Capital Flows and Financial Activity in Commodity Exporters

Capital Flows and Financial Activity in Commodity Exporters

photo: Nic Taylor Emerging markets and developing economies have struggled in recent years to regain the growth rates of the last decade before the global financial crisis. The slowdown has been particularly evident in commodity-exporters that face declining prices. The World Bank’s most recent Global Economic Prospects, for example, projects growth for those countries of only 0.4% […]

Seven Questions About Climate Change

Seven Questions About Climate Change

Climate change is at the top of the agenda of policymakers as they gather in Paris for the United Nations Climate Change Conference, COP21. Climate change is a threat to the very survival of humanity. Notwithstanding the severity of the threat, actions to halt climate change have been scant and uneven across countries. This Q&A […]

Oil Price Meltdown Heralds New Wave of Destabilization

Oil Price Meltdown Heralds New Wave of Destabilization

As the recent summit of the Organization of the Petroleum Exporting Countries (OPEC) suggests, the ceiling of oil production will not be lowered, despite great overcapacity. What we are witnessing is not just a cyclical shift, but a new secular tend that heralds the demise of the petrodollar era in the Middle East. Meltdown of […]

Weak Economy, Strong Markets: A Paradox That Might End in Tears

Weak Economy, Strong Markets: A Paradox That Might End in Tears

Key takeaway – The global economy is weak, the markets are strong. As a result, the financial system is reaching an unstable equilibrium. The disconnection between (stock and bond) markets and fundamentals is due to abundant macro-liquidity and repeated central bank (CB) intervention. After years of complacency, data signal risks ahead: across the world, growth […]

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 […]