About two weeks ago, we were assured by the government in Spain that they only needed about €50 billion for their banks. All of a sudden the €50 billion became €100 billion and we are still counting. Welcome to the new math where besides addition through subtraction...

Fifteen years ago the global markets were getting ready to “welcome” the Asian financial crisis. The cause of that crisis? Declining multifactor productivity from Thailand and Taiwan, to Indonesia and S. Korea. The symptoms of that crisis? Trade deficits, overvalued...

I love dogmas (our first D). I know that in politically correct terms, dogma is an antiquated term that should die. However, dogmas are like the oxygen. You may not be able to see the oxygen with the naked eye however you cannot live without it. There are some...

Last Thursday evening, JP Morgan Chase admitted to losses of at least $2 billion on a $100 billion derivatives bet, baptized as hedging. As time goes by, the actual losses may increase. For review purposes, it is helpful to revisit the worldwide $700 trillion monster...

The results of the elections held in Greece last Sunday may well have sent a powerful signal to politicians and policy makers worldwide, that has yet to be discussed by the press. That message simply says: “We are no longer your useful idiots”. It seems that for many...

From last weekend’s IMF meetings we learned that its “firepower” had increased substantially by over $400 billion to be used as needed in light of the deteriorating situation in Europe. That seems a bit contradictory given that it was the IMF that warned earlier last...

The figure below shows the six forces which we believe are at work in determining the trajectory of the Euro in the foreseeable future. The analysis below discusses the six forces that are affecting the Euro’s future and hence the Euro zone’s potential. We present the...

The markets were rattled in the last few days. Let’s review what the conventional wisdom underwrote as the main causes (we use the plural causes, since the explanation was changing almost on a daily basis, as heuristics – the hard wired tendency of humans to perform...

The risks in the global economy remain due to Europe’s problems in the banking and fiscal spheres as well as due to the hundreds of trillions of dollars in toxic derivatives that freely flow in the seas of finance. The complacency seen is truly unbearable given the...

A friend was telling me lately that it seems that there are two kinds of people: Those who chose the door that leads to paradise and those who choose the door that leads into a discussion group about the paradise. His point was that several times in our lives we miss...