The Big Picture

---

• SNB: “Real exchange rates and fundamentals: robustness across alternative model specifications”
• What Should Be Done In the Wake of the French Terror Attack?
• Who Owns Treasuries?
• My Wish List 2015 (Forecast Free)
• 10 Wednesday AM Reads
• The Effect of Risk and Organizational Structures on Bank Capital Ratios

SNB: “Real exchange rates and fundamentals: robustness across alternative model specifications” Posted: 08 Jan 2015 02:00 AM PST

What Should Be Done In the Wake of the French Terror Attack? Posted: 07 Jan 2015 05:30 PM PST "The Proper Response to Today's Tragic Events Should Be for EVERY Publication On The Planet To Print Depictions of the Prophet Muhammad"   We at Washington's Blog have done as much as anyone to dispel the myth that all Muslims are terrorists. (Here, here, here, here, here, here, and here). And we've written as much as anyone on the dangers of false flag terror: carrying out terror attacks and then falsely blaming in on your enemy. We don't yet have many facts on the horrific French terror attack which killed writers and cartoonists who satirized Islam. However, our initial gut reaction is that every website in the world should run the new cartoon which the paper published yesterday which allegedly was the cause for the terror attack. Paul Joseph Watson – a smart, prominent, alternative blogger who has written widely on false flag attacks, Western aggression and related topics – had the same reaction, writing: The proper response to today's tragic events should be for EVERY publication on the planet to print depictions of the Prophet Muhammad. (Islamic teachings forbid any depictions of Muhammad; and the publication against which today's terror attack was launched had been firebombed 3 years ago when it printed a cartoon depicting Muhammad in a satirical manner.) We don't condone attacking an entire religion for the murderous acts of a crazed few.  We are also in favor of cultural sensitivity. On the other hand, we are big believers in free speech and satire. As we've previously noted: There is a well-known tradition thousands of years old – called "crazy wisdom" – which uses humor as a path for speaking truth and waking people up from their erroneous beliefs and their coma of sleepwalking. (Famous rock and roll dj Wes "Scoop" Nisker wrote a great book on the subject, which I strongly endorse). We think there may be a way to harmonize these competing ideas.   Every website and traditional media publication in the world could satirize ISIS and the other extreme, murderous Islamic fundamentalists … while respecting – and pretty much leaving alone –  the overwhelming majority of Muslims who are peaceful and sane. What do you think? Please let us know how you would approach this issue.

Who Owns Treasuries? Posted: 07 Jan 2015 12:00 PM PST From Deutsche Bank: The ownership structure of US Treasuries is fascinating: 50% is held by foreigners and 20% is held by the Fed. Domestic accounts hold only 30% of Treasuries, down from 75% in the early 1990s, see chart below. Also, attached please find our 105 page update on Who is buying Treasuries, Mortgages, Credit, and Munis. Let us know if you want to set up a conference call to discuss flows with us and our trading desk. Source: Deutsche Bank, Who is buying Treasuries, Mortgages, Credit, and Munis?

My Wish List 2015 (Forecast Free) Posted: 07 Jan 2015 09:00 AM PST U.S. markets have declined in the new year. This isn’t necessarily a bad thing. When markets go straight up without pause and sentiment becomes excessive, it rarely ends well. A little dose of fear might be a good thing. Which brings me to today's listicle. These aren’t forecasts, but events I’d like to see happen. Think of it as my wish list. U.S. Equities: Nothing goes straight up (or down) forever. The market’s torrid run since early 2009 has been in danger of overheating. As noted, sentiment can get silly at times. A break is deserved, giving earnings time to catch up with prices and make a fully valued market more attractive. I have been calling this the most-hated rally in market history. As my colleague Josh Brown has noted, this is no longer the case. Wish: U.S. stock markets that are little changed to slightly down. This would be healthy in the long run.  Global Markets: On the other hand, emerging and developed markets in Asia and Europe have been in trouble for quite a while. They need to get their houses in order, which no one expects any time soon. However, Mr. Market never waits for the all-clear whistle. Typically, markets rallying long before improvements are reflected in the economic data. Those who wait for it to be safe are always late to the party. Wish: A second-half 2015 rally, including the resumption of emerging-market gains. continues here

10 Wednesday AM Reads Posted: 07 Jan 2015 05:00 AM PST Futures are higher this morning, but we never know what that means. Let’s see if today’s bounce has any staying power or not.  Oh, and, morning train reads: • Shiller Spotted the Last Two Bubbles—Here's What He Says About the Bond Boom (Money) see also Soaring Bond Prices May Sound an Economic Warning (Dealbook) • The (Real) Bank of America (Politico) • Value Managers Root for More Market Turmoil (Bloomberg) • The inflation chicken littles were so wrong: The dollar is on a tear (Washington Post) • House Republicans Change Rules on Calculating Economic Impact of Bills (NYT) see also White House Budget Director Blasts GOP 'Dynamic Scoring' Plans (Real Time Economics) Continues here

The Effect of Risk and Organizational Structures on Bank Capital Ratios Posted: 07 Jan 2015 02:00 AM PST

You are subscribed to email updates from The Big Picture To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States

.