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Markets
Divergence in ECB and Fed rate regimes will drive portfolio shifts
The big news today was the ECB’s decision to lower interest rates 10 basis points to 0.05% and its simultaneous decision to engage in a form of quantitative easing using the asset-backed market as a vehicle. While these measures are…
A government bond bullish scenario is taking form
Welcome back to Credit Writedowns!
Labor Day is behind us now and I intend to have a much more regular posting schedule going forward. But the lack of posts has given me some time to reflect on the global macro situation without the need…
Edward Harrison’s Ten Surprises for 2014, Update 2
Today is the time to update you on how my 2014 surprises are faring and why. Just to remind you, the surprise list is based on Byron Wien’s list of ten surprises which he has been conducting for the last thirty years. Surprises are events…
The Fed is already creating the next bubble
Last week, I wrote a fairly comprehensive piece laying out some of the macro issues around the Fed and other central banks’ ultra-easy monetary policy. The gist of that piece was that, due to the political economy, monetary policy is now…
The ECB easing decision could lead to a major break with Germans on policy
Summary
The ECB did the expected this morning and lowered interest rates enough to send bank deposit rates at the ECB into negative territory. The ECB also met market expectations with an additional easing measure by implementing an LTRO…
The negative German reaction to potential unconventional measures at the ECB
Yesterday and today, the German newspaper Frankfurter Allgemeine Zeitung had interesting articles on the ECB’s dilemma from a German perspective. I want to use these as a jumping off point for a discussion about Europe. The question is how…
Intersection of real economy, monetary tightening and credit froth means volatility
Money supply and LEI in the US are pointing down
Fed hawkishness is increasing
Credit excesses continue in high yield
Iran real beneficiary of Russia-China gas deal and more on overheated markets
The big news today is the Gazprom deal in China. This is a $400 billion gas deal to supply gas from Russia to China for 30 years that has been in the works for over a decade. But the changing geopolitical atmosphere has given it urgency.…
Steve Hanke on currency boards and Paul Brodsky on bottom-up investing
I haven’t posted to the blog portion of Credit Writedowns for some time because my schedule has been filled producing the finance show Boom Bust on RT. So I apologize for not having a lot of content for you. Last week, I hosted my first…
On Europe’s move toward QE to prevent deflation
There is a battle within the European Central Bank. Some want to take stronger action. Others do not think it is necessary. It is not just a matter of counting up who is on what side of the issue. It is not simply about majority rules.…