Today is the time to update you on how my 2014 surprises are faring and why. Just to remind you, the surprise list is based on Byron Wien’s list of ten surprises which he has been conducting for the last thirty years. Surprises are events to which investors assign 1-in-3 odds of happening but which I believe have a more […]Read more ›
Post Tagged with: "Greece"
Earlier today, I had an interesting back and forth on Twitter with Edward Hugh, Claus Vistesen and Matthew Lynn about Europe and the ECB. I think we all believe there is more pain to come for Europe and likely there will be writedowns. But I think a lot of the problem has to do with the flawed institutional architecture and […]Read more ›
The big news in the markets today is the standoff in eastern Ukraine between pro-Russian armed rebels and the Ukrainian military. This has European markets selling off. The potential for problems in eastern Ukraine is something we should have seen as a possibility given the motives in the Texas annexation I outlined as a comparative case. Given that analysis, I still believe the question now is more about how Ukraine responds in eastern Ukraine than how Russia, Europe, NATO, or the US respond. It looks like we will get a military response. And as such, the potential for dramatically increasing tension with Russia is high. The European periphery will be especially vulnerable because of this. In addition, Russia is already moving away from the West as a hedge. Thoughts belowRead more ›
This week’s theme post will be exclusively about Greece because I think the Greek bond deal is emblematic of trends we see in markets and the real economy. And of course, the big news in the past few days is Greece. Its 5-year government bond deal was over six times oversubscribed, even after a 50% increase in the allotment. The […]Read more ›
The Greek bond deal that in February I predicted would come to market was deemed a rousing success by the market. Initially Greece had planned a 2 billion euro offering for 5-year money. But there was heavy interest and Greece’s underwriters got bids for 20 billion euros, allowing Greece to increase the deal size to 3 billion. The deal came […]Read more ›
It is about time I updated you on how the ten surprises for 2014 are faring. I actually have 14 but I only get credit on the first ten. The second ten are a bonus round. I am defining my surprises as events to which investors assign 1-in-3 odds of happening but which I believe have a more than 50 […]Read more ›
It’s not fashionable to be optimistic about Europe. But I have been a Europe bull since last April when we moved from the front-loaded austerity paradigm to a backloaded paradigm. And beginning in June 2013, I saw the data moving in that direction. Now the data now fully support this stance. But that’s the cyclical view. What about the macro secular story? Here the story is a bit more murky as it involves loss socialization, the continuing bank – sovereign nexus, and huge government debt burdens without the central bank backstop of a sovereign currency issuer.Read more ›
Themes for today
Emerging market political risk is now front and center.
US data suggests consumption growth is vulnerable to poor wage trends.
The European periphery banks are benefitting from lower sovereign yields.
The potential for China’s currency regime to change is a developing story.
Yesterday, I began my Ten Surprises List. As a reminder, the surprise list is loosely based off Byron Wien’s list of ten surprises which he has conducting doing at Blackstone and Morgan Stanley for the last thirty years. Wien defines his surprises as events to which investors assign 1-in-3 odds of happening but which he believes have a more than 50 percent likelihood of occurring in 2012. If the list is mediocre, I should get 3 or 4 out of ten. If I guess right at 50% odds, I should get 5 of ten. Anything above 5 means I had a good year.Read more ›
By Willem Buiter This post first appeared on Vox Fiscal sustainability has become a hot topic as a result of the European sovereign debt crisis, but it matters in normal times, too. This column argues that financial sector reforms are essential to ensure fiscal sustainability in the future. Although emerging market reforms undertaken in the aftermath of the financial crises […]Read more ›
I have some interesting ideas on the eurozone regarding France, a housing decline and its divergence from the rest of Europe. But I am going to save that for a later post. Suffice it to say the German – French spread is widening; it is at 61 basis points for 10-year securities. And France was the only nation except Greece that saw a manufacturing PMI below 50 in the last month’s data for the eurozone. The Netherlands, which I contrasted to France last month, had the highest numbers. What is this telling us?Read more ›
Clearly, most analysis for 2014 is upbeat. Economists are predicting higher global growth, higher U.S. growth, an end to the sovereign debt crisis and all manner of positive economic outcomes. And I think all of this upbeat analysis is justified. Nevertheless I want to give a more balanced view of what’s on my mind regarding markets and the economy as the New Year begins.Read more ›