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Commentary
Fed tapering moving hot money from EM to Europe
If you look at the last two posts on this site from Marc Chandler and from Sober Look the connection between Fed tapering and money flows is clear. Hot money is flowing out of emerging markets and into Europe.
Why the rise in US interest rates is capped
The same people who have been screaming inflation for the past few years are now saying that interest rates are finally about to explode. This is alarmist nonsense that disregards the influence policy rates have over the term structure of…
The global cyclical recovery will continue
Three articles in this Wednesday and Thursday's Wall Street Journal highlighted that data point to a continued cyclical recovery despite a lot of doom and gloom from all sides. Let me post extracts from those articles I would like to…
The US market’s advance is predicated on multiple expansion
So the past year has been the year of earnings decline. Yet, the US stock market keeps powering to new highs. What's going on? It's called multiple expansion and it is the hallmark of all bull markets, cyclical or secular. The question is…
The succession battle at the Fed and the Fed’s reaction function
Long-term interest rates are largely a reflection of expected future short-term future interest rates plus a term premium. So when you see yields move up, it reflects either an increase in term premiums from uncertainty or a change in the…
The Fed nomination battle is disastrous for Obama
I will make this as brief as possible. I have just learned via Twitter that President Obama is reputed to have given a "full-throated" defense of Larry Summers in his meeting with Congressional democrats. It is clear now that Obama wants…
European sentiment indicator as an economic indicator
I don't put a lot of stock into economic sentiment surveys but the time series of this particular survey, the European sentiment indicator caught my eye. It suggests a recovery in Europe is almost here.
Why Yellen should be the next Fed Chair
Janet Yellen is imminently qualified for the Fed Chair position. I think it makes no tactical or strategic political sense to pass her over for a male candidate - because it would rightly be considered a 'passing over' and need serious…
Facebook’s earnings confirm importance of mobile
Facebook is up a massive 26% today on the back of strong mobile-fuelled earnings in the second quarter. Having dedicated itself to becoming a more mobile-centric platform, Facebook is reaping the rewards. This is a lesson, however, to every…
The unbundling of the handset subsidy and the coming mobile price war
Real quick here - I wrote you on Friday about T-Mobile USA's moves to unbundle handset subsidies and to reduce pricing. Apparently this is having an impact as all the major carriers have now reacted. Sprint has lowered its unlimited…