RMR Wealth Management Blog

Globalization 101 Resource Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Globalizaton 101

http://www.globalization101.org

Created for students, this site provides information on defining globalization, issue briefs, and news analysis

 

Federal National Mortgage Association (Fannie Mae) Resource Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Federal National Mortgage Association (Fannie Mae)

http://www.fanniemae.com/portal/research-and-analysis/index.html

Economics and mortgage market commentary

 

Bureau of Economic Analysis: U.S. Department of Commerce Resourse Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Bureau of Economic Analysis: U.S. Department of Commerce

http://www.bea.gov

Site includes several News links and links to national and regional GDP figures as well as International Trade.

Conference Board Resource Informaton by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Conference Board

http://www.conference-board.org

Tracks and reports on leading, coincidental, and lagging economic indicators.

 

Board of Governors of the Federal Reserve System Resource Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Board of Governors of the Federal Reserve System

http://www.federalreserve.gov

Numerous links to monetary policy, economic and research data and economic indicators.

 

Federal Home Loan Mortgage Corporation (Freddie Mac) Resource Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Federal Home Loan Mortgage Corporation (Freddie Mac)

http://www.freddiemac.com/news/finance/

Economic and housing research and commentary

 

Federal Reserve System Resource Information by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Thursday, August 16, 2012

Federal Reserve Systme Online

http://federalreserveonline.org

Site has information about the federal reserve system plus links to each of the Federal Reserve Districts including:

*New York - http://www.newyorkfed.org

*Boston - http://www.bos.frb.org

*Minneaspolis - http://minneapolisfed.org

*San Francisco - http://frbsf.org

 

 

European Central Bank President Mario Draghi Opening Statement Text posted by Ryan C. Rogers

RMR Wealth Management - Thursday, August 02, 2012

ECB President Mario Draghi Opening Statement - 08/02/12

“Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged, following the decrease of 25 basis points in July. As we said a month ago, inflation should decline further in the course of 2012 and be below 2% again in 2013. Consistent with this picture, the underlying pace of monetary expansion remains subdued. Inflation expectations for the euro area economy continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. At the same time, economic growth in the euro area remains weak, with the ongoing tensions in financial markets and heightened uncertainty weighing on confidence and sentiment. A further intensification of financial market tensions has the potential to affect the balance of risks for both growth and inflation on the downside.

The Governing Council extensively discussed the policy options to address the severe malfunctioning in the price formation process in the bond markets of euro area countries. Exceptionally high risk premia are observed in government bond prices in several countries and financial fragmentation hinders the effective working of monetary policy. Risk premia that are related to fears of the reversibility of the euro are unacceptable, and they need to be addressed in a fundamental manner. The euro is irreversible.

In order to create the fundamental conditions for such risk premia to disappear, policy-makers in the euro area need to push ahead with fiscal consolidation, structural reform and European institution-building with great determination. As implementation takes time and financial markets often only adjust once success becomes clearly visible, governments must stand ready to activate the EFSF/ESM in the bond market when exceptional financial market circumstances and risks to financial stability exist – with strict and effective conditionality in line with the established guidelines.

The adherence of governments to their commitments and the fulfillment by the EFSF/ESM of their role are necessary conditions. The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective. In this context, the concerns of private investors about seniority will be addressed. Furthermore, the Governing Council may consider undertaking further non-standard monetary policy measures according to what is required to repair monetary policy transmission. Over the coming weeks, we will design the appropriate modalities for such policy measures.

Let me now explain our assessment in greater detail, starting with the economic analysis. On a quarterly basis, euro area real GDP growth was flat in the first quarter of 2012, following a decline of 0.3% in the previous quarter. Economic indicators point to weak economic activity in the second quarter of 2012 and at the beginning of the third quarter, in an environment of heightened uncertainty. Looking beyond the short term, we expect the euro area economy to recover only very gradually, with growth momentum being further dampened by a number of factors. In particular, tensions in some euro area sovereign debt markets and their impact on financing conditions, the process of balance sheet adjustment in the financial and non-financial sectors and high unemployment are expected to weigh on the underlying growth momentum, which is also affected by the ongoing global slowdown.

The risks surrounding the economic outlook for the euro area continue to be on the downside. They relate, in particular, to the tensions in several euro area financial markets and their potential spillover to the euro area real economy. Downside risks also relate to possible renewed increases in energy prices over the medium term.

Euro area annual HICP inflation was 2.4% in July 2012, according to Eurostat’s flash estimate, unchanged from the previous month. On the basis of current futures prices for oil, inflation rates should decline further in the course of 2012 and be below 2% again in 2013. Over the policy-relevant horizon, in an environment of modest growth in the euro area and well-anchored long-term inflation expectations, underlying price pressures should remain moderate.

Risks to the outlook for price developments continue to be broadly balanced over the medium term. Upside risks pertain to further increases in indirect taxes, owing to the need for fiscal consolidation, and higher than expected energy prices over the medium term. The main downside risks relate to the impact of weaker than expected growth in the euro area, in particular resulting from a further intensification of financial market tensions. Such intensification has the potential to affect the balance of risks on the downside.

