By April last year, it had become clear that conditions in China were heading into dangerous territory. Even though most mainstream attention was fixed on the then-still growing stock bubble, there was so much that was wrong almost everywhere else. The economy would not stop slowing, and indeed still has not. The financial system was worse, so much so that [...]
Over the weekend, Charles Schwab issued a “tool” for investment advisors to help them “feel good” about what is expected for 2016. With investors increasingly talking about risk, and stock market risk at that, there is a counter-rush to reassure. Some of that is expected in places like this, but increasingly the disparity between the form of that encouragement and [...]
The IMF added its voice last week to the chorus of Keynesians calling for Janet Yellen to - to paraphrase Rocky Horror - can it, Janet. The "it" being, of course, a hike in interest rates. The IMF cited "substantial output gaps" and "below target inflation" to justify their call for monetary policy to remain "accommodative". I have no idea [...]
Headlines a few years back were about China's need to re-balance their economy away from a heavy reliance on exports and toward domestic demand. The thesis says that self-reliance will lead to a less volatile economy and lower cost of capital. China is succeeding with this goal, but the path is initially a very bumpy road. The MSCI China index [...]
The Greek government, EU, IMF and ECB agreed to new terms for a third bailout. As I see it, there are two very important items for markets today. The Greek government will be selling assets to pay down debt and re-capitalize the banking sector. Creditors essentially accessed the Greek collateral they were seeking. In return, the European Commission will provide Euro [...]
When the IMF released its semi-annual World Economic Outlook in April, it was still caught up in the GDP/Establishment Survey frenzy of late 2014. Despite the fact that Q1 GDP was certain to be negative by the time of publication, the IMF was wholly undeterred preferring instead to view the US as still the global engine and hope. They even [...]
Here is a simple conditional probability table one might use to gauge the potential risks and rewards stemming from the Greek credit negotiations. The table considers 3 paths which may arise from ongoing talks. It assigns a probability for each and what an investor might expect for market returns under each scenario. Given recent events, the probabilities in the table have [...]
The March FOMC statement that caused a serious inflection in so many places was a reality check upon not monetary policy but economic fluency. In some ways it is subtle by design, but the changes made between the policy statement in January and that in March were more obvious and open. I have to wonder how much the then-surging “dollar” [...]
Perhaps being deprived of incoming data has set my mind too far toward conspiratorial, but there were a few developments in the global finance realm that piqued my interest. First, the head of the World Bank basically warned emerging market economies to get their act together in the next few months. “We think that now emerging market economies have maybe [...]
From friend of Alhambra, Brian Cronin: The Basic or Fundamental Law of the Federal Republic of Germany (Grundgesetz für die Bundesrepublik Deutschland) came into effect in May 1949 after much discussion between the occupying powers - the USA, UK and France - after World War Two. The guardian of the law is the Federal German Constitutional Court (Bundesverfassungsgericht or BverfG). [...]
Stay In Touch