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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.

Political Economy

Bernanke signals the Fed is uneasy with “reaching for yield”

Sober Look May 13, 2013

As Merrill's junk bond index yield crossed the historical low of 5% on Thursday, some senior Fed officials are clearly becoming uneasy. Corporate credit markets are entering bubble territory (see discussion) and up until recently very…

Markets

Frantically revising Japanese corporate earnings projections

Sober Look May 8, 2013

Analysts' latest adjustments to corporate earnings forecasts for Japanese firms show many more upward than downward revisions. Merrill Lynch tracks the "number of stocks for which consensus EPS estimate has risen vs. the number for which it…

Markets

Chart of the day: US corporate bond yields are at a record low

Sober Look May 6, 2013

Since we've never been at these yield levels, this is uncharted territory in corporate bond pricing. Certainly bond spreads have been lower in the past - especially during the boom years. But in the post-crisis era, corporate spreads seem…

Economy

Ireland hit hard by spring slowdown; markets don’t show it yet It

Sober Look May 2, 2013

It seems that the markets are discounting many of the risks that have plagued Ireland's economy in recent years. Ireland's stock market has significantly outpaced the S&P500 in the last few months - ISEQ is up 20% over the past year.

Political Economy

The ECB will act to avoid a deflationary spiral

Sober Look May 1, 2013

Whatever the case, the ECB will have to act in order to avoid the dangers of a deflationary spiral, which could take the Eurozone years (or even decades) to exit.

Markets

Canadian households may face more deleveraging

Sober Look Apr 14, 2013

Some recent data out of Canada points to a slowdown in growth of consumer indebtedness. According to RBC, the non-mortgage consumer debt has grown at the slowest rate in 20 years. This is clearly a positive development, but when taking…

Political Economy

Japan: taking QE to a whole new level

Sober Look Apr 9, 2013

The Bank of Japan is taking the concept of quantitative easing to a whole new level. Unlike the Fed who is only focused on treasuries and agency MBS securities, the BOJ is authorized to purchase ETFs and REITs in addition to JGBs.

Economy

Italy is now the largest borrower from the Eurosystem

Sober Look Apr 5, 2013

By Sober Look As European banks find some private sources of capital to fund themselves, they continue to repay their ECB loans - particularly in the 3y LTRO program. FoxBusiness: - Next week, nine banks will repay just over 4 billion euros…

Economy

The trouble in Euro Area economies moves to France

Sober Look Mar 29, 2013

By Sober Look As discussed earlier (see post) the French economy continues to struggle. The nation's consumer recession is now thought to be worse than Italy's. Markit (Trevor Balchin): - “France has overtaken Italy as having the worst…

Economy

Trouble in Canada’s economy

Sober Look Mar 8, 2013

Analysts are beginning to raise concerns about Canada's near-term economic growth. The nation's central bank is holding the overnight rate at 1% and will likely maintain this level for some time to come.