Turning to the monetary analysis, the underlying pace of monetary expansion remained subdued. The annual growth rate of M3 stood at 3.2% in June 2012, slightly higher than the 3.1% observed in the previous month and close to the rate observed at the end of the first quarter. Overall, inflows into broad money in the second quarter were weak. Annual growth in M1 increased further to 3.5% in June, in line with the increased preference of investors for liquid instruments in an environment of low interest rates and high uncertainty.

The annual growth rate of loans to the private sector (adjusted for loan sales and securitization) declined to 0.3% in June (from 0.5% in May). As net redemptions of loans to non-financial corporations and households (both adjusted for loan sales and securitization) were observed in June, the annual growth rates for loans to both non-financial corporations and households (adjusted for loan sales and securitization) decreased further in June, to -0.3% and 1.1% respectively. To a large extent, subdued loan growth reflects the current cyclical situation, heightened risk aversion and the ongoing adjustment in the balance sheets of households and enterprises, all of which weigh on credit demand. A considerable contribution of demand factors to weak MFI loan growth is confirmed by the euro area bank lending survey for the second quarter of 2012. This survey also shows that the net tightening of banks’ credit standards at the euro area level was broadly stable in the second quarter of 2012, as compared with the previous quarter, for loans to both enterprises and households.

Looking ahead, it is essential for banks to continue to strengthen their resilience where this is needed. The soundness of banks’ balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalization of all funding channels.

To sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term. A cross-check with the signals from the monetary analysis confirms this picture.

While significant progress has been achieved with fiscal consolidation over recent years, further decisive and urgent steps need to be taken to improve competitiveness. From 2009 to 2011, euro area countries, on average, reduced the deficit-to-GDP ratio by 2.3 percentage points, and the primary deficit improved by about 2½ percentage points. Fiscal adjustment in the euro area is continuing in 2012, and it is indeed crucial that efforts are maintained to restore sound fiscal positions. At the same time, structural reforms are as essential as fiscal consolidation efforts and the measures to repair the financial sector. Some progress has also been made in this area. For example, unit labor costs and current account developments have started to undergo a correction process in most of the countries strongly affected by the crisis. However, further reform measures need to be implemented swiftly and decisively. Product market reforms to foster competitiveness and the creation of efficient and flexible labor markets are preconditions for the unwinding of existing imbalances and the achievement of robust, sustainable growth. It is now crucial that Member States implement their country-specific recommendations with determination.”

Fed Chief Bernanke Q&A bullets by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Tuesday, July 17, 2012

 

 

:NY FED was aware of banks under reporting to improve strength of bank.Not aware traders collaborating for profit until reported

: Will not endorse a specific spending program. But is recommending a plan that does reduce spending over time.

: Fiscal shock analysis of all 2001/2003 tax cuts. Not just tax increase on 250k+ earners.

: The world is in an easing period. FED not only central bank using these methods.

:Global slowdown emanating from Europe. Slowing in Asia as well. Global economy slowing. Not nearly as bad as the crisis period.

: Try to create favorable tax, credit and regulatory environment to help start ups. Does not have a program to suggest how.

: Start Ups are a generator of new jobs/employment. Lack of credit availability may be having negative impact.

: EU trying to establish angle bank regulator. Could take well into next year to accomplish.

: his major economic concern for US. 2 issues: 1.EU debt issue (hopes EU solves it) and 2.Fiscal cliff. (Hopes congress solves it)

: could change LIBOR from reported rate to openly traded...would be very difficult to transition

: Less conventional tools available for FED to meet dual mandate, but has other tools.

: tells to take whatever actions warranted to encourage employment and economic growth while keeping inflation low.

: putting off fiscal cliff would be very bad. (Don't kick can down the road)

: seriously concerned fiscal cliff spending reductions and tax code will be negative

: Household spending growth continues, may be slowing. (yesterdays retail sales numbers might be a hint of SLOWING)

Fed Chief Bernanke Q&A bullets by Ryan C. Rogers, RMR Wealth Management

RMR Wealth Management - Monday, June 25, 2012

 

 

 

Bernanke: Fed will not buy European sovereign debt.......Other than the European sovereign debt they already own.

Bernakne: additional steps available for central banks, BUT they are not understood and they have costs and risks!!!!!!!

Bernanke: doing more means........he's not really sure.

Bernanke: prepared to protect US financial markets and economy if HOPE doesn't work out.

Bernanke: VERY HOPEFULL Europe policy makers get it right

Bernanke: HOPES europe doesn't get worse.......

Bernanke: Volker rule positive....could have prevented JP Morgan $2 bil loss

Bernanke: won't comment on Volker rule release

Bernanke: plenty of securities available for fed to buy

Bernanke: Blames rest of world(EU,Japan,etc) for slow growth in US. Plus housing market. And finally state and local fiscal governments.

Bernanke: Fiscal Cliff is the problem of congress. Hopes they don't kick can down the road...........

Bernanke: World central banks consulting with each other....not coordinating........

Bernanke: all steps taken by FED and EU have risks associated with them.

Bernanke: federal reserve non-partisan............

Fed Chairman: incoming data since last meeting largely disappointing


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