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Sober Look 181 posts 0 comments
Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, banking, asset management, risk management, derivatives, global economy, policy, and regulation, with the emphasis on finance education. Follow him on his blog or twitter.
The widely followed Markit PMI report of China's manufacturing for July was disappointing, coming in at an 11 months low.
Cooking the numbers in Argentina
Argentina's official economic growth surprised analysts with a 7.8% year over year jump in May. But can the growth numbers be trusted?
The Eurozone is trying to repeat Japan’s lost decade
The Eurozone's banks are continuing to deleverage, with total loan balances to euro area residents now at the lowest level in 5 years. What makes the situation even more troubling is that many Eurozone banks banks are repeating the Japanese…
India: reserves declining, record outflows from bonds and shares
Barclays Capital had a sobering update on India today. Apparently June saw the largest outflows on record from India bonds and equities portfolios. As a result, declines in India's foreign reserves are becoming material.
India: Currency weakness could help exports and do damage elsewhere
For India, oil prices currently stand at recent record highs (except possibly the oil India buys from Iran at a discount). Given that domestic petroleum is generally subsidized by the government, this spike is sure to put significant…
China’s short-term rates have stabilized but the yield curve remains inverted
The sharp jump in China's short-term rates has been nearly reversed. Repo rates are approaching their longer-term averages, with the PBoC coming to its senses and addressing the liquidity squeeze.
Banks benefiting from “taper” on both sides of the balance sheet
US equity markets are continuing to price in higher premiums for bank shares relative to the overall market. The increased steepness of the yield curve will mean higher net interest income, as banks borrow at historically low rates from…
India: Let the Rupee fall and enter the currency wars
In the last few days the USD/INR exchange rate exceeded the psychologically important level of 60 for the first time in history. Foreign investors are panicking, as capital leaves emerging markets.
Emerging markets for sale
Floating emerging markets currencies have been under tremendous pressure over the past month, as active investors move out. Slowing growth, political instability, and weaker demand for natural resources have all contributed to the sharp…
Banks can benefit from steeping yield curve though headwinds remain
The treasury curve has steepened materially over the past few weeks, driven by Bernanke's seemingly hawkish statements. One group of companies that will benefit from this adjustment is the banking sector.