asset prices

Asset prices will have been rising, and whatever new financial instrument that comes along will look as if it is safe.

Until credit starts flowing again and asset prices stop plunging around the world, he said exchange rates will remain volatile.

And yet the bank is still holding rates close to zero, and is pursuing a second round of QE to prop up asset prices.

Number two, at 11%, was a sharp fall in the U. S. dollar; number three was a 'blow up in asset prices. '

And a severe plunge in asset prices, even if it makes no sense in terms of fundamentals, tends to deplete that capital.

We never claimed to have found a solution to the problem of monetary policy and asset prices, but we tried hard.

'This is the beginning of another big and excessive run-up in asset prices, ' said Simon Johnson, a former IMF chief economist.

Under quantitative easing, it is possible to have rising asset prices and large output gaps, ' the note said.

China is Exhibit A. With a vigorous domestic recovery under way, China ought to tighten soon, before asset prices bubble out of control.

The bubbly asset prices, ever easier credit and cheap oil that fuelled America's age of consumerism are not about to return.

The bank said China needs to watch for volatility in asset prices and prevent price swings from affecting market confidence and the economy.

While we have known for months that the Fed was targeting asset prices with QE, it really is shocking to hear it enunciated so clearly.

Put together falling asset prices, rising defaults and tighter credit and it is hard to see how the economy will bounce back quickly.

In a crisis, haircuts typically rise as short-term lenders attempt to protect themselves from possible declines in asset prices.

This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while.

Ageing, at least in the short term, is fairly predictable, so markets may have already discounted its impact on asset prices.

Low rates also boost asset prices, giving companies the collateral with which to borrow and banks the capital with which to lend.

Falling asset prices could bring back an old problem that many thought had been conquered: bad debts in the banking system.

There is no doubt that the asset prices have an important bearing on monetary and financial stability.

The boost to asset prices is enhanced by the adaptive nature of investor expectations.

the difference between the random walk fluctuations of correct asset prices and the unpredictable wanderings of a drunk are not discernable.

Indeed, rising asset prices will help boost consumer spending over the next year, which will in turn help broaden China's recovery.

The fact that many asset prices around the world are below fundamentals creates a parallel opportunity in the current global crisis.

Ample credit also tends to feed into spending and asset prices. That makes people feel richer.

Is not a listed company is likely to be a net asset prices or slightly higher prices.

Higher asset prices mean households feel wealthier and better able to spend, which could further fuel the region's nascent economic rebound.

However, he predicted "better returns for all the money we do put to work" , amid falling asset prices and less competition.

Too late would mean that the fall in asset prices has to be so large that it skittles economic recovery.

Great fluctuation in virtual asset prices exerts an enormous impact on the total amount of capital in substantial economy.

or prices of goods and services are pushed up to the level consistent with high asset prices, in which case there is inflation.

Bloomsbury banked a lot of the money, and has taken advantage of the slump in asset prices to pick up specialist and scholarly publishers.

Mr Booth wrote that when central banks held interest rates down, asset prices rose and bad risks began to seem good.

Conway added that asset prices did not reflect grim economic realities globally, according to the paper.

As the liquidity crisis deepened, asset prices began to fall sharply.

All of these only work when foreign portfolio funds cannot influence asset prices, and when locals have nowhere else to go.

As asset prices continue to recover, banks can have more confidence their capital bases are enough to cover likely bad assets.

The fluctuation of asset prices has always been an important research direction for Financial Economics.

Under this setting, the priority might be not to impede the fall in asset prices.

Beyond that, in this crisis, asset prices have already fallen by enough to erase more than a third of global wealth. U.

"We are also concerned that if capital flows were to reverse or interest rates rebound, asset prices would become more volatile. "

It also tightened rules for residential home loans, saying a 'sharp rise in asset prices in such a short time causes concern. '

And with demand for money in the real economy still weak, these funds are tending to go into financial assets, reigniting asset prices.

Bank lending is growing too fast , which may be fine if it is flowing into useful investments, but not if it is fuelling asset prices .

But it may also prolong the period necessary for asset prices to reach their natural floor, dragging out the crisis.

The lending has helped push up asset prices, particularly property; the nationwide index is 9. 1 per cent rate higher than a year ago.

But asset prices are probably as cheap as they are going to be and interest rates are low.

