Europe’s Fake Recovery

Europe’s Fake Recovery

photo: Chris Goldberg Investors were disappointed when they undid the wrapping on the European Central Bank’s (“ECB’s) early holiday present.  The package was not insignificant: a cut in deposit rates by 0.10% from negative 0.20% to 0.30%; an extension of the €60 billion per month bond purchase program by six months (additional €360 billion in liquidity); […]

Interest Rate Policy Uncertainties

Interest Rate Policy Uncertainties

photo: againstcronycapitalism  Since Lehman Brothers left the mortal coil, there have been more than 600 rate cuts. Over the same period, central banks have injected over US$12 trillion under QE (Quantitative Easing) programs into money markets. Over US$26 trillion of government bonds are now trading at yields of below 1% with over US$6 trillion currently […]

China’s Stock Market Crash: Part 2 – A Little Capitalist Problem

China’s Stock Market Crash: Part 2 – A Little Capitalist Problem

photo: Aaron Goodman Most things in China are unfamiliar to foreigners, even its stock market. This is the second part of a three part series on the Chinese stock market crash. The Chinese government’s policy to boost stock prices succeeded beyond expectations as investors fuelled a speculative boom. Prices rose around 250% in around 2 years, including a […]

China’s Stock Market Crash: Part 1 – Communist Shares

China’s Stock Market Crash: Part 1 – Communist Shares

photo: William Angel Most things in China are unfamiliar to foreigners, even its stock market. This is the first part of a three part series on the Chinese stock market crash. Between 2013 and mid-2015, the Shanghai Stock Exchange Composite Index rose by around 250% from around 2,000 to over 5,000. Other Chinese indices, especially the Shenzhen […]

Central Banks Policy Asynchronous-ity – A Source of New Risk

Since 2009, the key driver of financial markets has been low rates and abundant liquidity which has boosted all asset prices. The total amount of money pumped into global money markets is around US$10-12 trillion, enough to buy each person on earth a widescreen flat TV.  In the great reflation, according to one estimate, over […]

Greece’s Never Ending Troubles

The final outcome of the Greek debt crisis has been obvious from the beginning. The Hellenic nation will need to restructure its debt, writing off a substantial portion of what it owes. It may need to leave the Euro, allowing the country to devalue to regain competitiveness relative to its peers like Turkey. Spreadsheet Referendum […]

Swiss Finish: Why the Actions of the SNB are More Significant than Thought!

The fallout from the decision of the Swiss National Bank (“SNB”) to abandon a fixed value of the Swiss Franc (“CHF”) against the Euro may foreshadow the potential consequences of the end or failure of central bank activism. As Gloucester in Shakespeare’s King Lear states: “These late eclipses of the sun and moon portend no good to us “. Turning […]

My Big Fat Greek Crisis

Not since the era of Aeschylus, Sophocles and Euripides has Greek drama enjoyed such popularity. Audiences are riveted by provocative dialogue (“immoral beggar”; “fiscal water boarding”), tested themes (a Greek David versus a German and European Union (“EU”) Goliath), modish pop science (game theory) and sex (a Greek Finance Minister who attracts attention in equal […]

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