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Commentary
A retrospective on the crisis and thoughts on where we are headed
Today, I am not going to write about a specific topic but rather put together some random thoughts on the direction of the global economy. Next week, I will have some big things to say about the Fed and it's upcoming meeting. So I thought…
Today’s European periphery data points are bleak
Despite all the talk of recovery in Europe, the data suggest that the improvement in Europe is uneven at best now. The core has moved into a cyclical upturn but a lot of work remains in places like Italy and Greece. Today's data points…
Inflation, investing, bond prices and monetary policy
Over the past few years, investors who have expected aggressive monetary policy to produce high levels of consumer price inflation and have invested accordingly have been disappointed. The right question goes to why consumer price inflation…
Some initial thoughts on the US Jobs report, the Fed’s reaction function and tapering
The U.S. Job Situation Summary was released this morning at 830EDT and the headline number of 169,000 jobs added to non-farm payrolls was just below consensus. Moreover, the unemployment rate dipped to 7.3%. Nonetheless, the reaction to the…
Abenomics and Japan’s disastrous macro plans
Abenomics has been very successful in goosing the Japanese economy thus far. However, the question remains whether this success will be short-lived or durable. I believe it is likely to be short-lived because of the policy constraints that…
On the Microsoft – Nokia merger
I have been saying for two years now that Nokia is toast because it has hitched its wagon to an also-ran in the smartphone race. The only out for the company is a takeover by Microsoft and now this is done. Will it work though?
Equity multiples growing at fastest rate since dot-com bubble
The gain in equity prices is now outpacing profits at a rate not see since the heady dot-com days. In fact, on a GAAP accounting basis, profits have been falling. I believe this creates a dangerous situation in view of rising interest rates…
The market is not the economy
One often hears the refrain "the market is not the economy", but what does that really mean? I am going to explain it in my terms here in the context of the global reflation trade - EM meltdown paradox.
Why the EM meltdown doesn’t change my positive macro view
I am alarmed at how quickly economic and market volatility has spread throughout the emerging markets. However, I remain positive about the big picture global macro outlook because recent data show that Europe, the US and now China are…
The emerging market economies are getting savaged
In many different emerging markets, the economy has unexpectedly weakened. We are seeing downturns everywhere from Mexico and Brazil in Latin America to Indonesia, India and Thailand in Asia. At this point there is no common thread on why…