Tag Archive: Europe

Necessity is the Mother of Invention – Retirees Desperate Reach for Yield

2017-06-10

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2017-06-10

Ben Bernanke’s creativity inspired a generation of economists and central bankers. QE, ZIRP and NIRP established a new class of economics that is mathematically sound but practically disastrous. Billions of dollars were transferred from savers to investors to boost the economy, but the wizards of quant forgot that something has to give. In this case, it was the formation of a pension crisis that threatens the golden years of millions of retirees...

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Lackluster Trade

2017-05-14

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2017-05-14

US Imports, June 1989 - May 2017
US imports rose 9% year-over-year (NSA) in March 2017, after being flat in February and up 12% in January. For the quarter overall, imports rose 7.3%, a rate that is slightly more than the 2013-14 comparison. The difference, however, is simply the price of oil.

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More Thinking about Trade as Pence and Ross Head to Tokyo

2017-04-19

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2017-04-19

Pence and Ross may "feel out" Abe for interest in a bilateral trade agreement. The US enjoys a small trade surplus with countries it has free-trade agreements. Ownership-based framework of the current account and value-added trade suggest the US trade imbalance is not a significant problem.

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The Global Burden

2017-04-12

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2017-04-12

Germany 2-year Bund Yield 2009-2017
Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it.

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Consensus Inflation (Again)

2017-04-04

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2017-04-04

Europe Harmonized Inflation Consumer Prices , 2013 - 2019
Why did Mario Draghi appeal to NIRP in June 2014? After all, expectations at the time were for a strengthening recovery not just in Europe but all over the world. There were some concerns lingering over currency “irregularities” in 2013 but primarily related to EM’s and not the EU which had emerged from re-recession. The consensus at that time was full recovery not additional “stimulus.” From Bloomberg in January 2014:

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The Power of Oil

2017-04-02

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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.

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Trump: Unilateralism or Isolationism?

2017-03-17

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2017-03-17

Many who think that the US is becoming isolationist are wrong. The thrust is now more about unilateralism. Unilateralism can lead to the US being more isolated.

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Dutch Election: Where Rubber Meets the Road

2017-03-09

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2017-03-09

Populism-Nationalism is not sweeping the world. The populist-nationalist party in the Netherlands will most likely not be a member of the next govt. There is little appetite for a referendum on EU. Nexit may be a clever slogan, but is highly improbable.

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Economic Dissonance, Too

2017-03-04

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2017-03-04

Germany Industrial Production, SA 1997-2016
Germany is notoriously fickle when it comes to money, speaking as much of discipline in economy or industry as central banking. If ever there is disagreement about monetary arrangements, surely the Germans are behind it. Since ECB policy only ever attains the one direction, so-called accommodation, there never seems to be harmony.

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European Commission Offers 5 Scenarios

2017-03-03

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2017-03-03

Europe not dead
EC is committed to the future of Europe. Juncker presented five scenarios. Even if the populist-nationalist do not win the electoral contests, the national identity issues will continue to exert influence.

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Here Are The Best Hedges Against A Le Pen Victory

2017-02-13

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2017-02-13

France "Risk" Over Germany
On Friday, after it emerged that as part of Marine Le Pen's strategic vision for France, should she win, is a return to the French franc as well as redenomination of some €1.7 billion in French (non-international law) bonds, both rating agencies and economists sounded the alarm, warning it would "amount to the largest sovereign default on record, nearly 10 times larger than the €200bn Greek debt restructuring in 2012, threatening chaos to the world...

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These Are The 3 Main Issues For Europe In 2017

2017-01-21

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2017-01-21

What will the year ahead look like for Europe? 2017 will be another chapter in the European Union’s slow unraveling… a process that has been underway for over a decade. The EU is a union in name only. The transfer of sovereignty to Brussels was never total, and member states are independent countries… each with their own interests at stake.

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First ZeroHedge Symposium and Live Fight Club

2017-01-12

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2017-01-12

Fight club MARFA
For over four decades, many of the planet's biggest trouble makers and assholes have met each year in Davos, Switzerland, for the World Economic Forum with the humble mission of, "Improving the state of the world."

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FX Outlook 2017: Politics to Eclipse Economics

2016-12-26

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2016-12-26

Economic Events: United Kingdom, Week December 26
Investors are familiar with a broad set of macroeconomic variables that often drive asset prices. Many are familiar with corporate balance sheets, price-earning ratios, free cash flow, Q-ratio, and the like.

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Toward A New World Order, part III

2016-12-19

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2016-12-19

A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement. We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how this translate into domestic politics in Toward a New World Order Part II. We will now continue this series by showing how gross economic mismanagement have created the new political class that we...

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Toward a New World Order, Part II

2016-11-12

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2016-11-12

One of the most widespread misconceptions in the realm of politics is the notion of a left-right axis. This has been used over and over to explain political outcomes and paint the various factions as polar opposites. For example, in the US the two main parties, the Republicans (right) and Democrats (left), are often portrayed as a fight between good and evil.

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USD ready for a second leg higher – then what?

2016-10-17

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2016-10-17

One year ago we showed the following chart to explain the relative strong dollar that was on everyone’s mind at the time. With a second leg higher in the US dollar imminent, this particular chart will be more important than ever. Claims to dollars, such as demand and time deposits, or even more opaque money-like products created by the shadow banking system is just that, a claim or derivative on the final mean of payment, namely base money.

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Norway: Towards Stagflation

2016-08-19

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2016-08-19

We have all heard the incredible stories of housing riches in commodity producing hotspots such as Western Australia and Canada. People have become millionaires simply by leveraging up and holding on to properties. These are the beneficiaries of a global money-printing spree that pre-dates the financial crisis by decades.

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Brexit or not, the pound will crash

2016-07-16

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2016-07-16

Status quo, as our generation know it, established in 1945 has plodded along ever since. It is true that it have had near death experiences several times, especially in August 1971 when the world almost lost faith in the global reserve currency and in 2008 when the fractional reserve Ponzi nearly consumed itself. While the recent Brexit vote seem to be just another near death experience.

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