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A mental model for understanding policy errors and consistency anchors using the Fed and Greece
One of the great things about markets and economics is that there is a lot of uncertainty built into them because, unlike traditional macroeconomic modelling assumptions, real people are unpredictable and irrational. This makes life…
More analysis on the situation in Greece, Denmark and North America
Just following up on yesterday’s post, I want to go into further detail regarding two situations in Europe and pivot to a Canadian-centric look at North America. ALl of these threads won’t tie together but I will see what I can do to bring…
Potential deal in Greece, Speculation on Danish peg and US interest rates
No story is really dominating headlines today. So I thought it would be a good time to look around at a number of different topics I have written on in the past. Of course, Greece is still the biggest issue but it is optimism today instead…
US economic data pointing up, bolstering Fed tightening bias
On Friday, the US jobs data showed that the US real economy is weathering the oil price decline very well as oil sector jobs account for little in the overall economy. Despite the capital expenditure effect on future growth, the US economy…
ECB ends Greek collateral waiver, ELA still available, Greek options limited
Last night the European Central Bank announced that it would no longer accept Greek government or Greek government-guaranteed collateral for loans. This step had been telegraphed for a month but the timing demonstrates how political an…
Syriza and the French indemnity of 1871-73
The euro crisis is a crisis of Europe, not of European countries. It is not a conflict between Germany and Spain (and I use these two countries to represent every European country on one side or the other of the boom) about who should be…
Greek debt swap, dollar weakness and Denmark’s intervention struggles
Three stories dominating the headlines today are the Greek sovereign debt crisis, the euro area’s economic fortunes and crude oil. I want to tell these three stories through the lens of the debt swap proposed by Yanis Varoufakis, through…
The financial crisis end game
It is quite possible that more than one end game will unfold in the months and years to come. For example, we could see a Greek Eurozone exit. Simultaneously, we could have a crisis unfolding across emerging markets, as the strong U.S.…
Revisiting Greek negotiating positions and more comments on capex and interest rates
This post will be a brief revisiting of three recent topics - Greece, oil capex, and Anglo-Saxon bond yields - due to recent news. The recent news reinforces my position regarding the potential for a deal in Greece. On capex reduction, the…
Thoughts on the economic effects of the reduction in capex from the energy sector
The rout in the energy sector is complete now. Cuts in capital expenditure are everywhere you look, not just in shale oil. With oil stocks at a record high level, it is unlikely that a rebound in prices will happen in the near term. And…