If asset prices could be relied upon to always be "right" , then these bubbles would not occur.

sixth , is to set the asset prices as an important reference for macro-control.

A resolution will require more of a correction in asset prices than a further depreciation of the dollar.

Macroeconomic data alone cannot provide sufficient information to determine whether asset prices are inflated.

In periods of growth, it raised interest rates slowly, if at all, stubbornly refusing to acknowledge the course of asset prices.

A decline in interest rates due to a lower probability of default should support investment and asset prices.

Funds should be able to make good money in the future if asset prices fall far enough and high-yield markets regain some poise.

Fiscal stimulus is a necessary palliative for a debt-encumbered economy afflicted by falling asset prices.

Switching to dividend yields or asset prices as a valuation measure does not eliminate the problem.

The other bears agree, and see the recent market rally as simply the authorities' latest attempt to prop up asset prices.

This thesis studies the relationship between the monetary policies and the asset prices theoretically and empirically.

Job cuts, slumping asset prices and a worsening credit drought augur ill for consumer spending too.

Eventually, the bubble bursts and asset prices collapse, leading to a reversal of the feedback loop.

In light of the recent surge in asset prices worldwide, this issue needs urgent attention.

The fact that many asset prices are far below fundamentals creates a parallel opportunity in the current global crisis.

That lending depends on securitization which in turn depends on stable and eventually higher asset prices than currently exist.

Unemployment is higher than would be expected given both overall economic activity and the recovery in asset prices.

In the bust many borrowers have had to find more collateral to offset falling asset prices.

The debate heated up when soaring asset prices swelled the coffers of many funds, turning them into big participants in global markets.

Donna Kwok, an economist with HSBC, predicts that asset prices will continue to be "doused in gasoline" .

This attempt to boost asset prices by money creation was ultimately doomed.

This bids up asset prices for everyone else, forcing them to save more as well.

The fluctuation of asset prices and its financial risks have become the main "enemy" of central banks.

and a levy would harm the liquidity of financial markets, making asset prices more volatile.

Authorities should monitor substantial changes in asset prices and their implications for the macroeconomy and the financial system.

Other asset prices move according to what the Fed does with the money from diluting the dollar.

This simultaneously pumps up asset prices and obscures their speculative nature, with euphoria usurping the place of analysis.

Then chapter two illustrates The Theory and Practice of the Monetary Policy's Intervention to the Asset Prices' Fluctuation.

America's current account deficit is due more to bubbles in asset prices than to a misaligned dollar.

Yet in the long run, creating money to prop up asset prices is not a sustainable tactic.

The bubble did not only inflate asset prices, it also inflated pay.

This, it is argued, has had powerful effects on asset prices, particularly house prices in a number of high-income countries.

Falling asset prices, a broken financial system and tumbling output have driven private savings up and investment down.

Back then the financial system was crumbling, asset prices and inflation expectations were depressed and Fed had much more wiggle room.

When the crunch ultimately came, there was a severe dislocation in asset prices.

Bank lending should also be constrained during periods when asset prices are booming - when the froth is piling up.

The financial asset prices play a more important role in the formulation of the monetary policies.

The problem is not the rising asset prices themselves but rather their effect on the economy.

While construction activities slowed, consumer spending dropped in response to higher interest rates and falling asset prices.

A high level of bank liquidity, low interest rates, the improved employment situation and a rebound in asset prices all act to lift demand.

So deflation in asset prices can turn into a vicious circle.

Remarkably, cortisol increased in direct correlation to implied volatility, a measure of expected future variance in asset prices.

yields or asset prices as a valuation measure does not eliminate the problem.

In other places a net inflow of foreign funds can lead to both a rise in asset prices and a rise in the value of the local currency.

History will not repeat itself exactly. But bubbly asset prices do risk overreaction from rich-world central bankers.

When credit is artificially cheap and asset prices are rising, banks have enormous incentives to circumvent capital requirements.

These models mistakenly assume that the volatility of asset prices and the correlations between prices are constant, says Mr Scholes.

Because of the lack of this option, tempering asset prices is the only option.

If inflation expectations, and risky asset prices, keep sliding, then some form of QE3 becomes possible.

They should also ignore asset prices and deal only with the economic consequences of an asset price bust.

