Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
Goldman Says JPMorgan Should Break Itself Into Pieces (Hugh Son, Bloomberg) Goldman Sachs has determined that JP Morgan Chase could "unlock value in most scenarios". The company as structured is trading "at a discount of 20 percent or more to stand-alone peers" according to the assessment. Tougher rules have been proposed which will penalize firms for size and complexity. This contributes to the value that could be released if the world's largest investment bank (which competes with Goldman Sachs) and the largest lender in the U.S. were broken up into at least two parts and possibly four or more.
TREASURIES-Long bond yields hit multiyear lows on safety buying (Reuters) The yield on the 10-year U.S. treasury bond traded down to 2.02% today (Monday 05 January 2015) amd closed the day at 2.04% as oil and stocks sold off strongly. The 2% level has been identified as key support for the bond (The Treasury Magnet). The long bond (30-year treasury) saw yield dip to 2.59% with a close at 2.60%, decline of 1.3% since the beginning of 2014. The slope of the 5-year to 30-year yield curve has flattened to 1.03% over the last year from 2.20% a year ago. Steep yield curve slopes are associated with expectation for a strong economy. When the curve completely flattens to no slope (or inverts so that short-term interest rates are higher than long-term) a recession usually follows.
Nobel Laureate Stiglitz Blocked From SEC Panel After Faulting High-Speed Traders (Dave Michaels, Bloomberg) Republican SEC (Securities and Exchange Commission) Commissioner Daniel H. Gallagher has blocked the nomination of Columbia University Economics Professor Joseph Stiglitz who had been proposed for an advisory panel by Democratic Commissioner Luis Aguilar. Stiglitz has said that he thinks HFT (high-frequency trading) is not good for financial markets and the practice should be taxed. Stiglitz's reaction:
“I think they may not have felt comfortable with somebody who was not in one way or another owned by the industry.”
ESPN will be available through a streaming service, no cable required (Cecilia Kennedy, The Washington Post) The cable model for content delivery may be about to die. Dish Network has announced that it will offer an internet streaming service that will deliver ESPN, ESPN2, CNN, TNT, Food Network, HGTV and the Cartoon Network that will be completely separate from its existing cable and satellite packages. This may become known as the epoch when TV left home* to travel with each individual and their personal communication devices (phones, tablets, etc.). The move for ESPN to join other networks such as HBO, Showtime and CBS in the new delivery mode may mark the end of the cable era. The offering will be available through Dish Netwrok's subsidiary Sling TV.
*Of course, TV can come home to the big screen at any time desired by use of a simple USB cable connecting the personal device to the "home base".
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