inflation expectations

The Chinese 2-5 year swap spread has flattening to 1 basis point. The last time it was so flat was 2008.

You tell me.

At the weekend, I saw three articles asking essentially the same question about sovereign debt crisis contagion: why Italy and why not Japan (the US or Germany)? Here's my answer.

Fear mongers want you to be scared to death that interest rates will skyrocket. As I have said many times in the past, long Treasury rates reflect inflation and interest rate expectations. Full stop. The default risk isn’t there since…

For ideological reasons, one might believe that limiting or reducing government is better. However, it does not follow that doing so is a painless exercise.

Last week, when discussing what QE3 could look like I indicated that were the Federal Reserve to start expanding its balance sheet, QE3 will see interest rate caps after a pause and period of reflection. Let me address the differences…

Raghuram Rajan, one of the few mainstream economists to warn of the US housing bubble, has recently written a piece which is highly critical of US monetary policy. His view, one that I share, is that US policy favours debtors over savers in…

I am more cautious than optimistic on risk assets and the global economy. From where I sit global growth prospects are not improving; they are weakening.

The immediate problem is the excess capital investment and the costly maintenance of the projects it has spawned. Longer-term, Asia's growth prospects look good.

So, the data are weakening. What does that portend for the rest of the year? Lakshman Achuthan of the ECRI thinks it means a serious global slowdown. Below is a recent interview he did on Yahoo's Tech Ticker explaining why.