2013

In spite of some positive economic signals out of the Eurozone, the area continues to struggle with credit growth. The latest loan growth measures still look quite bleak. We may however be seeing the first signs of the bottoming out of…

The dollar is broadly higher against the major currencies, with the Swedish krona and euro suffering the most. Poor retail sales in Sweden and unexpected weakness in the German labor market report (unemployment rose 7k vs the consensus…

News links for 28 Aug 2013

The capital outflow from the emerging markets is proving as destabilizing as the previous inflows. Pundits can talk about currency wars all they want, but the real issue is the ability to cope with volatile capital flows, which is the…

Everything I have read says that the U.S. is going to bomb Syria. The only question is how to win over the American people in the court of public opinion. So that's where the Göring quote comes in. Basically, he's saying that dictatorships…

Yesterday, we learned that the Case-Shiller Housing Index is up 12.1% through June. In response, Robert Shiller said "housing is a market with momentum" and he believes that the momentum is up. Let's remember that the Case-Shiller Index is…

This is beginning to sound like a broken record, but India's currency has come under severe pressure - again. India's central bank, the RBI, seems to have completely lost control over the rupee. The currency broke through 67 to the dollar…

The problem in a nutshell is that the U.S. is the world's reserve currency. And so, other countries are forced to adhere to Fed dictates in a liquidity crisis because everyone is hoarding dollars, trying to maintain their supply of…

The histogram below shows the total return of long-dated treasuries over a rolling 4-month period since 2007. The leftmost bucket contains five periods that constitute the worst treasury losses since 2007. All five of these periods ended…

The latest Fed confab at Jackson Hole is demonstrating that central bankers were so keen to avoid taking much blame for the global financial crisis that they also failed to learn critical lessons from it. That lapse in turn is directly…