A research paper by Eyal Dvir of Boston College and Ken Rogoff of Harvard suggests some interesting parallels between the recent behavior of oil prices and what was observed at the very beginning of the industry. I’ve been doing some related research on the history of the oil industry that looks into the events behind … Read more
As we enter 2011, we are hearing more about something called price-level targeting. It clearly has something to do with monetary policy, but what does the term really mean, and why is it coming up for discussion right now? Is it a policy the Fed is likely to adopt, or is perhaps already using? Price-level … Read more
The accumulation of foreign exchange reserves and loans to the BNDES increase public spending and shorten the maturity of the public debt. One cannot deny that there has been an improvement in Brazil’s public debt indicators. This stands out even more clearly when compared to the situation in developed countries, which increased their debts significantly … Read more
The Finance Minister should declare that accounting tricks will no longer be used to meet the fiscal target. There are many challenges facing the new Finance Minister. On the external front—which, in Brazil, has historically been associated with crises—, the country, on the contrary, is nowadays witnessing excessive capital inflows. The capital which is flooding … Read more
Chris Whalen is one of the leading independent analysts of the US banking and financial system. In a world where too many sell-side analysts of the financial sector are not truly independent, Chris represents a fearless beam of enlightened and independent light that avoids the usual self-serving spin that is presented in so much of … Read more
Some conservatives are attacking current U.S. monetary policy as being too expansionary, as likely to lead to excessive inflation and debauchment of the currency. The Weekly Standard is promoting a letter to Fed Chairman Ben Bernanke that urges a reversal of its policy of QE2, its new round of monetary easing. The letter is signed by a list … Read more
It’s complicated. The ECB is currently juggling two objectives: perpetually assuaging bond investors in the face of a shaky financial system, and managing policy for an economy with a single currency and sovereign government issuers. But is it really so complicated? The chart above illustrates the peak (deemed 2008 Q1 here) to trough and recovery … Read more
On Sunday, October 31, Brazilians will choose the next president up until 2014. Despite the poor quality of the debate during the election campaign, the quote from Churchill that “democracy is the worst form of government except for all those others that have been tried,” remains valid. The main economic issues were not adequately discussed … Read more
One of the risks that have been increasing in Brazil, quite unnoticed by financial markets, is the fiscal risk involved in public banks credit expansion. BNDES, the Brazilian development bank, has received more than two-hundred billion reais to expand its loans. A few weeks ago, the Minister of Finance and the president of the BNDES … Read more
In Germany, industrial production increased 1.7% in August, or 10.7% over the year. The monthly surge beat expectations 3-times over (0.5% on Bloomberg). According to MarketWatch: After two rather disappointing months in the German industry, concerns about fading external demand and the sustainability of the German recovery surfaced. Today’s numbers should hush these concerns. Not … Read more