Grantham, by Stephen Gandel, senior editor of Fortune : The Fed is Killing the Recovery. Fortune : Are you putting your client''s money into the market? You asked me where the market is headed from here.

Nothing Magical About 2% Inflation Target Says Bernanke

MishTalk

Bernanke also made the case in his presentation for keeping the Fed’s balance sheet big in the aftermath of the financial crisis. [Is Most other major central banks have permanently large balance sheets and are able to implement monetary policy without problems,” he said.

Inequality Isn’t Just Due to Market Forces — It’s Caused by Decisions the Boss Makes, Too

Harvard Business

In it, the authors, both sociologists, made a compelling argument that, to understand labor market outcomes like inequality, it wasn’t enough to look at the supply and demand for individuals’ skills. However, any discussion of firms and wage inequality must not be limited to discussion of market forces. Companies can be divided into two types , in terms of how they approach hiring and compensation: organizational oriented and market oriented.

Swiss Gold Referendum in Perspective

MishTalk

As polls continue to swing around ahead of the Swiss gold referendum on 30th November, we expect increased volatility in the FX and gold market. After the implementation of the EURCHF floor, gold’s share of the SNB balance sheet has fallen to 7.5%

New Tools! More Pure Bank Profit!

MishTalk

Inquiring minds are monitoring the Fed''s Balance Sheet. One more week like this and the FED balance sheet will be $1 trillion more than last year at this time. debt markets since the credit crisis began in 2007.

Tools 78

Mish's Global Economic Trend Analysis: Reader Question: Does the.

MishTalk

Minyanville Business and Market News. Balanced Budget Ammendment Sign the Balanced Budget Petition. China Financial Markets. Market Oracle. Market Ticker. Real Clear Markets. The feds balance sheet doesnt reflect it. Feds Balance Sheet.

"Whatever It Takes" Stage Two; Headwinds Explain Why Draghi Will Fail This Time

MishTalk

Having already cut interest rates to record lows and saying they can go no lower, Draghi is now focused on boosting the ECB’s balance sheet. We are quite confident that the impact on our balance sheet size will be adequate, will be significant, will be sizable,” Draghi said.

Mergers & Acquisitions: Valuation

Tom Spencer

Building on information provided in Management Consulting: A Guide to the Profession , I highlight three approaches that a consultant can use when performing a valuation: Balance sheet valuation; Market based valuation; and. “Price is what you pay. Value is what you get.”

China Cash Crunch Eases, For How Long? Three Things China Needs to Avoid; When can Beijing Truly move to Market-Determined Interest Rates?

MishTalk

China''s Move to Market-Set Rates Let''s step back to December 8 and look at China Relaxes Grip on Interest Rates China is relaxing its grip on interest rates with the launch of a financial instrument that allows banks to trade deposits with each other at market-determined prices. The certificates of deposits will push banks closer to an operating environment in which rates are deregulated and are also aimed at improving the circulation of cash in the country’s interbank market.

Review of 39pg McKinsey Presentation

Consultants Mind

Unless it is a straight marketing or organizational design piece, there are numbers on the majority of pages. Often this can be done with a simple income statement (Rev-Cost=Profits) or balance sheet ( A = L+E ). McKinsey & Company do great work.

Reader Question on Banking System Insolvency, QE, and "Necessity"

MishTalk

reader Dave, a friend, noted that as the Fed jacked up its balance sheet, velocity has mirrored the curve to the downside. Dave asks " Can''t an argument be made that since much of the banking system is really insolvent, that the Fed increasing its balance sheet is necessary? " "Necessity" This depends on what you mean by "necessary" and more importantly, who gets to decide. In response to Will Prices Rise Significantly When Velocity of Money Picks Up?

Would a Bund by any other name smell as sweet?

Tom Spencer

Thirdly, European banks are currently focused on building their balance sheets not on lending. While Bunds may still smell sweet, weak financial markets in Europe are a cause for concern. Weak financial markets increase the risk that one or more European banks will fail.

