The Banking Sector, Collateral Velocity, and Credit Creation, Part I: Where are we Headed?
Modern finance depends on credit. Credit creation depends on inter-bank trust. Inter-bank trust depends on asset valuation. Asset valuation is an opaque process that is a function of several parameters (economic, financial, geopolitical, strategic, among others). For...Weekly Market Update
Market Action Markets continued their poor start to 2016 with another down week. Technology and Biotech names were sold off especially hard due to a combination of poor earnings from some key names and regulatory scrutiny over drug prices. The U.S. employment report...Market Hysteresis and Capitulation: Financial Stress and Secular Trends
It takes some time for the market to comprehend when stress is built up in the economic and financial systems. This is part of the hysteresis reality. When financial stress builds up for some time, a crisis ensues that is followed by a recession. The graph below from...Monthly Barometer’s Forward-Looking Monthly Review: An Interdisciplinary View of our Complex Global Economy
The global economy is about to enter its “third dip” (after the subprime and the Eurozone crises). The IMF just revised downwards its 2016 forecast for global growth to 3.4% (from 3.6%) and the World Bank to 2.9% for real GDP growth (down from 3.3%). Most likely these...Weekly Market Update
Market Action Markets finally posted a positive week in the U.S. thanks to a combination of some promising earnings reports and global central banks maintaining easy policies. While stocks posted gains in most markets, bonds rallied as well. Japan surprised markets...Sign Up for Our Publications
