We will find out Sunday if all the rumors are correct (and by how much) about a significant portion of European banks either failing or still with their “feet wet” after the usual comedy of the stress tests. You never really know with these types of weighty events, as there are all sorts of biases and trading considerations in where [...]
There are “portfolio effects” for individual investors, bank balance sheets and even interbank tendencies, or at least that is according to central bankers. The rather tame ECB announcement this week did highlight and clarify what Mario Draghi and his euro monetarists wish to accomplish. The new measures will support specific market segments that play a key role in the financing [...]
Open Sesame is, of course, the phrase used by Ali Baba to open the 40 thieves' cave and plunder their riches in the Arabian Nights tale. It would seem an apt phrase to describe the frenzy surrounding the IPO of Alibaba, the Chinese internet commerce firm that floated shares in the US last week. Certainly early investors in Alibaba reaped [...]
I don't believe it. ... You can't predict a weak number, but August tends to be weak consistently, and it tends to get revised up consistently. I think the trend is still north of 200,000. Every other data point is pointing to stronger growth, not weaker growth. Mark Zandi, Chief Economist at Moody's after last week's employment report That, my [...]
What should most troubling to investors of all stripes and locales is that what is going on in Europe is almost exactly the same as what is taking place in Japan. Despite nearly all outward appearances, Japan and Europe have far more in common than differences, at least where it counts. The Japanese have finally created the monster they sought, [...]
There is little for me to say about the GDP figures from Europe, released this week to much shock and discomfort, as I am frankly tired of GDP and eagerly await the unhonored end of its continued mainstream “significance.” The largest problem with it is that its correlation with actual economic results has clearly broken down from whatever it had [...]
It may have been something like two years, maybe closer to eighteen months, but it seems just like yesterday that Europe had left its deficient construct in the past. It was a daily ritual back then, exercising due diligence often through nothing more than checking just how negative bond rates would spring. There were German bunds and even indications of [...]
With the introduction of the world’s first major negative interest rate, I believe it was fully expected that the euro would devalue. After all, it sounds very much like an act of debasement, intentional and heavy, that should move the currency “markets”, but that has not been the case. In fact, the euro appears as much captured by confused stasis [...]
There is no doubt that the investment world, particularly bubble sectors of finance, need reminding how paper thin the layer of ease and order actually is. The calm created by central banks, and this applies to every jurisdiction with the possible exception of Switzerland (which took its very bad medicine in 2008), is only that. There has been nothing fixed, [...]
The ECB continues to sell the recovery in Europe despite any actual pickup in activity, Germany excepted. In financial terms, which are all that matter these days for policymakers, lending continues to contract. Despite the outward appearance of asset prices and certain economic accounts, there is no intent to extend further credit across the European zone. The latest figures through [...]
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