The yield paid by the government’s 10-year Treasury note, the most prominent market rate, was down on Friday from 3% at the end of December, after the U.S. Federal Reserve began easing back on policies that keep interest rates low.
(Source: Wall Street Journal)
This graph shows why Deflation is a bigger worry in Europe right now.
While it’s difficult to distinguish cause from effect between these two monetary indicators they both point towards deflation in Europe. The latest reading from February showed that the 3-month average of M3 money supply growth in the Eurozone remained 1.2% Y/Y. Ostensibly the Germans oppose balance sheet expansion because it is inflationary in nature. Conversely, balance sheet contraction is deflationary in nature; it’s just a matter of picking your poison.
(Source: Bloomberg & GBI)
New York City’s population hits a new record, according to an estimate released Thursday by the U.S. Census Bureau.
(Source: Wall Street Journal)
Some number highlights copied from the Forbes article below:
The past year Sequoia’s scrappy methods have produced the firm’s biggest gains ever. A record nine Sequoia partners appear on the FORBES Midas List of the most successful venture capitalists, thanks to the firm’s lucrative investment in companies such as Airbnb, Dropbox, FireEye, Palo Alto Networks, Stripe, Square and WhatsApp. At the No. 1 spot is Sequoia partner Jim Goetz, who backed WhatsApp in 2011, well before Facebook agreed to buy the mobile-messaging company for $19 billion. Leone ranks No. 6, followed by colleagues Michael Moritz, Alfred Lin, Roelof Botha, Neil Shen, Michael Goguen, Bryan Schreier and Kui Zhou.
Consider Sequoia Venture XI Fund, which in 2003 raised $387 million from about 40 limited partners, chiefly universities and foundations. Eleven years later Venture XI has booked $3.6 billion in gains, or 41% a year, net of fees. Sequoia’s partners stand to collect 30%, or $1.1 billion, while limited partners get 70%, or another $2.5 billion. Look for even more outsize returns from Venture XIII (2010), which is up 88% a year so far, and Venture XIV (2012). The latter two will split the $3 billion or so Sequoia takes home from the WhatsApp deal. Add it up and Sequoia is turning its own partners into billionaires while keeping outside investors purring.
(Source: Forbes)
The International Monetary Fund said it has reached a deal to lend up to $18 billion to Ukraine as part of an economic reform program that Ukrainian officials said would require “painful” change.
(Source: Wall Street Journal)
About one million children under the age of 15 contract tuberculosis around the world each year, twice as many as previously thought, according to a study from researchers at Brigham and Women’s Hospital and Harvard Medical School.
(Source: Wall Street Journal)
It is possible if history repeats itself like in the past from 1994 to 1999, when both the markets and the “fear gauge” moved higher together. Are we entering a similar period again?
(Source: Schwab and Business Insider)
The total number of defective medical devices recalled in the U.S. rose to 1,190 in 2012, up from 604 in 2003. There was a sharp increase in recalls where the product carried a reasonable probability of death.
(Source: Wall Street Journal)
This was the first meeting for Janet Yellen to preside as Chairwoman, but it is also one with some unfilled seats. While there is plenty of uncertainty with many of the voting members in 2014, we think that the overall composition of the FOMC is likely to be more hawkish this year. While we don’t expect a significant change to current policies in the near term, we think that the changes at the Fed could mean we’ll be hearing differing views in the year ahead.
The Fed’s slower pace of bond buying means that its influence on Treasury yields will continue to decline, while the pace of economic growth and inflation prospects are likely to play a larger role in setting policy. We don’t see the shift from the numerical threshold of 6.5% unemployment to more qualitative information is all that different from the Fed’s previous approach. It allows the Fed more flexibility on policy, but may make it more difficult for investors to assess the Fed’s next steps. Treasury bond yields initially moved higher in reaction to the Fed’s statement, perhaps because of the indication that interest rates might move up more quickly once rate hikes begin. However, in her press conference, Yellen explained that the Fed remains committed to reducing unemployment and keeping inflation in check. All in all, our view is that the Fed is still committed to a “measured” approach to changing policy.
