One of the offspring just turned to me and said… its been a long month #bostonstrong #oklahomastrong
20 minutes ago
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Food Inflation in India—The Government Has to Act and Not Hope
Inflation, especially food inflation, in India remains essentially a government monopoly. Surprised? What I mean is that high food inflation is the cause of faulty government policies that has a distortionary effect on prices. Given the elevated level of food prices in urban India, the common perception is that urban inflation is higher than rural [...]
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QE Does Not Drive Portfolio Flows Into India
Conventional wisdom has it that quantitative easing (QE) leads to deluge of capital flows into emerging market economies and are generally positive for risk-on assets. The focus of this piece is the impact of QE on Indian stock market. While the impact of QE1 was clearly positive for the Indian stock market, it is important [...]
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India Growth Story – A 9% Growth Miracle that Was Never Meant to Be
We believe that expectation of India’s (a dirigisme economy) growth miracle (9% plus rate of growth) is quite far-fetched. We, link this to the failure of the institution of parliament and judiciary in India. As India’s electorates continues to come up with fractured mandate with every passing election, there are increasing instances of criminalization [...]
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The Likelihood of BoJ Easing Next Week
The Fed’s Thursday easing announcement paves the way for the BoJ to announce its own asset purchase program expansion at next week’s policy meeting, in line with our previous view. There are certainly risks to this call: Just today the government released machine orders data showing a far more resilient July than expected, and earlier [...]
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Mr. Draghi, Mr. Arnault, and Europe’s Gordian Knot
What does the ECB bond purchase program announced by Mario Draghi last Thursday have to do with French billionaire Bernard Arnault’s application for Belgian citizenship on Saturday? Both reflect a Gordian knot at the heart of the European Union that makes relatively straightforward solutions to the crisis elusive. This Gordian knot is, in turn, the [...]
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How Many Euro Breakup Scenarios Are There?
In a short note at Roubini.com, I calculate that there are nearly a quadrillion different permutations for the 17-member eurozone to break up into various single currencies, with a “rump euro” remaining if k>0. What are your views? And is the euro really irreversible, or is that just one possibility out of 1,000,000,000,000,000? Table 1: Euro Fragmentation Calculations [...]
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Live Blogging the Financial Meltdown: Nouriel’s 26 Early Warnings and Predictions
Nouriel Roubini’s 2008 advisory, ‘The Rising Risk of a Systemic Financial Meltdown: Twelve Steps to Financial Disaster,’ reads as quite prescient, looking to the season of fraught policy meetings for central banks and governments that lies ahead. In fact, Nouriel’s outline of a slow collapse at a time when people were hoping for a quick [...]
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September Will Be a Doozy Again This Year
Before you take off for your August holiday, you should probably be aware of what you’ll be coming back to in the eurozone (EZ) in September (warning: the following may make you decide not to come back). For the second September in a row, developments in the EZ have the potential to be highly dramatic, [...]
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ECB Will Build a Bridge…But to Where?
All eyes are on the ECB governing council meeting on August 2nd to see exactly what Mario Draghi meant last week when he pledged that the ECB would preserve the euro. The way the markets have rallied off the back of this statement, it seems that investors think that the ECB is poised to intervene [...]
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A Spanish Bailout? Don’t Hold Your Breath
From the guardian: It is a rule of thumb among eurozone crisis observers that the more something is denied by officials, the more likely it is to happen. With Spain’s borrowing costs at euro-area record highs, its officials insist it will not need a full bailout programme. To most of us, however, it seems no longer [...]
