BP’s 2005 Statistical Review of World Energy was published in June. CS highlights a few of the ugly details in the Research Room.
Monthly Archives: June 2005
INTEREST RATE RISK? WHAT INTEREST RATE RISK?
Interest rates are the “greatest risk” facing the stock market, according to a freshly minted survey of money managers. “The managers rate interest rates above geopolitical events, inflation worries and increasing energy costs as their major source of concern,” according to Frank Russell Company’s June 2005 Investment Manager Outlook. “But they believe higher rates will have a stronger impact on bonds, U.S. Treasuries and real-estate securities—on which they are uniformly bearish—than on stocks.”
DOES THE DOLLAR RALLY HAVE LEGS?
Few expected it, but the dollar rallied just the same. In the wake of the currency’s volte-face arises the question, Is this a dead-cat bounce?
BACK & FORTH, TO & FRO
The frontline in the debate over pricing bonds can be found in the analysis of two opinionated pundits. In the bulls’ camp is David Malpass, chief economist at Bear Stearns, who argues in an op-ed in today’s Wall Street Journal (subscription required) that the “U.S. expansion has been strong and steady despite the warnings of fragility, the repeated claims of a slowdown, and the fear of China (as intense as the Japan fears of the 1980s).” Taking the opposing view is Bill Gross, chief investment officer of Pimco, the giant bond shop in Newport Beach, Calif. “This recovery is different,” Gross writes in a newly published essay, “because it was spawned and subsequently nurtured on the back of asset appreciation alone.”
WE’RE ALL SWISS NOW
Forget the Fed. America’s saviour awaits in another Paris Air Show.
ALL THE WORLD’S A STAGE FOR OIL ACQUISITIONS
Treasury Secretary John Snow and others in Washington have been eager to boost American exports, but the proposed sale of the El Segundo, Calif.-based oil firm Unocal Corp. to China’s state-owned CNOOC Ltd. isn’t quite what they had in mind.
A DIP BELOW 4%
The bond market has its story and it’s sticking with it, namely, an economic slowdown is coming. That, at least, seems to be the message in yesterday’s dip below 4% for the yield on the 10-year Treasury Note. That’s the first slip below that mark since June 9.
RESEARCH ROOM UPDATE
Can the euro dethrone the dollar as the world’s reserve currency? The recent strength in the buck suggests otherwise, but a working paper from two professors say the unthinkable could in time become thinkable if two conditions are met. For the details, take a look at the latest addition to the CS Research Room.
WHAT’S UP WITH GOLD?
Gold is money, say the metal’s fans. But that doesn’t necessarily mean it has a life of its own. Or does it?
THE KINGDOM OF HOPE
Saudi Arabia, home to the world’s greatest proven reserves of oil, claims it can double its current production. No mean feat, considering that the roughly 11 million-barrels a day (b/d) that it claims it currently pumps is just about the highest in the desert kingdom’s history. History, in other words, offers no guide to the future on this matter, according to authorities who oversee those reserves. As such, elevating Saudi production to 23 million b/d in the years ahead is well within the country’s capacity, according to Abdallah S. Jum’ah, president and chief executive of Saudi Aramco, the planet’s biggest oil company, albeit one run by a government.