Markets’ Disconnect, Political Pandering, and Business Climate: Valuations at the Dawn of Major Chinese Refinancing Needs
It seems that the bond and equities markets are telling us two different stories. The former with the declining – and in some major cases negative – yields is like foretelling a story of slow growth, rising risks, and absence of a capital spending drive. The latter...
Déjà vu all over again? Slouching Towards Regime Uncertainty
It is the argument of this commentary that following the Brexit vote we may be entering into a period of regime uncertainty. By the latter we mean political, economic, and financial regimes. This could turn out to be a déjà vu watershed period for the global economy...
Monthly Barometer’s Forward-Looking Monthly Review: An Interdisciplinary View of our Complex Global Economy
June 2016 Britain’s decision to exit the EU may constitute the first step on a “stairway to Hell”, throwing up a tangle of economic, financial, societal, legal, political and other issues of unfathomable complexity. The divorce will take years to play out and...
Weekly Market Update
Market Action After another dismal trading session in the wake of the Brexit vote markets stormed a reversal and posted a strong gains on the week, including London’s FTSE which had its best week in years. Despite the risk-on attitude it was defensive sectors...
An Illusion of Value: Zirflation and Nirflation in a Market that is Overfed but Still Malnourished
The Brexit vote (for which we reserve some doubts that it is ever completed) generated some panic selling, sending investors to the refuge of safe havens. Hence, government bonds experienced price gains and yields turned even lower. Now we live in interesting days...
Weekly Market Update
Market Action Despite recent polling data and betting markets strongly pointing towards a vote for remaining with Europe, “Brexit” became a reality. The U.K.’s choice to exit the European Union sent risky assets into a tail spin. Stocks sold off around the world on...
Brexit, Delusions, Fiat Money, and Economic Prospects: Historical Reflections
“A greater Quantity [of money] employs more People than a lesser Quantity”, said John Law in 1705 in his pamphlet titled “Money and Trade Considered, with a Proposal for Supplying the Nation with Money.” And so started the story of paper money and credit, which...
After Brexit: Now It’s Italy’s Turn
“Please don’t go” pleads the German newsweekly Der Spiegel on its cover this week, asking the British to vote against Brexit on June 23rd. Indeed, especially from the point of view of Germany, Brexit would be a disaster. We Germans would be left without a pro-market...
Weekly Market Update
Market Action Central banks around the world stood pat and let Brexit take center stage in market commentary this week. The Fed, BOJ, and Bank of England all kept interest rates unchanged but bonds continued to rally over the uncertainty of next week’s referendum in...
Negative Rates and their Effects on the Equities and Bond Markets: Bifurcation Meets Bewilderment in Historical Perspective
Last week the European Central Bank (ECB) started buying corporate bonds. Over the course of the last four year the ECB has committed to “do whatever it takes” to save an ill-conceived monetary union and a dysfunctional Euro. Among its programs were the purchase of...
