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The deteriorating economic climate in Italy
When it comes to the euro zone, most eyes are fixed on Spain and Greece where a debt deflationary death spiral has begun. But the economic situation remains fragile in other countries of the so-called periphery. Italy is the largest…
Why negative nominal rates may be the Fed’s next big move
This crisis has broken a lot of economic taboos, with central banks buying up assets and expanding their balance sheets in a desperate effort to reflate a debt-laden private sector. The goal is to maintain economic growth, even at the risk…
Why Apple’s margins are eroding as it tries to maintain share
In March, I wrote you about my concerns about Apple's ability to maintain growth expectations without margin slippage. My view was then and still is today that Apple faces a choice of maintaining either margins or growth in both handsets…
The Spanish Budget 2013: pension raid may forestall sovereign bailout
Now, we come to the Spanish budget. The austerity here is a lot more real than it is in the French budget. As I have been saying for a number of weeks, the goal of the Spanish government is to present an austerity budget that gets approval…
The French Budget 2013: not very austere
I am going to use two news sources here, Liberation and L'Expansion to dissect the proposed 2013 French budget, which was released earlier today. France is significant because, along with Germany, it represented the pre-crisis axis around…
US economic surprise index sharply higher going into election
A quick post here. Sober Look has posted on Citigroup's economic surprise index, noting that it has started to roll over again, ever so slightly. But the trend is clear for the past two to three months and it has been sharply higher,…
Is it inflation or negative real rates that matter now for investors?
I participated in a Euromoney conference on investing in inflation this afternoon. I was on a panel of five right before the closing remarks by keynote speaker Dennis Gartman and I wanted to make a few remarks about what I learned.
First,…
Rajoy was hoodwinked and now Spain faces a debt deflationary spiral
Two weeks ago I told you that Spanish Prime Minister Mariano Rajoy’s humiliating defeat to Merkel had narrowed options to sovereign bailout, monetisation or default for Spain. Now that the Spanish bank bailout is unraveling and Catalonia is…
Biflation: inflation in the things you need, deflation in the things you don’t
I am going to be speaking on a panel on "Investing in Inflation" tomorrow. And I thought I would put forward some ideas here regarding what I intend to say. The key word describing where we are is biflation, meaning inflation in some things…
On optimism in the face of deflationary crisis responses, part 2
This is a brief follow-on to the last post on whether we should be optimistic, in particular now that the US housing market is improving. If you think about it, the problem now is that all debtors - public and private - are taking the…