ECB Now a Hedge Fund; €1T Bazooka; ECB Promotes Euro Carry Trade; Draghi Has it Backwards

MishTalk

Question: Mr Draghi, you said that the new measures and the TLTROs will have a sizeable impact on your balance sheet. So all this makes a precise estimate of the impact that these transactions will have on our balance sheet very complicated, especially at the stage when none of these operations have as yet been undertaken. The second aim is to steer, significantly steer, the size of our balance sheet towards the dimensions it used to have at the beginning of 2012.

Draghi Pressures ECB to Buy "Junk-Rated" Loan Bundles of Greece and Cyprus

MishTalk

On September 4, ECB President pulled out a financial bazooka including a pledge to build up the ECB''s balance sheet by another €1 trillion. Bundesbank president Jens Weidmann, who also sits on the ECB’s policy making governing council, has already objected to the plan to buy ABS, which he says leaves the central bank’s balance sheet too exposed to risks. In this case, the stench on Greek bank balance sheets will not go away.

Steen Jakobsen: US Credit Cycle Peaked, Zero Growth Coming to Europe, Gold 1425 by Year End

MishTalk

Central Bank Balance Sheets Excuse me? Hard even to see change in ECB balance sheet. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Former Fed Governor Thomas Hoenig Says US Banks Undercapitalized, Unsafe, and Unsound

MishTalk

In a recent speech, Mr. Hoenig noted that under American accounting rules, derivative holdings add $300 billion to the balance sheets of five top banks — JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley. This higher capital ratio is achieved by reducing on-balance sheet assets by a pre-assigned risk weight and excluding off-balance sheet assets, such as derivatives.

Another "Print Your Way to Prosperity" Mindless MMT Proposal

MishTalk

The Fed’s tapering merely slows the growth of its balance sheet. The rarely admitted truth, however, is that there is no need for central banks’ balance sheets to shrink. They could stay permanently larger; and, for some countries, permanently bigger central-bank balance sheets will help reduce public-debt burdens. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Reflections on "Paper Reserves" of Central Banks; Gold and the Tapering Disconnect

MishTalk

In Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation? I posted an interesting chart by reader Tim Wallace of the stock market vs. Fed asset holding (repeated below for convenience). Fed Balance Sheet vs. Stock Market.

Can the Fed Really Print Money? What Would Negative Interest Rates Do?

MishTalk

Despite the unprecedented increase in the Federal Reserve’s balance sheet, growth in M2 over the first nine months of this year fell below its average rate of growth over the past 115 years, a time when the growth in the monetary base was stable and quite modest.

The age old tale of financial crises

Tom Spencer

The 2008 financial crisis saw Ben Bernanke, the then chairman of the Federal Reserve, providing money to banks across the United States following the collapse of the housing market and subsequent defaults of mortgage backed securities.

US Corporations Take Huge Losses on Venezuelan Currency

MishTalk

When black markets in currencies develop, you can be 100% sure the official exchange rate is overinflated. bolivars to the dollar, the floating rate of exchange is 50 bolivars to the dollar, and the black market rate is 184 bolivars to the dollar.

Review: BCG 2016 M&A Report

Consultants Mind

M&A in all market conditions. Up market / down market. BCG argues that over the last 3 years, the acquirer stock price (being positive after the deal) indicates the market’s bullishness towards M&A. 2015 was a blockbuster M&A year.

Report 190

5 Ways to Increase Your Cross-Selling

Harvard Business

In the past, marketers have struggled to deliver the higher response rates they need from existing customers — a smaller group than potential new customers. Digital channels now allow companies to fine-tune marketing messages based on observed behavior. These favorable changes have motivated marketers to reassess cross-selling opportunities, which can be substantial. Take a balance-sheet view. Sales & Marketing Digital Article

Can an Expense Be Profit?

