2013

Safe assets are in short supply. If the US government shuts down for a long time, there will be a flight to quality. And the lack of safe assets will support the Treasury market.

Backloaded austerity is the defining paradigm at work in Europe right now. Italian Prime Minister Enrico Letta has called for this paradigm to be bolstered by fiscal stimulus incentives as a quid pro quo for structural reform. I believe he…

Right now, US jobless claims are very low by recent historical standards. I believe this represents a peak for growth in this business cycle. But there are almost certainly seasonal adjustment problems with this data series. Despite…

Here is further evidence that in this environment treasuries are driving "risk asset" valuations. Corporate HY bond spreads are now positively correlated to treasury yields. That's quite unusual because traditionally when treasury yields…

News links for 2 Oct 2013

It isn't yet clear how long the US government shutdown will last or what impact the shutdown will have. Nor is it clear that the US will escape a debt default down the road. Therefore, at this time all that reigns is uncertainty.

News links for 30 Sep 2013

QE is still on, but central banks are pondering exit pathways. Exit requires vacuuming up excess reserves, winding down massive securities holdings, and restoring normal interest rates – all without killing the recovery. This column points…

The German election and the US debt ceiling crisis are the two political events dominating the economic headlines - and for good reason; these two events could have potentially big consequences on the regional and global economy. In the…

News links for 26 Sep 2013