The April 2015 Empire State Manufacturing Survey, released today, points to continued weakness in New York’s manufacturing sector. The survey’s headline general business conditions index turned slightly negative for the first time since December, falling 8 points to -1.2 in a sign that the growth in manufacturing had paused. The new orders index—a bellwether of demand for manufactured goods—was also negative, pointing to a modest decline in orders for a second consecutive month. Employment growth slowed, too. The Empire Survey has been signaling sluggish growth since October of last year after fairly strong readings from May through September.
April 15, 2015
Please Read This before Betting against Government Bond Betas
Mounting evidence says that “low-risk” investing delivers superior returns, comparable to strategies based on value, size, and momentum.
April 13, 2015
Population Lost: Puerto Rico’s Troubling Out‑Migration
Jaison R. Abel and Richard Deitz For the first time in modern history, Puerto Rico is seeing its population decline. This troubling loss can be traced to an exodus of Puerto Rican citizens to the U.S. mainland, a current that has picked up considerably in recent years as Puerto Rico’s economy has deteriorated. Today, fully […]
April 10, 2015
Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time
Centered in London, the banking panic of 1825 has been called the first modern financial crisis, the first Latin American crisis, and the first emerging market crisis. And while the panic displayed many of the key elements of past crises we have covered—fluctuations in money growth, an investment bubble, a stock market crash, and bank runs—this crisis had its own twists, including a Bank of England that hesitated before stepping in as lender of last resort. But it is perhaps best known for an infamous bond market swindle surrounding an entirely made-up Central American principality. In this edition of Crisis Chronicles, we explore the Panic of 1825 and visit the mythical nation of Poyais.
Posted at 7:00 am in Economic History, Lender of Last Resort, Panic, Unemployment | Permalink | Comments (3)
April 8, 2015
The FR 2420 Data Collection: A New Base for the Fed Funds Rate
On April 1, 2014, the Federal Reserve began collecting transaction-level data on federal funds, Eurodollars, and certificates of deposits from a large set of domestic banks and agencies of foreign banks operating in the United States. Previously, the Fed had only received fed funds and Eurodollar data from major brokers, and not directly from the banks borrowing in these markets. These new data, collected on form FR 2420, have helped the Fed better understand activity in the fed funds and Eurodollar markets. In this post, we focus on the new data on fed funds, in light of the Federal Reserve Bank of New York’s Trading Desk announcement that it plans to use these data to calculate and publish the fed funds effective rate.
From the Vault: Separating News and Noise … and Jokes
Tesla Motors’ shares saw a brief bounce from a far-out and fictional product (a smart watch) announced as part of an April fool’s prank. While markets evidently made quick sense of the joke, that’s not always the case.
Posted at 12:40 pm in Financial Markets | Permalink
April 6, 2015
Are BHC and Federal Reserve Stress Test Results Converging? What Do We Learn from 2015?
In March, the Federal Reserve and thirty-one large U.S. bank holding companies (BHCs) announced results of the latest Dodd-Frank Act-mandated stress tests. Some commentators have argued that BHCs, in designing their stress test models, have strong incentives to mimic the Fed’s stress test results, since the Fed’s results are an integral part of the Federal Reserve’s supervisory assessment of capital adequacy for these firms. In this post, we look at the 2015 stress test projections by the eighteen largest U.S. BHCs and by the Fed and compare them to similar numbers from 2013 and 2014. As stress testing becomes more established, do we see evidence that the BHCs are mimicking the Fed?
April 3, 2015
Historical Echoes: Pop Culture Sold Savings Bonds
U.S. savings bonds were created in 1935 under President Franklin D. Roosevelt to assist the United States in raising funds for a variety of government programs.
April 1, 2015
Central Bank Solvency and Inflation
Marco Del Negro and Christopher A. Sims The monetary base in the United States, defined as currency plus bank reserves, grew from about $800 billion in 2008 to $2 trillion in 2012, and to roughly $4 trillion at the end of 2014 (see chart below). Some commentators have viewed this increase in the monetary base […]
March 30, 2015
The Effects of Entering and Exiting a Credit Default Swap Index
Since their inception in 2002, credit default swap (CDS) indexes have gained tremendous popularity and become leading barometers of the credit market.
RSS Feed
Follow Liberty Street Economics
