Central banks’ long-range rate forecasts prod excessive financial risk-taking and may slow necessary tightening, says the Bank for International Settlements. Forward guidance fails the risk-reward test. Although the BIS didn’t say it, the policy just doesn’t stack up.
Friday’s report leaves the U.S. with 666,000 fewer working citizens than in early 2008. Yet the stock market hit a record on Thursday, five years after its nadir. It’s a reminder that America’s recovery has so far benefited Main Street a lot less than it has helped Wall Street.
An uppity investor challenging laggard miner Cliffs rejected an offer of two board seats. Instead, Casablanca Capital is forging ahead with efforts to install six directors and replace the CEO. Companies have been listening more to vocal shareholders, but those times may go by.
The Russian president fears real democracy in Ukraine as much as at home. And he’s afraid of a disruption of trade and financial ties if Kiev turns towards the EU. If the U.S. and Europe want Putin to back down, they have to convince him that he’s wrong on both counts.
Goldman’s elevator annotator failed for a denial of identity. Bitcoin’s fingered father rejects founding the crypto-currency. From this shadowy world, such confusion is expected. Not so among systemically important insurers, where Pimco’s “Bond King” Bill Gross reigns supreme.
Based on the 2007 A&P-Pathmark merger, synergies could be worth more than half the $9.4 bln Cerberus’s Albertsons is paying for its rival U.S. grocer. In theory that leaves room for a higher offer. But competition means cost savings may need to go to shoppers, not investors.
Felix Martin says that money isn’t a commodity, but a system of credits. This insight allows his book to rewrite monetary history in an eye-opening way. It also suggests that the way economists approach finance and recessions is hopelessly wrong.