Sraffa vs. Hayek and the Natural Rate of Interest
Fixing the Economists Article of the Week
by Philip Pilkington
David Glasner from over at the blog Uneasy Money has co-written an interesting paper on Sraffa and his critique of the natural rate of interest as it was put forward in Hayek's business cycle theory. There is a lot that might be written about this paper as I believe that the debate has much contemporary relevance. Here, however, I will focus purely on the topic of the paper at hand. Namely, whether Sraffa's critique of the natural rate of interest was coherent. I will also assume familiarity with the debate as, frankly, I'm too lazy to summarise it and interested people can read the paper which provides a fantastic overview.
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Market Commentary: Markets End Day In The Red, May Be Temporary
Closing Market Commentary For 09-29-2014
Interesting session today. Basically Mr. Market came out of the gate because the European counterparts were lower, but recovered somewhat. Mostly noise today, but the Hammer Doji formation left by both the DOW and SP500 are signals for a bullish market IF confirmed tomorrow.
By 4 pm the markets were trading sideways in a narrow zone on low volume. If the 'signals' are correct, tomorrow's session should be in the green.
Market Commentary: Markets Very Much In The Red, Volume Is Low To Anemic
Midday Market Commentary For 09-29-2014
DOW recovered 50% of its morning loses at one point and the SP500 has fallen below its 50 DMA. The morning opening sell-off may just be a market anomaly or it could be a wake-up call for something bigger, extremely difficult to call right now. The prognosis from last week was for this week to show a lot of weakness.
By noon the volume was occasionally anemic as the averages were 'rolling over' as investors continue to analyze their portfolios. Is the time to sell or buy?
Massive sinkhole on Crimea highway leaves 6 dead
Six people died including two children as the road suddenly collapsed creating a sinkhole on Nikolaev Highway near Simferopol on Sunday.
Leading Index Review: August 2014 Philly Fed Leading Index Growth Rate Marginally Declines
Econintersect: The July forecast now shows growth is projected at 1.5% over the next 6 months - a slowing pace of growth trending over the last group of releases. A positive index number projects positive economic growth for the next 6 months. A review of all major leading indicators follows - and no leading index is particularily strong.
Two Florida Men Charged With Defrauding Investors in Purported Television Network, Former Basketball Legend Michael Jordan Planned to Invest
from the Securities and Exchange Commission
The Securities and Exchange Commission today announced charges against two Florida men for defrauding investors in a purported startup television network and production company by providing false information about its revenues and future prospects, including that former basketball star Michael Jordan planned to invest in the company.
September 2014 Texas Manufacturing Survey Rate of Growth Climbs
Of the five Federal Reserve districts which have released their September manufacturing surveys, all are forecasting growth. A complete summary follows. [note that values above zero represent expansion].
Market Commentary: DOW Off Triple Digits At Opening, Averages Remain Down
Opening Market Commentary For 09-29-2014
Premarkets were off 0.9% this morning setting up the opening of the markets. Within minutes the DOW was off 173 points and the SP500 had fallen below it 50 DMA.
By 10 am the markets were still down but recovering to -0.70% on falling volume. The trend is melting up while firmly entrenched in the negative zone.
August 2014 Pending Home Sales Soft, Remain in Contraction Year-over-Year
Written by Steven Hansen
The National Association of Realtors (NAR) seasonally adjusted pending home sales index for August 2014 degraded relative to last month. Pending home sales index level is down from a year ago, and our analysis suggests that September 2014 existing home sales will be much worse than August's - and will continue to contract year-over-year.
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A Word from This Newsletter's Sponsor
7 Signs of a Market Crash
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August 2014 Personal Income and Expenditures at Expectations
Written by Steven Hansen
This noisy data series came in at expectations with moderate backward revision. Consumer spending growth significantly improved over last month - but it came on the back of lower saving rate.
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US Treasury Lacks a Safety Net In the Event of an Unforeseen Depletion of Cash Balances
by Kenneth D. Garbade - Liberty Street Economics, Federal Reserve Bank of New York
From time to time, and most recently in the April 2014 meeting of the Treasury Borrowing Advisory Committee, U.S. Treasury officials have questioned whether the Treasury should have a safety net that would allow it to continue to meet its obligations even in the event of an unforeseen depletion of its cash balances. (Cash balances can be depleted by an unanticipated shortfall in revenues or a spike in disbursements, an inability to access credit markets on a timely basis, or an auction failure.)
What We Read Today 29 September 2014: Special Edition
Econintersect: Today is a special edition of WWRT (What We Read Today). This is a view of the complete page seen by subscribers 'behind the wall'. All content in today's special edition is new material.
This is the third of three special days run this weekend showing the entire WWRT file to the general public in order to acquaint non-subscribers with the type of content they are missing every day. The two preceding days can be viewed for 28 September and 27 September
We hope these three special event days will convince readers of the value in supporting GEI with a modest annual subscription of $25 to access our daily premium content. This is way to help support the entire effort of this site to bring you the latest in economic, financial and political economy news, analysis and opinion every day of the year.