Even if some gain from falling asset prices, lenders and insurers have to book losses, which leaves them needing money.

'Asset prices, real estate and stocks collapsed. Returning to normal would be a big price appreciation. '

Fiscal stimulus and the wealth effect of rising asset prices can provide only a temporary prop to domestic spending.

While QE has boosted financial-asset prices, though, U. S. house prices remain moribund and unemployment, while improving, remains high.

But most interesting was what Ma said next: 'Rising asset prices pose a challenge to macroeconomic policy, especially monetary policy. '

Macroeconomic policy needs also to address asset prices, credit expansion and imbalances between sectors and economies.

This would reduce the likelihood of higher future taxes, thereby raising asset prices and expectations of household incomes and wealth.

Cash-rich Chinese companies are on a buying spree again, hoping to take advantage of low asset prices.

The answer is a matter of avid curiosity, particularly among hedge funds that take big bets on international asset prices.

Australia isn't the only country fretting about asset prices.

Such capital flight could trigger sharp falls in asset prices, with potentially severe corrections in the stock market and property prices.

Today, the concern has shifted to maintaining growth in the face of plummeting exports and asset prices.

Those asset prices then collapsed and many households are now desperately attempting to pay down their debts.

Given the explicit government guarantee behind the banking system, central banks need to monitor both financial stability and asset prices.

The crisis, and falling asset prices, "open up a significant part of the world, " he adds.

I would also support measures that directly limit the leverage among borrowers, as asset prices soar, particularly house prices.

Asset prices and inflation will be monitored closely by the central bank, but not used as an immediate basis for capping loans.

Also, commodity prices are rising, and massive flows of capital attracted to Asia puts pressure on asset prices, especially housing.

The efficient-market hypothesis assumes that new developments are instantly assimilated into asset prices.

Higher asset prices have propped up consumer spending and narrower corporate bond spreads have eased firms' borrowing costs.

With asset prices plummeting and economies shrinking, deflation will soon be a bigger worry.

Both began with a collapse in asset prices following a speculative frenzy.

Beset by scarce credit, falling asset prices and costly food, developed-country households are hardly well-equipped to foot the oil bill.

With the formation of assets market, the relationship between interest rates and asset prices is strengthening.

If asset prices reflect economic fundamentals, why not just model the fundamentals, ignoring the shadow they cast on Wall Street?

How can banks be expected to lend more to re-inflate the economy's asset prices while wages and consumer prices continue to drift down?

Any and all attempts to prevent deleveraging and to prop up asset prices will cause years to be added to the healing process.

The recession has hurt many of Berkshire's businesses, and the drop in asset prices across the board has eroded their capital reserves.

Russian economic growth, foreign exchange reserves and asset prices are sliding dramatically.

The collapsing asset prices triggered capital outflows that reinforced asset deflation.

Why save from income if rising asset prices did your saving for you while you slept?

Some fear that accounting dogma has caused a cycle of falling asset prices and forced sales that endangers financial stability.

Lower interest rates would simply add to the problem, generating higher credit growth, inflation and asset prices.

The fundamental problem in the American economy is that, for years, people treated rising asset prices as a substitute for personal savings.

A ramping up of asset prices to such a degree that a major reversal or crash is expected.

The bulk of the risk sensitivity requirement should be related to the growth rates of bank lending and asset prices.

Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.

Here the big question is what role should be played by asset prices in the formulation of monetary policy.

The impacts of these shocks on asset prices are amplified by bank capital requirements based on mark-to-market.

Second, a number of critics argue that central banks ought to target asset prices because of the huge damage subsequent collapses cause.

Credit dries up, and the economy can enter a vicious cycle of falling asset prices and job losses. That is what began to happen in 2008.

Many investors, however, are betting not just on growth, but on surging asset prices stemming from giant inflows of easy money.

Raising interest rates and cutting spending too soon could easily shock economies and cause asset prices to collapse.

Inevitably, the torrid growth of bank credit and money is spilling over into asset prices, particularly equities.

Turbulent financial markets and falling asset prices are not conducive to stronger consumption.

After five months of battering, Greek asset prices should show an even more promising potential for good-value pickings.

The situation is 'seriously impacting global asset prices and encouraging speculation in stock and property markets. '

Scarce credit hurts asset prices and leaves borrowers prey to the cash-flow troubles of customers and suppliers.

