Monthly Archive: April 2017

Emerging Market: Preview for the Week Ahead

2017-04-03

by

2017-04-03

EM FX was mixed last week. The rebound in oil helped some, such as COP, RUB, and MXN. On the other hand, idiosyncratic political risks weighed on South Africa. This week could pose a challenge to EM, with lots of Fed speakers, FOMC minutes, and US jobs data.

Read More »

FX Weekly Review, March 27 – 31: Euro breaks down against USD and CHF

2017-04-02

by

2017-04-02

Trade-weighted index Swiss Franc, April 01
Weak inflation figures in the euro zone let the common currency fall against both the dollar and the Swiss franc. Still last week, the Swiss Franc index had some losses against the US dollar index.

Read More »

The Power of Oil

2017-04-02

by

2017-04-02

Oil Prices WTI, May 2007 - 2017
For the first time in 57 months, a span of nearly five years, the Fed’s preferred metric for US consumer price inflation reached the central bank’s explicit 2% target level. The PCE Deflator index was 2.12% higher in February 2017 than February 2016. Though rhetoric surrounding this result is often heated, the actual indicated inflation is decidedly not despite breaking above for once.

Read More »

Do the Roots of Rising Inequality Go All the Way Back to the 1980s?

2017-04-02

by

2017-04-02

US Household Wealth, 1917 - 2017
Unless we change the fundamental structure of the economy so that actually producing goods and services and hiring people is more profitable than playing financial games with phantom assets, the end-game of financialization is financial collapse. I presented this chart of rising wealth inequality a number of times over the past year. Do you notice something peculiar about the inflection points in the 1980s?

Read More »

Ending The Fed’s Drug Problem

2017-04-02

by

2017-04-02

GDP Corp Profits After Tax, Jan 2010 - 2017
Gross Domestic Product was revised slightly higher for Q4 2016, which is to say it wasn’t meaningfully different. At 2.05842%, real GDP projects output growing for one quarter close to its projected potential, a less than desirable result. It is fashionable of late to discuss 2% or 2.1% as if these are good numbers consistent with a healthy economy.

Read More »

Great Graphic: Emerging Market Stocks

2017-04-01

by

2017-04-01

MXEF Index
MSCI Emerging Market Index is up 12.25% here in Q1. The index is approaching long-standing technical objectives. Look for profit-taking ahead of quarter-end as fund managers rebalance.

Read More »

Credit Suisse Offices Raided In Multiple Tax Probes: Gold Bars, Paintings, Jewelry Seized

2017-04-01

by

2017-04-01

Credit Suisse has confirmed that the Swiss bank, some of its employees and hundreds of account holders are the subjects of a major tax evasion probe launched in UK, France, Australia, Germany and the Netherlands, setting back Swiss attempts to clean up its image as a haven for tax evaders.

Read More »

LIBOR Pains

2017-04-01

by

2017-04-01

If one searches for news on LIBOR (=London Interbank Offered Rate, i.e., the rate at which banks lend dollars to each other in the euro-dollar market), they are currently dominated by Deutsche Bank getting slapped with a total fine of $775 million for the part it played in manipulating the benchmark rate in collusion with other banks (fine for one count of wire fraud: US$150 m.; additional shakedown by US Justice Department: US$625 m., the price...

Read More »

Five Keys to Understand Trump

2017-04-01

by

2017-04-01

The election of Donald Trump as the 45th President of the United States surprised many people, even seasoned political observers and astute investors. He failed to win the popular vote but did carry the electoral college, which is how the US elects its chief executive. His victory is a bit of a Rorshcach test, where people project the issues that allowed Trump to succeed, with different observers making different claims.

Read More »