• Country by country macro update, part 2, September 2014

    Yesterday, I did a broad overview of four markets of interest to global investors. And I wanted to continue my thoughts on this here with a few more markets and with a deeper dive into some of my thinking about the UK. Britain, Part 2: I want to take the UK on first, because I am doing a headline story […]

    Country by country macro update, part 2, September 2014
  • Is the ECB doing QE?

    Last week, the ECB announced that it would begin purchasing securities backed by bank lending to households and firms. Whereas markets and the media have generally greeted this announcement with enthusiasm, this column identifies reasons for caution. Other central banks’ quantitative easing programmes have involved purchasing fixed amounts of securities according to a published schedule. In contrast, the ECB’s new policy is demand-driven, and will only be effective if it breaks the vicious circle of recession and negative credit growth.

    Is the ECB doing QE?
  • Some thoughts on Scottish secession from the UK

    Britain faces a crisis of monumental proportions as the Scottish electorate decides whether to leave the Union and make Scotland a fully independent country for the first time since 1707 when it first entered into political union with England. This vote has all sorts of ramifications for the currency, monetary policy, fiscal policy and the banking system within the UK and Scotland. But it also has far-reaching implications for the whole of the EU. I have a few thoughts on how to frame the issue below as well as a model for how to secede if it comes to that.

    Some thoughts on Scottish secession from the UK
  • The Catalan Vote: Why It’s Time To Start Getting Worried About Complacency In Madrid

    There is now a provisional date for that woeful collision to occur: the 9 November this year, the date chosen by the Catalan parliament for the holding a popular (non binding, not a referendum) consultation under a new law which will receive parliamentary approval on 19 September. The original intention of the Catalan parliament was to hold a referendum on the region’s future authorized by Madrid. With that intent parliamentary representatives took a proposal last spring to the Spanish parliament. The reply was a polite but near unanimous “no” since Spain’s parliamentarians took the view any such vote could be considered “unconstitutional”.

    The Catalan Vote: Why It’s Time To Start Getting Worried About Complacency In Madrid
  • What does a “good” Chinese adjustment look like?

    I have always thought that the soft landing/hard landing debate wholly misses the point when it comes to China’s economic prospects. It confuses the kinds of market-based adjustments we are likely to see in the US or Europe with the much more controlled process we see in China. Instead of a hard landing or a soft landing, the Chinese economy faces two very different options, and these will be largely determined by the policies Beijing chooses over the next two years.

    What does a “good” Chinese adjustment look like?
  • Income inequality, corporate inversions and financial engineering

    What I am going to discuss today is financial gimmickry and wage growth. This piece is an outgrowth of a piece I am writing for the New York Times on corporate buybacks and capital investment plus a segment I recently did on Boom Bust at RT about inversions. The video is attached here.

    Income inequality, corporate inversions and financial engineering
  • Divergence in ECB and Fed rate regimes will drive portfolio shifts

    The big news today was the ECB’s decision to lower interest rates 10 basis points to 0.05% and its simultaneous decision to engage in a form of quantitative easing using the asset-backed market as a vehicle. While these measures are welcome, they will almost certainly not be enough on their own. But it will give some respite to a euro area on the brink of outright deflation.I have a few brief comments below.

    Divergence in ECB and Fed rate regimes will drive portfolio shifts
  • 3 Things American Workers Can Expect in the Next Year

    The gist of the piece here is that, while I see a cyclical recovery that is gathering pace, the Achilles heel of the recovery from a sustainability perspective is wage growth. To the degree the Fed normalizes policy now before wage growth has a chance to make up for its really weak post-recession trajectory, the US will find itself in the same sort of weak stall speed scenario that we now see in Europe. My worry now is that the cyclical recovery has been artificial, fake – goosed up by temporary monetary stimulus. I think that when that stimulus is removed, there will be nothing to support continued growth, and that the US economy will weaken. Here’s how I put it below.

    3 Things American Workers Can Expect in the Next Year
  • A government bond bullish scenario is taking form

    Welcome back to Credit Writedowns! Labor Day is behind us now and I intend to have a much more regular posting schedule going forward. But the lack of posts has given me some time to reflect on the global macro situation without the need to write about it on a daily basis. And this has given me some distance from […]

    A government bond bullish scenario is taking form
  • The disaster in Europe versus data in the US (plus China and Argentina)

    Despite the title, this is not a mono-themed post but more of a highlight of recent news and data and their importance in interpreting the direction of the economy and potential effect on markets. I do want to concentrate on European and US data but I also have some data points from elsewhere. Let’s start with Europe. Europe needs a […]

    The disaster in Europe versus data in the US (plus China and Argentina)

Members »

Country by country macro update, part 2, September 2014

Country by country macro update, part 2, September 2014

16 September 2014 at 15:47

Yesterday, I did a broad overview of four markets of interest to global investors. And I wanted to continue my thoughts on this here with a few more markets and with a deeper...

Commentary »

Country by country macro update, September 2014

15 September 2014 at 20:52

This is the first time I am doing this, so let’s see how much value it adds. I thought I would quickly run through a number of countries in the news and give my perspective...

Daily »

Links: 2014-08-04

Links: 2014-08-04

4 August 2014 at 11:28

China dumps Symantec, Kaspersky Lab from approved vendors – CNET ekathimerini.com | Moody’s upgrades Greece by two notches China Services Index Drops to Six-Month...

  • Links: 2014-08-01
    Links: 2014-08-01

    Puerto Rico Power Authority in Deal With Banks to Defer Loan Payments – WSJ Argentina accuses US of judicial...

    1 August 2014 at 11:34
  • Links: 2014-07-31
    Links: 2014-07-31

    FYI: After the tech links, there is at least one link in this lot that I do not endorse but do think is required...