To PIMCO, the remedy for this deflationary delevering and mini-depression is simple and almost axiomatic: stop the decline in asset prices.

The relationship between the asset prices and the monetary policies is also the hot issue in the theoretical field.

Two weeks ago, it looked like financial Armageddon, with the entire world watching the free -fall in asset prices.

Shifting growth patterns could have big consequences for asset prices.

On the one hand, the recent behaviour of asset prices suggests investors are more relaxed about risk than for decades.

Some have argued that central banks caused the global crisis by keeping interest rates low for too long, encouraging asset prices to build.

Jumps in asset prices risk causing premature inflation jitters. Oil prices, especially, pose a danger.

And what will happen to asset prices if the boomers try to cash in their portfolios?

Wishful thinking allowed asset prices to reach absurd heights and pushed risk premiums to incredible lows.

Furious deal making is keeping asset prices buoyant and also cutting the supply of shares available to investors.

As the working-age population rises-as it did, for instance, after the baby boom-asset prices rocket because of increased demand.

Macroprudential supervision and asset prices should both playbigger roles in monetary policy .

Asset prices, whether bonds, equities, or commodities, are comfortably higher now than they were 12 months ago.

But if asset prices continue to climb at their recent pace, central bankers will become increasingly nervous.

After a brief respite in the first quarter of this year, asset prices plunged in the spring, sending shockwaves through global markets.

If so, the Fed should be wary of reading too much into any constellation of asset prices.

If so, central banks may find they have to go further than ever and provide a floor for asset prices in illiquid markets.

For instance, although they have helped keep inflation and interest rates down, they have also encouraged asset prices to bubble up.

One area that monetary authorities watch with increasing intensity is the movement of asset prices.

Policymakers may be starting to worry that asset prices are running up too quickly .

In their paper, "The Geography of Investment: Informed Trading and Asset Prices, " Tobias J.

More fundamental is the challenge to the decision to ignore asset prices in the setting of monetary policy.

This generated excessively high asset prices, particularly in housing.

The resulting excess liquidity is pushing up asset prices, increasing the risk of over-leveraged deals.

And Ponzi borrowers can pay neither interest nor principal from cash flows but rely on rising asset prices to keep going.

Finally, the FOMC indicated that the Treasury purchases would spur the economy by theirpositive impact on asset prices.

Most was due to US consumers saving more in the recession and to falling asset prices.

That risks driving down asset prices, forcing lots of banks to mark down equivalent assets and erode capital.

Then comes a top to the asset prices , panic selling, a credit freeze, mass insolvency and recession .

This provides the theoretical basis for the central bank to intervene the asset prices.

They are angered by the spectacle of the croupier-bankers raking a cut from the rising asset prices.

So says the International Monetary Fund, and in doing so it merely expresses what many, judging by asset prices, already fear.

More often it simply means different rules: central banks need to take asset prices more into account in their decisions.

It is also that the current combination of high asset prices, low interest rates and massive fiscal deficits is unsustainable.

The answer 'will impact the interest rates, it will impact the currency rates, it will impact the asset prices, ' he says.

'Asset prices rising from extreme lows don't suggest a bubble, ' said Allen Sinai of Decision Economics.

Ample liquidity is therefore likely to continue to stoke asset prices.

The value of the dollar, like other asset prices, fluctuates substantially from year to year.

Bonuses only tend to be large when asset prices are rising.

So, if those materialize, and the Fed suddenly looks fallible, asset prices could be hit.

That will shrink these debts in relation to the economy , asset prices and incomes.

In the words of Mr Edwards: "Basing economic growth on loose monetary policy driving up asset prices is simply doomed to failure. "

This "endogenous" process expands the economy's balance sheet and boosts asset prices.

Asset prices are still falling, losses are still mounting, and the unemployment rate has just hit a five-year high.

When asset prices began falling, the models couldn't keep up, with either the pace of declines or the economic damage they were causing.

After the rapid development of capital markets in recent years, the function of asset prices channel in transmission has been emphasized.

Central bankers ignore asset prices at their peril. But dealing with them is not easy either.

In 2008, falling markets caused a vicious circle of debt defaults and fire sales by investors, pushing asset prices down even further.

The second important strand of work on finance was the empirical analysis of asset prices .