About That 500% Jump in Interest Rates...
by Michael Lombardi, Profit Confidential
The verdict is in...
Last week, at the end of its regularly scheduled meeting, the Federal Reserve said:
- It would continue to reduce the amount of money it creates each month. The Fed said it will be out of the money printing business by the end of this year. By that time, the Federal Reserve will have created more than $4.0 trillion new American dollars (out of thin air).
- And when the Treasuries and mortgage-backed securities the Fed has bought mature, they will roll them over-which means they will just continue collecting interest on the securities they bought as opposed to taking the cash when they mature. (Source: "Press Release," Federal Reserve, September 17, 2014.) I doubt the Fed has any choice on this. If the Fed doesn't roll over the Treasuries it has bought, who would buy them when they hit the market?
"Colour Coded"
Age of Wisdom, Age of Foolishness (44)
Written by Adam Whitehead, KeySignals.com
The global geopolitical crisis moved from imagery to colour coding last week; in order to help colour the judgement of a general public which has become confused by the constant attacks on their senses in the media. The tempo of these attacks seemed to build as the days elapsed before the main event of the NATO summit in Wales; which was seemingly supposed to find solutions to these issues.
Read more >>
Trinidad Joins Central Banks Adjusting Policy Pre-Fed Rise
Monetary Policy Week in Review 22-16 September 2014
by Peter Nielsen, Central Bank News
Trinidad and Tobago's central bank became the latest to adjust its policy rate last week ahead of the looming change in U.S. monetary policy, raising its repo rate to prevent capital from seeking higher yields abroad, a move that would put pressure on its exchange rate and spark inflation.
Public Banking Conference Held in Santa Fe
Written by Sig Silber
An all-day (and evening) conference was held 27 September 2014 at the Santa Fe Community Convention Center in New Mexico. Sponsors were We Are People Here! and the Public Banking Institute. Approximately 250 attended (official attendance was not announced). Attendees were from Santa Fe and other New Mexico locations as well as from many points around the U.S. This conference served as half of the annual conference for the Public Banking Institute for the western U.S.
The half of the annual conference for the eastern U.S. will be held in Philadelphia 18 October. The choices of the two conference cities and the decision to split the national meeting was made because the two cities are in the process of serious evaluation of establishing municipal public banks.
There Are More Billionaires In The World Than Ever
from Felix Richter, Statista.com
by Niall McCarthy
The number of billionaires worldwide has increased 7 percent from 2,170 in 2013 to 2,325 in 2014, according to the Wealth-X and UBS Billionaire Census 2014.
Educating Investors about Investing in Unregistered Securities Offerings under Regulation D of the Securities Act
by Securities and Exchange Commission
The SEC's Office of Investor Education and Advocacy is issuing this Investor Bulletin to educate investors about investing in unregistered securities offerings, or private placements, under Regulation D of the Securities Act.
Infographic of the Day: A Spectrum of Moustaches
Nothing makes style like a moustache.
Gold Price Forecast: How the Yellow Metal Will Reach $5,000 per Ounce
Money Morning Article of the Week
by Peter Krauth, Money Morning
Gold price forecast, Sept. 10, 2014: In April 2010 I made a somewhat controversial prediction that gold would reach $5,000 an ounce. I still believe this to be a realistic price target - and now prominent gold mining experts are following suit.
On Roger Cohen's Ode to Colonialism and Imperialism
Why is it "Insideous" to Want Justice for Banksters?
by William K. Black, New Economic Perspectives
In another proof of our family rule that it is impossible to compete with unintentional self-parody, Roger Cohen has penned "The Great Unraveling." What makes the article perfect is that it brings together Cohen's worst traits - and ends with praise for Rudyard Kipling, who set the bar for those traits. Cohen is distressed about many things, but the first one that I focus on is his claim that the Scots' response to the City of London's elite financial criminals is "insidious." In the passage that he makes this claim Cohen denounces the Scots as childish Celts.
Earnings and Economic Reports Week Starting 29 September
Written by Merlin Rothfeld, Online Trading Academy
Econintersect: Here is a day-by-day rundown of the global economic calendar events for the coming week and the important earnings announcements each day, as well.
Video presentation follows the Read more >> jump.
Merlin Rothfeld
Insider Trading 26 September 2014: Facebook Selling Again
by Asif Suria
Insider buying decreased last week with insiders buying $30.92 million of stock compared to $49.49 million in the week prior. Selling increased with insiders selling $587.59 million of stock last week compared to $469.15 million in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 19. In other words, insiders sold 19 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 9.48.
New iPhones Are off to a Great Start
by Felix Richter, Statista.com
Three days after the official launch of the new iPhones on Friday, Apple reported that the new devices had set a new sales record during their first weekend on sale.
