[Premium] Daily commentary: thoughts on austerity as a policy tool and on India as a black swan

The news flow today is about the same as it has been throughout the week: JPMorgan Chase and Facebook in the US and Greece and to a lesser degree now Spain in the EU. I think these are the wrong narratives to be focused on. As I wrote yesterday, I believe China will suffer a hard landing but that India will be worse than China. In my view, the economic slowdown in India is the biggest story that’s not making headlines.

Then there is the debate over austerity. I posted on how we had the same debates about austerity under the gold standard while Hoover was President in the US during the Great Depression (see Hoover on austerity to balance the budget and defend the dollar in 1932). Here’s my view on that debate

[Premium] India will be worse than China

When I listed my Ten Surprises for 2012 in January I predicted that China would have a hard landing, defined as quarterly growth below 5% annualised by the end of this year. But I also said that India would be worse than China. And it is this combination that makes me more concerned about the global growth slowdown in emerging markets than the crisis in Europe. This is a big, big story but no one is talking about it because Europe is sucking up all of the air

[Premium] Daily commentary: The global growth slowdown catches India and Australia

The global growth slowdown began in the second half of 2011. I flagged it as a trend last May. When I updated my view in December, my concerns were Europe, China, India and Australia. And this is still the case

OPEC: near record production, spare capacity a concern

In addition to the hole left by the Iran sanctions, the Saudis are pressured to pump more in order to meet their own rising domestic demand. This is putting strains on OPEC’s spare capacity

[Premium] Tracking My List of Ten Surprises for 2012

I thought now would be a good time to see how my ten surprises for 2012 are tracking as we are nearly a third of the way through the year. I posted these as my first weekly newsletter and these are events that have 1-in-3 odds of happening but which I believe have a more than 50 percent likelihood of occurring in

Monetary Relief from Asia

The ECB and BOE have shown their intent with their recent aggressive balance sheet expansions and the Fed is trying hard to keep the door open for more QE even as the data in the US continues to defy the general global slowdown.

In Asia however sticky inflation in India, a desire to nail property developers to the wall in China and a belief in a post earthquake in Japan have kept the big Asian central banks from providing additional easing. Even in Australia where the economy has been teetering on the brink of a recession for 6 months, the central bank has refrained from any decisive moves

India: Land of Energy Opportunity

Quick, what country is the economic engine that will power world growth? If you answered “China,” you’re far from alone. But there’s another country that deserves as much attention and better yet, is much friendlier to investment: India, home to 1.2 billion people. To electrify all those houses, power the industries that keep all those people employed, and fuel the vehicles that more and more Indians own, India’s energy needs are shooting skyward

[Premium] Protecting wealth in a world of recurring crisis

Happy Wednesday. I know the news is ‘less good’ today than it was when I last wrote you but writing these weeklies always puts me in a more positive frame of mind. Nevertheless, today’s topic is about downside risk. My hope is to frame the economic scenario globally and then to offer some strategies of mitigating what I believe is significant downside investment risk

Edward Harrison’s Ten Surprises for 2012 (short version)

Yesterday morning, I did the first weekly newsletter on my ten surprises for 2012. Here’s a brief version of the list

[Premium] Edward Harrison’s Ten Surprises for 2012

Welcome to Credit Writedowns Pro. This is the first post in a series here. Let me start this Byron Wien-style and make a predictions list. 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. That’s how I am playing it too

Byron Wien’s Ten Surprises for 2012

As always, I present you Byron Wien’s Ten Surprises for 2011. He is bullish yet again – on both the US and emerging markets

On the ECB’s Long-Term Refinancing Operation and 2012 macro ideas for investors

The end of year is usually a good time for markets. There was a lot of angst about the European situation a few weeks ago, but there is less of that now because we’re hitting year-end (tape painting). Does that mean the credit crisis situation is stable? No, but it has stabilised somewhat. 2012 will be a different story though. I talked about the European sovereign debt crisis and my themes for 2012 with Howard Green of BNN and Ryan Avent of the Economist yesterday. The link to the video is below but let me say a bit more, particularly about today’s LTRO by the ECB. I’ll try to be brief