Market Commentary


The Fed’s Non-tightening Tightening

Author: David Kotok, Post Date: February 19, 2010

Let’s see. The Fed hiked a rate even though it wasn’t the policy rate. The Fed shortened a term even though it wasn’t the “normal” term. The Fed announced it as a surprise even though they have been saying they want to be transparent and prepare markets for changes in advance. And the Fed speakers […]

The Greek Cockroach

Author: David Kotok, Post Date: February 16, 2010

Warren Buffett’s adage “you never see just one cockroach” is going to be tested in Greek. We are about to find out if this is true as the ongoing “Odyssey” of Greece’s finances continues to unfold. The holiday weekend revelations about Greece and the use of swaps that were arranged through Goldman Sachs is just […]

Is Portugal Next?

Author: Bill Witherell, Post Date: February 15, 2010

The Greek crisis, while not resolved, has eased following political assurances that the European Union is prepared to help Greece avoid a default, but will require Greece to make draconian budget reductions.  Investors are now judging the likelihood of a default by Greece to be low, as can be seen in the rally in Greek […]

My Big, Fat, Never on Sundays Story

Author: David Kotok, Post Date: February 11, 2010

The deal is done and the details will be revealed soon.  A structure to provide fiscal support Greece by EU members is evolving.  France and Germany are the two largest economies in the euro zone and they have agreed to an EU-oriented solution.  They will also preserve the independence of the European Central Bank.  That […]

Rollover Risk

Author: David Kotok, Post Date: February 10, 2010

Tonight on Larry Kudlow’s show I listened to a gang of four first bash Greece, then the ECB and then the EU.  They forecast the demise of the euro and the collapse of the EU.  I couldn’t disagree more.  Today I had to explain to a good friend and client why all $2.8 trillion of […]

Currency Market Volatility

Author: Bill Witherell, Post Date: February 8, 2010

Currency markets have become highly volatile, sparking a global retreat from risk and into the “safe haven” currencies, the US dollar and Japanese yen. It looks like this volatility will be with us for a while. In this note we will discuss some of the factors underlying the current market turbulence and suggest some implications […]

Greece and an Ode to Simonides

Author: David Kotok, Post Date:

Public sector workers in Greece are preparing to strike this week.  They oppose the plan to reduce their wages and pensions.  These payments are more than half of the Greek budget.  Greece’s estimated 2009 deficit was 12.7% of GDP.  If the proposed austerity measures are enacted, the proposed 2010 budget deficit will be 8.7% of […]

BABs Extension Will Aid the Tax-Free Bond Market

Author: John Mousseau, Post Date: February 1, 2010

Bloomberg News reported yesterday that President Obama will ask Congress to make permanent the temporary Build America Bonds program (BABs) by which the Federal government subsidizes interest payments to state and local government issuers.  We think this has a number of benefits for the tax-exempt municipal bond market and municipal bonds in general. Under current […]


Author: David Kotok, Post Date:

Rafael Carrillo bursts with enthusiasm and effervescing hospitality.  His family-run restaurant is El Churrasco Restaurante.  His family-run hotel is La Hospederia de El Churrasco.  You can find them in the old city of Cordoba on Romero Street near the ancient Jewish quarter, the mosque, and the old city gate, Puerta de Almodovar. Lunch was delicious […]

Madrid, Saturday Night, January 30, 2010

Author: David Kotok, Post Date: January 30, 2010

Goya, Velazquez and El Greco provide an excellent distraction from world economics as we walk in the Prado with some NBEIC colleagues.  We are here for the quarterly meeting of the National Business Economics Issues Council. Madrid is cold but the skies are clear.  The moon is full.  Lovely young women in short skirts with […]

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