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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.

Markets

BRICs under pressure

Sober Look Jan 28, 2014

As the emerging markets contagion spreads, the BRIC nations are coming under increasing pressure in the capital markets. As discussed previously Brazil and Russia are witnessing new multi-year/record lows in their currency valuations.

Markets

Argentina’s devaluation backfires

Sober Look Jan 27, 2014

Back in early December the government of Argentina raised taxes on credit card purchases in foreign currency to 35% from 20%. Online Christmas shopping abroad became increasingly expensive. However, dollars continued to flow out of the…

Political Economy

Shinzo Abe betting on wage growth

Sober Look Jan 23, 2014

Wage increases are vital for Abenomics - without them the current policies are simply unsustainable (see discussion). If consumers are squeezed (see post), spending will decline and the nation will face deflationary pressures once again.…

Markets

Currencies of natural resource exporters under pressure

Sober Look Jan 21, 2014

Some of the largest natural resource exporters with floating exchange rates have seen their currencies come under significant pressure over the past year.

Economy

Bank reserves and the falling loan to deposit ratio at US banks

Sober Look Jan 20, 2014

While JPMorgan's Loan to deposit ratio is particularly low, the bank is by no means unique. LTD in the US is at the lows not seen in decades. On an absolute basis the gap between deposits and loans is now at some $2.4 trillion and growing.…

Economy

Trust Preferred CDOs now exempt from the Volcker Rule

Sober Look Jan 16, 2014

Yesterday, after some intense industry pressure, US regulators (OCC, FDIC, SEC, etc.) collectively announced that the bulk of the so-called TruPS CDO securities issued prior to May 19, 2010 will be exempt from the Volcker Rule. Let's take a…

Markets

The Fed is preparing markets for its reverse repo facility

Sober Look Jan 15, 2014

The Fed's "full-allotment overnight reverse repurchase agreement facility" - a mechanism to control short-term rates - is no longer just an academic exercise. Given how dysfunctional the interbank market has become, using the fed funds…

Economy

Growth in loans at US banks continues to weaken

Sober Look Jan 13, 2014

Loan growth in the US continues to slow. Credit expansion is certainly not nearly as bad as what has transpired in the Eurozone, but the slowing trend is unmistakable. The current rate of loan growth is now significantly below the nominal…

Markets

US refineries’ production hits a record; reasons for the increase misunderstood

Sober Look Jan 3, 2014

During the month of December large money managers have been once again beefing up their long bets on crude oil. What's driving this push into crude? This drawdown in crude was the result of US refineries firing on all cylinders,…

Economy

When it comes to current account imbalances, one nation stands out

Sober Look Dec 31, 2013

Over the past few decades there has been a great deal of focus on the large trade imbalance between the US and Asia - first with Japan and more recently with China. While that is still an issue, we may be facing a new imbalance that is…