WeWork as an intermediary with a duration mismatch
Back in May, I wrote a post I titled "2019 may be the best time to IPO". The gist of the post was that unicorns were seeing the best market conditions imaginable for conducting an initial public offering. But, the window for loss-making…
Policy divergence and the week’s monetary policy decisions
With the latest Fed and ECB rate policy decisions now behind us, we can start to assess what monetary policy means for the near-term future. I continue to be encouraged by near-term data flow in the US. Nothing in it reads recession.…
Watch for a re-emergence of the convergence to zero play
Understanding curve flattening
Long-time readers know that I have talked for a number of years about a longer-term global convergence to zero play that I see shaping up. It first emerged during the mid-cycle slowdown in 2015 and 2016 as…
Ever closer union and euroscepticism
I haven't written about Brexit in months now, largely because it has become so unpredictable that I have had nothing to say. After we saw the delay that I predicted in December, the whole affair has just had too many moving parts to know…
The dollar liquidity squeeze and Germany’s weak real economy
Real quick here on Europe as I promised yesterday to add some thoughts on Germany after my trip to Cologne
US base rates are too high
Take a look at this chart from Bianco Research.
Jim Bianco describes this as showing the US having the…
Positive thoughts on my return from Germany and London
I was in Cologne and London last week, two places I know quite well. And as I went out, my trip down memory lane was greeted by the eternal progress of human endeavour. Whether riding the frequently behind schedule Deutsche Bahn by the…
The end of global co-operation among liberal democracies
I am back from my beach vacation. So, let me outline what my thinking is after a period of reflection and how it has changed or stayed the same.
I last posted more than a week ago right before I left, regarding my frustration about…
Our over-reliance on monetary policy is the problem
I am going to argue here that monetary policy is both less effective than fiscal policy, and that over-reliance on it unnecessarily politicizes monetary policy by putting unelected officials in too prominent an economic role.
I would argue…
The Fed overtightened. Now it’s behind the curve. Recession awaits
Sorry for the alarmist post title. But the Fed has completely bottled it. I've been warning for some time that it could go this way. And now, we are in in the endgame.
First, the Fed overtightened through 2018. Then, forced at gunpoint by…
Why my base case for 2020 is recession
Back at the end of July, I was talking about my macro thesis. And I led off writing this:
The US is the laggard in this slowing but is affected as well. From a markets perspective, that means a convergence to zero, with yield curves…