Markets News Regulators 

Yellen says future economic downturns likely to require further use of unconventional policy

“Yellen anticipates more QE rather than wiggle room in interest rates” reports forexlive.com. If we are indeed living in a low-neutral-rate world, a significantly less severe economic downturn than the Great Recession might be sufficient to drive short-term interest rates back to their effective lower bound.”. Even more dovish/cautious tones from Yellen but markets were closed when she made the speech so we should expect some USD-negative sentiment when Asian markets re-open. Source: forexlive.com Share This:

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What are mortgage points, and should you pay them?

“The origination fee is tax-deductible if it was used to obtain the mortgage and not to pay other closing costs” writes Bankrate Com for seattletimes.com. The more points you pay, the lower the interest rate on the loan, and vice versa.Points as prepaid interest reduce the interest rate, an advantage if you plan to stay in your home for a while.A lender might offer you a 30-year fixed mortgage of $165,000 at 6 percent interest with no points. Source: seattletimes.com Share This:

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Countries with the highest pollution deaths, mortality rates

“The countries with the most pollution-related deaths, and those with the highest rate of such deaths” writes The Associated Press for seattletimes.com. Based largely on 2015 data from the Global Burden of Disease, the report estimates that at least 9 million premature deaths were caused during the year by diseases from toxic exposure.While the highest death tolls were reported mostly in Asia, the highest rates of pollution-related mortality were seen in Africa. Here are the countries with the highest number of pollution-related deaths and the highest pollution-related mortality rates. 10…

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Trump: GOP tax reform plan is ‘a great bill’

“In order for the House Ways and Means Committee to introduce tax reform legislation, Congress must approve a final version of the fiscal-year 2018 budget” writes Megan Henney for foxbusiness.com. Currently, the individual tax rates would be 12%, 25% and 35%, and experts anticipate the fourth bracket to fall somewhere between 35% and 39.6%.It would also simplify personal tax brackets, collapsing the number from seven to three or four.The plan doesn’t set the income levels at which the rates would apply, so it’s unclear how families would be affected or…

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US long-term mortgage rates fall; 30-year at 3.88 percent

“Mortgage buyer Freddie Mac says the average rate on 30-year, fixed-rate mortgages fell to 3.88 percent from 3.91 percent last week” writes The Associated Press for seattletimes.com. To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.The average fee for a 30-year mortgage was unchanged from last week at 0.5 point.The fee on 15-year loans also remained at 0.5 point. Source: seattletimes.com Share This:

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John Taylor impresses Trump team for Fed chair

“Taylor’s stricter adherence to systematic rules for raising interest rates does not mesh with Trump’s view of keeping interest rates low to bolster asset prices though” writes Brian Schwartz for foxbusiness.com. He’s also known for a paper he proposed in 1993 called the “Taylor Rule,” which was a recommendation about how nominal interest rates should be determined.Taylor met with Trump last Wednesday and he’s become a favorite of Vice President Mike Pence because he believes Taylor represents “sound monetary policy,” according to sources familiar with the matter. Source: foxbusiness.com Share This:

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Markets News Stocks 

Does this market have another 10% to run?

“One is that low interest rates mean stocks are worth more because bonds become less competitive” writes Tim Mullaney for marketwatch.com. Golub has two core ideas, both related to interest rates.The other is that interest rates will rise, but only slowly.There’s a long lists of reasons — low capacity utilization and remaining labor market slack top it — why inflation’s contained.And the rest will come from further growth in stock multiples, he says — the most controversial part of his thinking. Source: marketwatch.com Share This:

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Crackpots and political dunces ruin the GOP’s economic agenda

“Their tax plan might help the common man in the long run by increasing investment and business activity” reports washingtonpost.com. Large corporations would get more than a 40 percent cut in their tax rates, from 35 percent to 20 percent.Middle-income workers will at best see a modest drop in the tax rate they pay, from 15 to 12 percent.It is consistent with the possibility that tax cuts have a mildly positive effect that other factors can defeat. Let’s just hope it doesn’t claim that tax cuts will lead to reductions…

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Math Suggests Inequality Can Be Fixed With Wealth Redistribution, Not Tax Cuts

“In the production cycle, capitalists invest their wealth in production mechanisms, creating employment and products for the workers and returns on this investment for themselves” reports vice.com. If there is too much money concentrated in the production cycle, workers don’t have enough money to buy products and there is a recession. Source: vice.com Share This:

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Fed flunks econ 101: understanding inflation

“One of the newer, more laughable explanations for persistently low inflation is that inflation expectations have slipped” writes Caroline Baum for marketwatch.com. Strangelove approach and learn to stop worrying and live with low inflation and low unemployment.Hence, normalizing interest rates is “on track,” as the headline above noted, even though the relationship — between unemployment and inflation — is decidedly off track.Option #1 involves learning to live with a low, stable inflation rate about 0.5 percentage point below the Fed’s explicit 2% target.Option #2 means taking some additional actions to…

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