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Economy
More on why Britain might not leave the EU and how a second referendum could happen
I have long suspected that an act of Parliament would be necessary to formally trigger Article 50. In an 8-3 verdict today, the UK Supreme Court affirmed this suspicion. Theresa May cannot invoke royal prerogative for the simple reason that…
Donald Trump the risk taker, confirmation bias edition
My narrative is going to be that Trump is a risk taker. And the conclusion I have drawn is that this risk taking will lead to big surprises — some of them negative, but some positive. Afterwards, rather than give you a bunch of confirming…
Upbeat about the near-term, dubious on the longer-term
This is a quick post about the US economy. To put it simply, I am upbeat about what the near-term holds for the US economy. I have lots of doubts about the longer term. But whereas I might have led with the doubts earlier in the year, as…
In defense of the Fed’s rate hike campaign
Thought I have been on recession watch for nearly all of 2016, I want to write this post as a reminder that there are upside scenarios for the US and global economy. The Federal Reserve looked forward and felt it could tighten into a…
Some initial thoughts on Trump’s victory
Donald Trump's election as President of the United States last night was a surprising and historic event. I think a lot of people are surprised given UK bookmakers had him at 150 to one odds. I would say the shock politically ranks higher…
Monetary policy is at the end of the line
The last few days have made clear that monetary policy is having less and less impact as time goes along.In particular, the latest salvos from the Bank of Japan smack of desperation, as if BOJ Governor Kuroda has decided to throw everything…
The problem at euro banks
As the Brexit worries began two weeks ago, I flagged Italian banks - more than the UK economy - as one of my principle concerns, because of the potential to cause systemic damage to the euro system. And now the contagion is spreading, with…
The British political landscape after the EU referendum
This is going to be a quick post to update you on where I think things are headed now that we have the two final candidates for UK Prime Minister. My overall view continues to be that the base case is for a moderate negative economic,…
Why I’m on US recession watch despite 2% growth
As I start this post, I am naming it "Why I'm on US recession watch despite 2% growth". I don't know if that name will stick when I publish this piece; nonetheless, that is the theme I am trying to get across. When I look at the economic…
Expansions that didn’t die in their beds but were murdered by the Federal Reserve
I've been following the Fed's forward guidance recently and, frankly, I find it confused. On the one hand, it was a clear mistake to have raised rates in December. We see this now in retrospect due to the tightening of financial conditions…