| Fed Should Heed Lessons of 1920s: Grant and Chinas VP Visits U.S.: Expect More Talk, Less Action Says Zachary Karabell |
| News - Financial News |
|
The U.S. has been "overmedicated"by public policy and should consider the government's 1920'sresponse to recession, said James Grant, editor of Grant'sInterest Rate Observer.Responding to a severe economic downturn from 1920 to 1921,the Federal Reserve increased interest rates and the nationalbudget was balanced, moves that kept the painful recessionshort, New York-based Grant said. In contrast, he said U.S.policy makers are prolonging the pain of the so-called GreatRecession by intervening in markets and running unprecedentedfederal budget deficits."The Fed is not content to let interest rates find theirlevels, they must repress them, and they are not content to lethousing prices find their levels, they seek to intervene to propthem up," Grant said in a radio interview on "BloombergSurveillance" with Ken Prewitt and Tom Keene. [Read the full article] The rule -- which has been in place for more than a year, according to e-mails obtained by CNNMoney, but is being reported here for the first time -- has caused dissent in Twitter's ranks.It directly led to the departure of Twitter's senior technical engineer, Evan Weaver, who resigned in August. In an e-mail that went to all Twitter employees, Weaver said he quit over "policy disagreements" with the company.The policy at issue was Twitter's 20% stock sale restriction, according to several people with knowledge of the discussions. Weaver, who is currently working on his own startup, declined to comment on the matter.Weaver's missive prompted a quick response from CEO Dick Costolo, who sent out his own all-staff e-mail later that day laying out Twitter's reasons for imposing the limit.When companies have more than 500 shareholders owning one class of equity shares, the SEC requires the business to begin disclosing its financial results. [Read the full article] Those billions flying out of mutual funds this year are finding a home in exchange-traded funds, where they're riding a rally and fueling a trend that market pros say is here to stay.ETFs have gathered $8.3 billion in new funds so far in 2012, while their actively managed cousins have seen nearly identical outflows of $7.9 billion.Though one of the main investing themes this year is a clear rotation away from the things that worked in 2011 and towards the things that didn't work, the trend toward index funds has continued unabated, propelled especially by the market's mostly straight-line path higher."This is really about the clients being aware of cost efficiencies," says Julie Casserly, president of JMC Wealth Management in Chicago. [Read the full article] 
|