Tag: nationalism

Spain shows the way as Euroland deflation looms

Spain shows the way as Euroland deflation looms

This is an abbreviated post from our subscription series at Credit Writedowns Pro. The European data out today were not particularly good. We saw a deceleration in the eurozone economy, that when combined with the deceleration in German inflation, suggests that deflationary forces could still threaten a debt deflationary impulse in Europe if an exogenous shock hits the economy. The […]

Risk for Greece and European periphery from Ukraine crisis escalation mounts

Risk for Greece and European periphery from Ukraine crisis escalation mounts

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 below

Some thoughts on Ukraine, part 1

Some thoughts on Ukraine, part 1

It is about time I did a long-form political economy piece because a lot of what is occurring in emerging markets is of that ilk. The political economy dominates the economics of the issues in a way that makes discussing markets and economics very much related to politics. Here I want to concentrate on Ukraine because I believe it has become an important point of conflict for the future geopolitical landscape.

Grokking upside scenarios in Crimea

Grokking upside scenarios in Crimea

As Ukraine prepares to evacuate its military from Crimea, I believe we should look at upside scenarios in Ukraine. Most of my commentary to date has been focused on risk assessment. But the pullout of Ukraine from Crimea is the first major sign of de-escalation I have seen in a while, which warrants a look at future positive outcomes.

Using Croatia as an analogy for Crimea

Using Croatia as an analogy for Crimea

Yesterday, I laid out what the annexation of Texas in 1845 might say about Vladimir Putin’s motives in Crimea. My conclusion, however, was that, whatever Putin’s motives, the Texas annexation tells us military confrontation was not to be discounted as an outcome of the Crimean crisis. Looking a little closer into the past, let’s look at what the disintegration of Yugoslavia can tell us. I believe the chief lesson will be that recognition of seceding republics moves the world from branches in a decision tree with limited nodes to branches with many more decision nodes, creating many opportunities for policy error.

Using the Texas annexation of 1845 to think about Putins’s motives

Using the Texas annexation of 1845 to think about Putins’s motives

In 1845, the United States annexed the Republic of Texas, a breakaway territory from the Republic of Mexico. This annexation created great hostility between the US and Mexico, leading to the Mexican-American war in 1846. The events are 170 years ago, so they aren’t relevant from a precedent perspective. But the broader circumstances are similar enough that the Texas annexation […]

Events in China and Ukraine are dominant macro drivers

Weekend developments will dominate the first part of the week ahead. Two developments stand out. First, China announced a doubling of the permissible band from 1.0% to 2.0% around the daily fix. The PBOC deliberately and preemptively facilitated the narrowing of onshore and offshore yuan interest rates to avoid a new influx of capital that might have been spurred by the widening of the trading band. The second development over the weekend was the Crimean referendum.

EM: Escalation in Crimea, China concerns, Brazilian inflation and more

EM: Escalation in Crimea, China concerns, Brazilian inflation and more

By WIn Thin and Ilan Solot 1) The annexation of Crimea by Russia represents an important escalation of the crisis 2) China has re-emerged as a concern for markets 3) Turkish political tensions are rising again ahead of March 30 local elections 4) Brazil consumer inflation is accelerating, making central bank decisions more difficult going forward 5) Thai government may […]

More on the Ukraine conflict

More on the Ukraine conflict

Today’s links carry a widely-diverging set of opinions about the moral issues surrounding the situation in Ukraine. But since this is a finance site, I want to discuss the economic issues. I continue to believe the Ukrainian situation will have only a modest impact on the global economy unless war breaks out. Moreover, Europe’s trade linkages to Russia make sanctions a trickier subject for Europe than the US. Expect to see diverging views within NATO and no meaningful economic penalty as a result.

On the Ukrainian conflict

On the Ukrainian conflict

The conflict in Ukraine is first and foremost about the violent overthrow of a corrupt regime that was not increasing living standards. But now that Ukraine has appealed to the west, it has become much more about Russia’s sphere of influence and the encroachment of the US, the EU, and NATO on former eastern Bloc and soviet areas. The contagion to Russia has begun. However, unless we see armed conflict, the implications for other emerging markets remains muted.