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Browsing Tag
investing
2015 as 1994: more on Fed hikes this year
Bill Gross and David Rosenberg are two smart investors who represent the dichotomy in markets right now. Rosenberg doesn't see the Fed hiking rates until 2016, while Bill Gross points to June (link here). Which side of this debate you take…
Some thoughts on relative value in the US and Europe
Despite the crisis in Greece, I have been talking about rotating into Europe because I believe equities are priced more reasonably than the US and because fixed income assets will get a boost from QE. I want to talk a bit more about this…
Greece, Eventual Grexit, and European Asset Values
I am positive about European assets on a cyclical basis. European shares are cheaper than their American counterparts and European QE provides an underpinning for European sovereign debt. As long as Europe continues to muddle through,…
A mental model for understanding policy errors and consistency anchors using the Fed and Greece
One of the great things about markets and economics is that there is a lot of uncertainty built into them because, unlike traditional macroeconomic modelling assumptions, real people are unpredictable and irrational. This makes life…
US economic data pointing up, bolstering Fed tightening bias
On Friday, the US jobs data showed that the US real economy is weathering the oil price decline very well as oil sector jobs account for little in the overall economy. Despite the capital expenditure effect on future growth, the US economy…
Revisiting Greek negotiating positions and more comments on capex and interest rates
This post will be a brief revisiting of three recent topics - Greece, oil capex, and Anglo-Saxon bond yields - due to recent news. The recent news reinforces my position regarding the potential for a deal in Greece. On capex reduction, the…
Pie in the Sky
We are still in a post-crisis environment, and enough people are still negative on equities, and interest rates are low enough, to provide plenty of purchasing power. We therefore expect it to be an ok period for equities over the next year…
The convergence of safe asset yields toward zero favours Anglo-Saxon bonds
As low nominal GDP growth takes hold, we should expect short-term interest rates to remain low and for the yield curve to flatten. There are three main reasons this is so. First, low nominal growth rates imply low inflation. Second, to the…
US jobs, high yield covenant-lite issues and the Greek restructuring negotiation
Two topics are dominating the news of late: the decline in energy prices and the upheaval in Greek sovereign debt due to the upcoming general election. On the first issue, I have been generally positive about the economic impact because…