    31 July 2014 at 09:27
  • Links: 2014-07-30
    Links: 2014-07-30

    There’s one link in this lot that definitely deserves the warning that links do NOT equal endorsements. Not saying...

    30 July 2014 at 08:38
  • Links: 2014-07-29
    Links: 2014-07-29

    Pentagon Plan Would Help Ukraine Target Rebel Missiles – NYTimes.com Smaller Banks’ Customers Hit Hard...

    29 July 2014 at 07:02

All Content

Country by country macro update, part 2, September 2014

Country by country macro update, part 2, September 2014

Yesterday, I did a broad overview of four markets of interest to global investors. And I wanted to continue my thoughts on this here with a few more markets and with a deeper dive into some of my thinking about the UK. Britain, Part 2: I want to take the UK on first, because I am doing a headline story […]

Read more ›

Country by country macro update, September 2014

This is the first time I am doing this, so let’s see how much value it adds. I thought I would quickly run through a number of countries in the news and give my perspective on the macro picture in each. I am just going to give a summary here of the key points of interest and will do a deep dive on some at a later date. Let’s start with the US.

Read more ›
Is the ECB doing QE?

Is the ECB doing QE?

Last week, the ECB announced that it would begin purchasing securities backed by bank lending to households and firms. Whereas markets and the media have generally greeted this announcement with enthusiasm, this column identifies reasons for caution. Other central banks’ quantitative easing programmes have involved purchasing fixed amounts of securities according to a published schedule. In contrast, the ECB’s new policy is demand-driven, and will only be effective if it breaks the vicious circle of recession and negative credit growth.

Read more ›
Some thoughts on Scottish secession from the UK

Some thoughts on Scottish secession from the UK

Britain faces a crisis of monumental proportions as the Scottish electorate decides whether to leave the Union and make Scotland a fully independent country for the first time since 1707 when it first entered into political union with England. This vote has all sorts of ramifications for the currency, monetary policy, fiscal policy and the banking system within the UK and Scotland. But it also has far-reaching implications for the whole of the EU. I have a few thoughts on how to frame the issue below as well as a model for how to secede if it comes to that.

Read more ›
The Catalan Vote: Why It’s Time To Start Getting Worried About Complacency In Madrid

The Catalan Vote: Why It’s Time To Start Getting Worried About Complacency In Madrid

There is now a provisional date for that woeful collision to occur: the 9 November this year, the date chosen by the Catalan parliament for the holding a popular (non binding, not a referendum) consultation under a new law which will receive parliamentary approval on 19 September. The original intention of the Catalan parliament was to hold a referendum on the region’s future authorized by Madrid. With that intent parliamentary representatives took a proposal last spring to the Spanish parliament. The reply was a polite but near unanimous “no” since Spain’s parliamentarians took the view any such vote could be considered “unconstitutional”.

Read more ›
What does a “good” Chinese adjustment look like?

What does a “good” Chinese adjustment look like?

I have always thought that the soft landing/hard landing debate wholly misses the point when it comes to China’s economic prospects. It confuses the kinds of market-based adjustments we are likely to see in the US or Europe with the much more controlled process we see in China. Instead of a hard landing or a soft landing, the Chinese economy faces two very different options, and these will be largely determined by the policies Beijing chooses over the next two years.

Read more ›
Income inequality, corporate inversions and financial engineering

Income inequality, corporate inversions and financial engineering

What I am going to discuss today is financial gimmickry and wage growth. This piece is an outgrowth of a piece I am writing for the New York Times on corporate buybacks and capital investment plus a segment I recently did on Boom Bust at RT about inversions. The video is attached here.

Read more ›
Divergence in ECB and Fed rate regimes will drive portfolio shifts

Divergence in ECB and Fed rate regimes will drive portfolio shifts

The big news today was the ECB’s decision to lower interest rates 10 basis points to 0.05% and its simultaneous decision to engage in a form of quantitative easing using the asset-backed market as a vehicle. While these measures are welcome, they will almost certainly not be enough on their own. But it will give some respite to a euro area on the brink of outright deflation.I have a few brief comments below.

Read more ›
3 Things American Workers Can Expect in the Next Year

3 Things American Workers Can Expect in the Next Year

The gist of the piece here is that, while I see a cyclical recovery that is gathering pace, the Achilles heel of the recovery from a sustainability perspective is wage growth. To the degree the Fed normalizes policy now before wage growth has a chance to make up for its really weak post-recession trajectory, the US will find itself in the same sort of weak stall speed scenario that we now see in Europe. My worry now is that the cyclical recovery has been artificial, fake – goosed up by temporary monetary stimulus. I think that when that stimulus is removed, there will be nothing to support continued growth, and that the US economy will weaken. Here’s how I put it below.

Read more ›
A government bond bullish scenario is taking form

A government bond bullish scenario is taking form

Welcome back to Credit Writedowns! Labor Day is behind us now and I intend to have a much more regular posting schedule going forward. But the lack of posts has given me some time to reflect on the global macro situation without the need to write about it on a daily basis. And this has given me some distance from […]

Read more ›
The disaster in Europe versus data in the US (plus China and Argentina)

The disaster in Europe versus data in the US (plus China and Argentina)

Despite the title, this is not a mono-themed post but more of a highlight of recent news and data and their importance in interpreting the direction of the economy and potential effect on markets. I do want to concentrate on European and US data but I also have some data points from elsewhere. Let’s start with Europe. Europe needs a […]

Read more ›
Cyclical recovery petering out before it hits middle class

Cyclical recovery petering out before it hits middle class

Before I get into the details today, I want to note that going forward, I may not have the bandwidth to be able to post on a daily basis. I am going to try. But there are definitely going to be weekdays going forward where I won’t be able to post given other commitments I am making. I don’t want […]

Read more ›