For every action there is a reaction. Not only is that Sir Isaac Newton’s third law, it’s also a statement about human nature. Unlike physics where causes and effects are near simultaneous, there is a time component to how we interact. In official capacities, even more so. Bureaucratic inertia means a lot more than just resistance to change, it also [...]
Give stimulus a chance, that’s the theme being set up for this week. After relentless buying across global bond markets distorting curves, upsetting politicians and the public alike, central bankers have responded en masse. There were more rate cuts around the world in August than there had been at any point since 2009. And there’s more to come. As Bloomberg [...]
You have to understand, none of this is about money or even bonds. It is all intended for one thing and one thing only: expectations. This has been the fulfillment of Paul Krugman’s long-ago criticism. The way out is to shock the system, he said. It doesn’t even matter, by this theory, what you do. So long as it is [...]
Some further odds and ends of European data. Beginning with Continent-wide Industrial Production. Germany is leading the system lower, but it’s not all just Germany. And though manufacturing and trade are thought of as secondary issues in today’s services economies, the GDP estimates appear to confirm trade in goods as still an important condition and setting for all the rest. [...]
The key takeaway from Europe’s economic data dump today isn’t that the whole Continental economy is poised on the verge of recession, though that’s thrust of what’s being written about most. The reason is simple; this is all highly unexpected in the mainstream. Going by official accounts alone, there was never a hint of trouble before just recently. And many [...]
The popular image of the German industrial machine politics is one which has Germany’s massive factories efficiently churning out goods for trade with the South of Europe (Club Med). Because of the common currency, numerous disparities starting with productivity differences had left the South highly indebted to the North just as the Global Financial Crisis would strike. The aftermath of [...]
You aren’t going to find the worst economic quarter in Singapore’s modern history in either 2008 or 2009. It was actually posted in 2010. During the third quarter of that year, GDP declined by a whopping 11% annual rate. While that’s the biggest contraction still on record, initial government estimates thought it was closer to -20%. Singapore’s Monetary Authority wasn’t [...]
The way I look at the global economy, there are basically five different zones. The first is the US and the second is Europe. China might be third on this list but often second if not first in terms of what’s driving marginal changes. In behind those is Japan, not what it once was but still often a bellwether for [...]
Normally, it’s a very good sign when the yield curve steepens. If longer-term rates are rising faster than those on the shorter end of the curve, it would say the bond market is forecasting a better probability of normal. Given where interest rates have been the last decade plus, this kind of steepening is what should’ve happened in 2017 if [...]
In May 2018, the European Parliament found that it was incredibly popular. Commissioning what it calls the Eurobarameter survey, the EU’s governing body said that two-thirds of Europeans inside the bloc believed that membership had benefited their own countries. It was the highest showing since 1983. Voters in May 2019 don’t appear to have agreed with last year’s survey. For [...]
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