Around the world, asset prices are booming.

Thus it is local currency, not foreign "speculative money" that both causes and sustains local asset prices.

This policy put a floor under asset prices and eventually created the conditions for the credit crunch of 2007-08.

For Japan, the end of zero interest rates signals that a "lost decade" of falling asset prices and deflation is well and truly behind it.

Central bankers cannot add asset prices to core and headline to create a single all-encompassing price index.

Bank of Korea minutes released on Tuesday showed its concern about rising asset prices.

It is not surprising that some investors think the Fed is setting a floor under asset prices.

after all, asset prices were rising even faster, so balance-sheets looked healthy.

Some credit asset prices have corrected but broad liquidity remains sound.

Private consumption improved and asset prices rose sharply.

Major G-10 economies became dominated by asset prices and asset-backed lending most clearly evidenced in housing markets.

Section III Which Economic Data Have the Biggest Impact on Financial Asset Prices?

When the cost of capital is zero, asset prices are infinite in theory.

Instead, they asked only whether asset prices made sense given other asset prices.

The central bank's immediate concern is that excessive growth of money and credit can spill into asset prices.

Plunging asset prices affect the private banks' two main sources of earnings.

In the US and elsewhere, asset prices, particularly of housing, also continue to fall.

There also is unease about rising asset prices, especially property.

Over the past 25 years, the cost of finance has been low and asset prices have generally been rising.

In the aftermath of the average crisis, asset prices fall sharply.

Either a lower dollar, or lower US asset prices, or both, would seem the inevitable result.

Who cares if credit spreads narrow, and asset prices--including equities--go up?

Optimism can easily become irrational exuberance: asset prices in some emerging markets have risen too high.

They could go further by suspending capital rules during times of stress if they think asset prices have overreacted.

This hot money, driving up domestic asset prices, is disturbing enough.

A financial crisis is heralded, in fact defined, by sharp discontinuities of asset prices.

If asset prices go up, that means people with assets are richer, and have made money in the markets.

Second, the Fed wanted to push up risky asset prices and thus stimulate investment.

When asset prices are going up, most people are inclined to celebrate.

Fourth, we must look more closely at how monetary policy interacts with the financial sector and asset prices.

Indeed, the wealth effects of higher asset prices will help lift spending.

This is the phenomenon of strong asset prices with a large output gap, says Nomura's Asian equity strategist.

By contrast, rising asset prices tend to be seen, within limits, as a cause to buy.

This has resulted in longer expansions with more growth in debt and asset prices.

But elsewhere central bankers will react more swiftly to asset prices than they did before the crisis.

One reason for this is the impact on money, credit and asset prices of their huge accumulations of foreign currency reserves.

mism can easily become irrational exuberance: asset prices in some emerging markets have risen too high.

Chapter 4 Analysis the impact of asset prices on commodity prices by the excess money supply.

The central bank's concern is that excessive growth of money and credit can spill into asset prices.

I believe that US asset prices will finally bottom out when the treasury bubble bursts, possibly in 2010.

The more confidence weakens and asset prices fall, the more eager is the rush into cash.

They are a result, because excessive private sector debt interacts with weak asset prices, particularly of housing, to depress demand.

A collapse in asset prices purchased through debt will have a far more devastating impact than the same collapse accompanied by little debt.

If this stimulus is delayed or withdrawn, we will get significant drops in asset prices and go back into recession.

According to financial asset prices causality of cross-listed stocks, there are Home Bias hypothesis and International Center hypothesis.

As the world's central banks tamed inflation, interest rates fell and asset prices rose (see chart 2).

But when asset prices started to fall, the whole system unravelled.

A sharp decline in asset prices is necessary to rebalance the US economy.

Real asset prices, such as those of equity and real estate will be pushed higher, if only as hedges against the impending inflation.

Debt levels are fixed in nominal terms whereas asset prices can go up or down.

They have houses and shares, so their wealth is diminished by falling asset prices.

This too would cause local asset prices to become less appealing.

Without a sustained fall in asset prices, it is unclear whether they will make back much more than they spent.

It is the link between speculation and asset prices that explains this crisis.

Experience suggests it can drive asset prices well above the levels that cautious investors are willing to stomach.

Central bankers ignore asset prices at their peril.

Not only can asset prices be valued; they have to be.