Noted For Your Thursday Morning Ruminations – March 19, 2015

Here is what I found around the net interesting. Hopefully you will also find these useful and informative.

1. Yellen Strikes a Dovish Tone – Note that the Fed is capitulating here. The distance between the bond market and the Fed rate expectations has been something of a conundrum for policymakers.  But it is now clear the bond market is not moving toward the Fed; the Fed is moving toward the bond market.  Going forward, they still believe that their rate forecast is accommodative. Based on the new estimate of NAIRU and New York Federal Reserve President William Dudley’s recent estimate of the equilibrium rate, they are correct:
2. David Levine’s accidental Monetarism – And the neat thing about money is that it can circulate round and round the Wicksellian circle forever, with nobody every stopping to ask “Hey, do I really want this intrinsically worthless bit of paper?”, because each person knows that the next person will accept it in turn. And because using money reduces transactions costs, people will hold money temporarily even if the real rate of return on holding money is negative (as long as it is not negative to a Zimbabwean extent).
3. Citigroup will not appeal U.S. court ruling blocking Argentine bond payments – Citigroup’s decision to sell parts of its custody business or end some of its client relationships is without precedent in Argentina, some bankers said.
4. Merkel to Seek Accommodation With Tsipras in Talks – After weeks of sparring between Greece and Germany, Merkel is pursuing the talks now to try and get the discussion back on track, the official said. Any suggestion that she will deliver an ultimatum to Tsipras is complete nonsense and propagated by those who want to inflame the standoff, the official said.
5. Why the Yen’s Slide Isn’t Bringing Japan’s Factories, Jobs Back – Prolonged bouts of yen strength became a feature of the two decades of Japan’s economic stagnation before Abe took office for a second time in 2012. The prime minister championed a reflation program and installed monetary expansionists at the central bank who sent the yen tumbling. The currency has fallen 36 percent against the dollar since Sept. 26, 2012, when Abe became the leader of the Liberal Democratic Party.