Risk and Return

While spending increased in March by 1.8% over a year ago, adjusted for inflation it was way down. The only reason sales were positive was gasoline, though food sales were positive. Even there, that is mostly due to inflation and rising prices of food and staples.

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Bad news for the monolines. FGIC just got downgraded today to AA. That pretty much puts them out of the business of insuring municipal bonds.
NYS Commissioner of Insurance has suggested splitting the Muni bond business from the rest of the insurers. FGIC seems to now think that isn’t a bad idea. Of course, since Elliot [...]

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Contra David Merkel, Amity Schlaes says a choice can be made, and Bernanke’s worry should be inflation.
Update: David left me a comment, so I am going to include it, and my response:
I’m not saying regulators won’t be forced to make a choice, or what that choice might be. My opinion on what should be done [...]

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Like me, Barry Ritholtz sniffed a whiff of panic in the Fed’s actions yesterday. The question he asks is why they acted before their meeting. Here are his questions, all good. I have pretty much stolen the whole post. Hopefully Barry will not mind:
What does this mean for investors. Quite a number of things – [...]

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Reader ChrisB asks in response to yesterdays link to Anna Schwartz’s comment on the Federal Reserve:
In retrospect, what should the fed have done differently?
Risk and Return is really about implications for investment policy, and thus identifying which factors have implications is key. Pumping for particular policy choices really isn’t our role. Still, in identifying what [...]

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Can I ask for some applause for this from Crossing Wall Street?
I have to agree with Frederic Mishkin of the Fed:
I think there is too much focus on what decision will be made about the federal funds rate target at the next FOMC meeting. What is important for pricing most financial assets is the path [...]

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