Post Tagged with: "Europe"

Are we in a global financial crisis?

With financial markets tanking across the board, there is a whiff of panic and some people might be thinking that the next global financial crisis is already upon us. I don’t think this is the case. Certainly, the European sovereign debt crisis has entered round two but this can easily be overcome. Turbulence and a simmering crisis in Europe, yes. An acute crisis, no.

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The German view of the Euro crisis

This is an abbreviated version of a post first published at Credit Writedowns Pro on 15 Oct. The Germans got into the eurozone out of a desire to increase European integration and to strengthen Europe as an economic area that rivalled the United States. Yet, now we are in a period where the Germans are being blamed for everything that’s […]

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Does The Secular Stagnation Theory Have Any Sort of Validity?

Does The Secular Stagnation Theory Have Any Sort of Validity?

By Edward Hugh In a number of blog-posts (Paul Krugman’s Bicycling Problem, On Bubble Business Bound, The Expectations Fairy) I have examined some of the implications of the theory of secular stagnation. But I haven’t up to now argued why I think the hypothesis that Japan and some parts of Europe are suffering from some kind of secular stagnation could […]

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The rise in periphery bond yields is sovereign debt crisis, round 2

I have long warned that the euro crisis was going to return. But recently the concern I voiced in posts here was more concrete i.e. that the renewed recession fears in Europe would force a decoupling between the periphery and the core in the Eurozone. This seems to be occurring.

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Eurocrisis Round Two, Blame the Germans Edition

Eurocrisis Round Two, Blame the Germans Edition

What southern Europe needs is a revolution in the mindset and more “better quality” stuff, and no amount of blaming Germany for the situation can get over that. The extractive networks who hold back growth need reforming out of existence. At the same time the under-investment over-saving phenomenon that characterizes Germany bears a remarkable similarity to what has been happening in Japan, with the strange difference that these days Japan is normally sympathized with and not blamed for all the world’s ills.

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The Japanisation Of Europe

The Japanisation Of Europe

By Edward Hugh By now it should be clear that the monetary experiment currently being carried out in Japan (known as “Abenomics”) is fundamentally different from the kind of quantitative easing which was implemented  in the United States and the United Kingdom during the global financial crisis. In the US and the UK QE was implemented in order to stabilize […]

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Six Months of Nothing

Six Months of Nothing

Even if there are good reasons to believe that the prolonged rally can continue for a little longer, there are equally good reasons to believe that the current equity bull market may end in tears. I am not predicting a repeat of 2008-09. A much more modest decline, but still a decline, is a likely outcome at some point over the next 12-18 months.

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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.

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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.

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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.

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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 […]

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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. Full commentary at Credit Writedowns Pro

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