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Predicting Europe’s endgame policy response
This morning I made the argument that the global economy is growing across the breadth of developed and developing economies. I still have a problem with Europe though as I believe the risk is to the downside. Basically, the policy response…
Covenant-light loans are on the rise
The higher demand for leveraged loans is helping to gradually increase leverage of buyout transactions. But a more alarming trend is the sharp relaxation of lending terms - the so-called "cov-lite" (covenant-light) deals. Over 70% of recent…
Risk to the upside in the U.S. contrasts to Europe
The latest data out of Europe shows the economy in the euro zone continuing to expand and suggests that we are probably in a technical recovery. In Europe, however, the threat to recovery is to the downside, whereas in the U.S. the main…
Heads or tails?: The Demographics of Investing
When the working age population grows faster than the broad population, demographics become a tailwind as far as economic growth is concerned. Hence, what is likely to become a significant headwind for advanced economies in terms of…
How’s gold doing?
The chart on gold is not looking very good. And it seems that retail investors have lost interest in the precious metal. Is this a correction within the longer-term gold bull market or is it a new secular bear market for gold? I have some…
US on track for only 1.6% real GDP growth in 2013
The US is now on track to reach only 1.6% real GDP growth for 2013 - in spite of the extraordinary amount of central bank stimulus. The sad part about this weakness is that to some extent it has been self-inflicted. Policy uncertainty,…
The US criticism of Germany’s economic policy is correct
The U.S. Treasury’s semi-annual currency report had surprisingly strong criticism for Germany. The U.S. claims that Germany’s macroeconomic policies are inherently deflationary, creating risk for further crisis. I agree with this criticism…
Former Bank CEO and Treasury official: Issuing Treasurys isn’t government…
Newman: "in my own book the explanation starts the cycle with government spending, thus adding to the money supply, and then issuing treasuries for roughly equivalent amount. The bond vigilantes really have it backwards.