Morning Reading – January 26, 2011 – Updated
The Slope Of Hope: Time Saver
In the interest of saving Slopers’ valuable time – always a priority here – allow me to spare you investing your minutes in a couple of big events taking place over the next twenty-four hours.
The Slope Of Hope: Food Inflation- More Than Meets the Eye
As the mainstream public and media starts grasping the significance of rising food prices around the world, their focus, and the focus of most people is on how terrible it is for poor people or for poor countries, but this is problem is more insidious, and damaging for our economy.
Daily Options Report: Fading VIX Breakouts
So I saw this tweet:
“VIX briefly traded above MM 0/8ths= 18.75, A breakout is bearish for the market … ”
FT Alphaville: A very messy Ambac lawsuit for JPMorgan
JPMorgan didn’t want this to be made public. You can kind of see why.
Quick background — the bank has been engaged in a legal battle with Ambac since November 2008. The monoline says EMC, Bear Stearns old mortgage-banking arm, misrepresented certain securitised loans that Ambac insured. The lawsuit’s been going back and forth for ages but this month a new court doc was made public.
FT Alphaville: Searching for BoE credibility on inflation
From Deutsche Bank, the number of news stories that match three topical words…
FT Alphaville: WTI’s upcoming ‘Keystone’ problem
If you thought the distortions in the WTI-Brent spread couldn’t keep going for much longer, you may be interested in the following.
Self-Evident: Far from the madding crowd
The biggest problem with the muni market these days is that it has become the unlikely host of various opportunists: an opportunistic analyst (Meredith Whitney); opportunistic reporters (like the New York Times’ Mary Williams Walsh); and opportunistic political figures (like Senator John Cornyn and Newt Gingrich). All of these individuals seem to regard hyping credit risk in the muni market as a means of achieving some degree of popularity. To the extent that their fear-mongering has contributed to funds hemorrhaging and irrationally higher market interest rates in recent weeks, the personal ambitions of these individuals are coming at an unnecessary cost to investors and taxpayers. I think most people would be outraged by this situation if they had a technical appreciation of the muni market; unfortunately, most people are only familiar with the caricature of the muni market and muni issuers that these people peddle.
Pragmatic Capitalism: IS QE ACTUALLY WORKING?
Richard Koo’s latest strategy note blasts the idea that QE2 is having a substantial impact on the global economy. Not only does he contend that QE is not helping the US recovery, but he also contends that emerging market economies are misleading when they imply that QE is the cause of their current inflation problems. Koo’s reasoning is rather simple. If the Fed cannot even substantially alter the US money supply then what makes anyone think they can alter China’s money supply…