28 February 2013

Opposition to Bond Buying, Political Paralysis in Italy, Market-Stability Theories Flawed

Posted In: Economics

Here are some of the most popular stories from this week’s CFA Institute Financial NewsBrief.

Opposition to Continued Bond Buying Grows within Fed
Federal Reserve policymakers increasingly are arguing that the central bank’s bond-buying program should be scaled back or shut down before the unemployment rate declines significantly, according to minutes of the Fed’s January meeting. News that the Fed is leaning toward withdrawing stimulus sent markets tumbling. Bloomberg, Reuters, New York Times

Protest Vote Drives Italy Toward Political Paralysis
None of Italy’s political parties had enough votes to form a government after the general elections, raising the prospect of a deadlocked parliament unable to deal with the prolonged recession, unemployment and public debt. Italians angry about government corruption and their own economic hardships handed in a huge protest vote to a fledgling, anti-establishment populist movement. Investors fear that a leadership vacuum could create a debt crisis. Adnkronos International (Italy), New York Times, The Independent (London), Reuters

Analysis: Economists’ Market-Stability Theories Are Flawed
The financial crisis demonstrated that an assumption by developed-world economists that markets are naturally stable and optimal is out of touch with reality, Harvard Business School research associate Jonathan Schlefer writes. Latin America and Asia took a more pragmatic approach to financial and economic policy and, as a result, largely escaped harm, Schlefer writes. Harvard Business Review

Advisers: Wait Until Retirement to Put Funds in Roth IRA
Some financial decisions are best made through procrastination, and deciding when to move savings into a Roth individual retirement account is one of them, advisers say. Waiting until retirement to shift funds usually results in a lower tax rate than making the move during midcareer, they say. Reuters

FBI Looks into Possible Insider Trading in Heinz Options
The FBI said it was investigating suspicious trading in H.J. Heinz options before the announcement of the company’s acquisition by Warren Buffett’s Berkshire Hathaway and Brazil’s 3G Capital. Options traders noticed unusual activity the day before the deal was made public. Reuters

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About the Author(s)

Jennifer Curry

Jennifer Curry formerly served as managing editor of the Enterprising Investor. Previously, she was the social media manager at the New York Society of Security Analysts (NYSSA). Prior to her work at NYSSA, Curry worked as the senior project editor for a nonfiction imprint at Barnes & Noble Publishing and as an assistant editor at the H.W. Wilson Company. She is the editor of several volumes in the Reference Shelf series, and her writing has appeared in Smithsonian, IndustryWeek, Barnes & Noble Review, and other publications. Curry holds a BS in journalism and a BA in anthropology from the University of Kansas, and an MA in anthropology from Hunter College, City University of New York.