Political Economy

The following is excerpted from today’s UBS research note by Stephane Deo, Paul Donovan and Larry Hatheway on the consequences of a euro break-up. The full note is embedded below.

An excerpt from the August 1932 Republican Nomination Acceptance Speech by Herbert Hoover and commentary about his policy choices and ours today

If real returns remain low, it will skew capital investment. When recession hits, debtors backing those losing investments will be caught out and forced to delever aggressively as resource misallocation becomes evident.

ECRI’s underlying message is this: we are in a decade-long post-credit crisis struggle which will mean high unemployment even if policy makers focused on jobs, which they have not.

The Greeks are starting to play hardball on their private sector debt swap warning the deal could crater if the 90 percent participation is not met. We think there are other reasons why it is trouble.

The fact that Italy's 5-year CDS prices remain elevated (376 now vs 388 on Aug 4 peak) warns that ECB bond buying, fiscal austerity has not convinced private sector investors that the worst is truly past. This offers a poor backdrop from…

This is a temporary tax proposal to demonstrate solidarity in tough times. It reminds me of the solidarity tax Germans paid to deal with their reunification.

If the Chairman has to do something, then the real question is what policy response is adequate to a) reviving asset prices and b) returning the US to trend real GDP growth (since the portfolio balance channel appears to be the only one…

According to an Ernst and Young (E&Y) report Business Risks Facing Mining and Metals 2011-2012, resource nationalism is the biggest risk companies currently face.

You can ignore the markets if you want to. But, in time, the markets will not ignore you – Nigel Farage, MEP