Martinka Consulting

His balance sheet is a mess. One that struck me is something I see every so often and it’s marketing expense. He figured because a $30,000 marketing campaign didn’t work it really wasn’t an expense but should be considered profit. The flipside is if the marketing campaign had worked would this owner take away the revenue and profit it generated? Marketing strategies have to be tried and you have to realize they won’t all work.

Why Financial Statements Don’t Work for Digital Companies

Harvard Business

In the 2016 book The End of Accounting , NYU Stern Professor Baruch Lev claimed that over the last 100 years or so, financial reports have become less useful in capital market decisions. This becomes clear when you look at a company’s two most important financial statements: the balance sheet and the income statement. Let’s first look at the balance sheet. steven moore for hbr.

Debate Over Fed's Exit Strategy Continues: Bernanke vs. Dudley vs. Yellen

MishTalk

Yesterday, former fed chair Ben Bernanke said " No Need for Fed to Shrink Balance Sheet ". The Federal Reserve does not need to shrink its $4 trillion-plus balance sheet by even "a dime" for it to normalize monetary policy when the time comes, former Fed Chair Ben Bernanke said on Monday. When the Fed does tighten, he said, "you can have some bumpiness" as markets potentially react to the changes.

Flip the Switch

Martinka Consulting

One of the first things I do when I see financial statements is check if the year-to-date income on the P&L is the same as the year-to-date income on the balance sheet. Demonstrate you can attract and retain good employees (especially in our currently tight labor market). Recently I got an e-newsletter from my friend Allan VanderHamm with Berntson Porter.

Two-Week Price Inflation in Argentina hits 30%, US Products Lead the Way; Currency Devaluations Hit P&G Earnings

MishTalk

Retail investors aren’t the only ones suffering from the woes of the emerging markets: Procter & Gamble PG +2.06% is feeling the pain of foreign currencies, too. dollar; P&G, meanwhile, had calculated the value of its foreign transactions using the other, 6.3-bolivare-per-USD rate, thus the near-$300 million charge P&G now expects to incur on its third quarter balance sheet. Price of many goods in Argentina soared in the past two weeks.

How the Great Recession Changed Banking

Harvard Business

The market panicked. That strengthened investment banks’ balance sheets by forcing them to scale back and to change the nature of the risks they take. As a result, their balance sheets are half as large on a risk-adjusted basis, and the capital they hold against trading positions has doubled over the past decade, our research shows. This is most apparent in the credit markets, where revenues have shrunk by more than 40% from pre-crisis peaks.

Economic Illusions vs. Reality; Helicopter Drop, What Else?

MishTalk

Our conclusion is that, in a financially-challenged economy like the Eurozone, with policy rates close to the ELB, and with excessive leverage in both the public and private sectors, balance sheet expansion by the central bank alone may not be sufficient to boost aggregate demand by enough to achieve the inflation target in a sustained manner. The balance sheet of the Swiss National Bank has expanded even more impressively, again with no discernable impact on the inflation rate.

Austria "Bad Bank" Goes Bad, $8.5 Billion "Bail-In" Underway

MishTalk

Reuters reports Austria Imposes Debt Moratorium on Heta "Bad Bank" Austria''s Financial Market Authority stepped in on Sunday to wind down "bad bank" Heta Asset Resolution and imposed a moratorium on debt repayments by the vehicle set up last year from the remnants of defunct lender Hypo Alpe Adria. The step, allowed by new legislation that gives banking supervisors more power to intervene, followed an outside audit of Heta''s balance sheet that exposed a capital hole of up to 7.6

Blockchain Will Transform Customer Loyalty Programs

Harvard Business

First, blockchain could help relieve a large balance-sheet liability that many in the industry are facing. A robust, frictionless partner network could mean many more redemption options outside of the core travel product, thereby creating a much-needed release valve for these growing balance-sheet pressures. Marketing Technology Travel Digital ArticleLoyalty programs have proliferated across travel, retail, financial services, and other economic sectors.