interest rates

Nouriel Roubini seems to think so. In remarks quoted via Bloomberg, he called the enormous increase in asset prices “the mother of all carry trades.” Investors worldwide are borrowing dollars to buy assets including equities and…

In today’s morning with Dave article, Gluskin Sheff’s Chief Economist and Strategist says the macro environment makes it look like 2007 all over again – as if the crisis never happened. It’s like 2008 and early 2009 never happened. Hong…

There is an enormous dichotomy in foreign exchange markets that has wide-ranging implications for the global economy.  In Europe, most currencies float freely against the U.S. dollar. In Asia and the Mideast, most do not. What this…

I tend to think so. Yesterday, Ben Bernanke made what some media outlets are calling hawkish statements.  This, combined with heavy currency intervention by Asian central banks, helped to strengthen the U.S. dollar. However one must…

The Reserve Bank of Australia unexpectedly raised rates by 25 basis points to cool down its economy. It will “gradually reduce stimulus” in anticipation of sustained recovery. Australia has probably been the major economy least affected by…

Marshall Auerback pointed out a statement from Dallas Fed Chief Richard Fisher today that is not getting a lot of attention despite its importance.  He said: I expect that when it comes time to tighten monetary policy, my…

One other reason to sell the dollar is interest rates.  Why not borrow in dollars where interest rates are low and invest elsewhere where yields are high?  This is what is known as the carry trade. In the past decade, the Japanese yen…

Yesterday I mentioned the announcement by the FDIC to end its debt guarantee program and opined that this was the first sign of tightening/liquidity withdrawal by the U.S. government.  Today the evidence is mounting that this is indeed…

Earlier today I posted an article about how accounting was favourable to banks in that it could help them weather the storm and appear well-capitalized until a recovery is underway.  Afterwards, a buoyant economy would increase…

This analysis comes via Brown Brothers Harriman (I have bolded a few lines): Mexico's central bank is widely expected to cut its overnight rate by 25 bp today. That would bring it to 7.25%. Last month it delivered a 25 bp rate cut too.…