2013

Just after I posted today, I ran across two posts from March that I wrote on government and private debt that are related to theme of today's commentary on potential housing bubbles in Germany and Sweden. I am writing here to more tightly…

"Not all government debt is created equal. We have bad deficits and good deficits. Good deficits are used to fund investments that will have a positive rate of return, properly determined. Those contribute to GDP."

Deficits present governments with the sole challenge of making good on future promises without inflation. For nations sovereign in currency, the constraint is inflation, not solvency.

The central banks in Sweden and Germany are concerned about overheating economies as the European sovereign debt crisis has led to a net inflow of investment into their housing sectors. If one looks at European economic policy, these…

The Eurozone’s tangle of conflicting goals – a series of ‘trilemmas’ – is not without precedent. This column argues that it is reminiscent of the interwar situation. The interwar slump was so intractable not just due to financial issues,…

News links for 21 Oct 2013

Long-term interest rates may have bottomed several months ago, but rate will remain low for several more months. For good reason, many observers and investors are concerned that the dysfunctional political system in the US will renew the…

After a rough patch this summer (driven by "taper" fears), consumer asset backed securities (ABS) business is heating up again. The bulk of that business is represented by auto and credit card loans. The pick up in demand is visible in the…

News links for 18 Oct 2013

Select two countries with the worst performing currencies (against USD) over the past 4 months and go long equity indices of those two countries. Now select the two best performing currencies and short the indices of those countries (to the…