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How bond market vigilantes force rates higher
I see that Paul Krugman has shifted his rhetoric in a recent post on British government economic policy. Let me explain how in this post so that I can make a point as to how bond market vigilantes actually work.
Chart of the day: US corporate bond yields are at a record low
Since we've never been at these yield levels, this is uncharted territory in corporate bond pricing. Certainly bond spreads have been lower in the past - especially during the boom years. But in the post-crisis era, corporate spreads seem…
A view from Belgium, where EC officials are now officially saying austerity will end
The first thing that jumps out at me is the interview with Marco Buti, who says point blank that austerity must end as it is "pointless". That's huge because he is Olli Rehn's right hand man. And Rehn has just confirmed that the EC is…
US employment surprise, but is it good enough?
By Marc Chandler The US jobs report offered a pleasant surprise after the string of mostly disappointing data. Private sector employment rose 165k and the Feb and March series were revised up by 114k jobs. The 3-and 6-month averages now…
The internet is rapidly moving to mobile
Today's daily commentary is going to be on technology. Over the past few years, I have been writing here at Credit Writedowns that we are in the midst of a massive platform shift in technology toward a mobile-centric world. As Michael…
As the US economy stalls, the Fed’s timetable is getting pushed back
I will make this brief as I believe the links will do the talking for me. As I said yesterday, none of the economic data coming out of the US outside of housing seems to be surprising to the upside. That said, there is one bright spot here;…
On Italy’s decoupling from the periphery and Merkel’s electoral losses
I have been trying to break up the links posts because I have so many. So I have been writing brief theme posts to go with the links as I used to do when I had more time. I want to make this one short here and I have two topics to…
The A-b-e of economics and Japan’s shrinking population trap
Japan is stuck in a shrinking population trap, and neither monetary nor fiscal policy will adequately solve the problem. Continuing to run fiscal deficits in a deflationary environment will only means that government debt is pushed onward…
The ECB’s Draghi sets out a new European economic paradigm
I just finished watching the ECB's monetary policy committee press conference led by Mario Draghi. And the ECB has just announced a series of actions I believe constitute a new economic paradigm for the euro area, one that moves away from…
Draghi Open to Negative Deposit Rate Trumps Rate Cut to Drive Euro Lower
ECB President Draghi confirmed the decisions made today to cut the main refi rate by 25 bp to 50 bp and cut the lending rate, the ceiling of its rate corridor, by 50 bp. Most importantly he seemed more open to a cut in the deposit rate and…