Blizzard Nemo weekend in the Northeast–over/under was 3 feet…
The ECB’s $26T balance sheet started shrinking in 4q12, but QE4 has offset the retrenchment with 6.7% growth in the Fed’s $3T balance sheet.
[Eurocrisis faintly reemerged this week as Italy heads toward elections (Feb 24-25), and former PM Silvio Berlusconi gains ground on incumbent Mario Monti.]
The island dispute between China & Japan | Triple Crisis
Full background and counterfactual regarding the Chinese v. Japanese political/military/diplomatic conflict regarding sovereignty over Diaoyu & Senkaku islands.
Rail traffic weekly: Modest w/w improvement, but weak start to the year remains | Association of American Railroads (AAR)
Carloads -6.3% and Intermodal +5.3 (cumulative ytd volume y/y); -3.4% and +7.2 respectively (vs. this week last year).
8 of 20 carload groups posted gains: Petroleum products +52.3%, lumber +26.5 & farm products +18.7; metallic ores -22.4%, grain -15.7 & minerals -12.1.
[Modest improvement from last week, but still a poor start to the year–even considering calendar effects.]
Student loan bubble forces Yale, Penn & GW to sue their own students | Zero Hedge
Perkins loans for low-income students are federally subsidized but allow schools to negotiate restructurings directly with students (as opposed to Stafford loans, which payments are income-based and settled in bankruptcy court). After $964mm in 2012 defaults (+20% y/y), schools are litigating because the next generation’s loans are financed by return on the current capital pool.
Regardless, Obama plans on raising funding from $1B/year to $8.5B.
Scientists print 3D object using stem cells | Business Insider
Using special valve-based 3D printers with “bio ink,” scientists fashion human tissue, which Human Embryonic Stem Cells (hESCs) indefinitely replicate.
[Related: Print your own medicine | Lee Cronin]
Argentina freezes supermarket prices to stop soaring inflation | Zero Hedge
“First capital controls (2/2012), then a currency crisis (6/2012), [then an IMF censure for false inflation reporting,] then expectations of sovereign default (11/2012), then military tensions, and now price controls.”
Freeze will last until April 1, trying to halt 30% inflation forecast. 360% stock rally since 1993 is -9% adjusted for FX.
$USDARS $WMT #PaulSinger
Senior loan officer survey (January 2013): Credit demand increased & lending standards relaxed | Federal Reserve (Fed)
In 4q12, net demand for loans increased (specifically business loans/prime residential mortgages/auto loans) & banks relaxed lending standards (especially consumer credit/auto loans/prime residential).
Japan’s Government Pension Investment Fund considers reallocating government bonds | Bloomberg
Public GPIF ($1.2T AUM) considering cutting its 67% strategic allocation to JGBs as BOJ & PM Shinzo Abe have pledged higher inflation; would reallocate to emerging market equities & alternatives.
Discussions begin April/May, changes go into effect end of FY14.