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Some brief thoughts on the eurozone breaking up
Summary: Recently, Niall Ferguson reminded us of the eurozone pessimism of 2011 and 2012 in a recent polemic against Paul Krugman. Without getting into the Krugman-Ferguson war, I want to hone in on this subject because I think it tells us…
The US government shutdown, currency sovereignty and sovereign default
As the US government shutdown continues, the risk of default grows. Below are some thoughts on why this has played out as it has and what the outcome may be.
Is the US shutdown bullish or bearish?
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.
Europe: Italy’s call for a stimulus – structural reform trade-off will happen
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…
Jobless claims suggest US GDP growth is peaking
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…