Credit Writedowns

In the wake of the financial crisis, some US policy makers understood that the economics profession had erred in not taking debt aggregates and financial stability into account when conducting macroprudential regulation and making economic…

News links for 2014-03-26

We view Q1 2014 as a potential turning point for EM this year, just as the May 22 Bernanke speech on tapering was last year. In recent weeks, EM has digested the start of Fed tapering, devaluations in Argentina and Kazakhstan, the Crimean…

By Marc Chandler There seems to be a stepped effort by ECB officials to talk the euro down. The process began with Draghi last week indicated that the euro has become a more salient factor as it poses a deflationary risk and threatens the…

It is now patently clear that US equity and corporate bond markets are overvalued. Much of the overvaluation has to do with low discount rates and the risk-on signal easy Fed policy has sent investors for over five years. Yet again, signs…

News links for 25 Mar 2014

Market based information is telling us that spreads and leverage are now disconnected, fundamentals remain in-line with theory. Companies with higher net debt also have poorer liquidity positions.

I ran a bit late this morning. SO there will be no daily commentary until tomorrow. It is a slow news day, in any event. I think the links here capture the essence of what's happening. Europe BBC News - French business output grew in…

By Frances Coppola Scott Sumner argues that when the monetary base is fixed, low interest rates are deflationary. I've emphasised the fixed monetary base because it is an important condition. If the monetary base is NOT fixed then the…

By Marc Chandler There have been three flash PMI reports today, and each was surprising. China and Germany surprised on the downside while the French surprise was on the upside. HSBC's flash read on China's manufacturing sector weakened…