monetary policy

The latest Fed confab at Jackson Hole is demonstrating that central bankers were so keen to avoid taking much blame for the global financial crisis that they also failed to learn critical lessons from it. That lapse in turn is directly…

In a fashion similar to what became known as the "Asian Contagion" in the late 90s, the current stress in emerging economies has been spreading. One of the nations to experience financial stress recently has been Indonesia, Southeast Asia’s…

As major central bankers meet in Jackson Hole, Wyoming, Bloomberg, Bloomberg Surveillance was talking about who is going to replace Bernanke as the head of the Federal Reserve. I especially like the way that Sallie Krawcheck discusses the…

One often hears the refrain "the market is not the economy", but what does that really mean? I am going to explain it in my terms here in the context of the global reflation trade - EM meltdown paradox.

Emerging markets currencies are getting hammered across the board today on the back of the FOMC minutes. Many are touching multi-year or even all-time lows. This provides further confirmation that the Fed's recent monetary stimulus effort…

If you look at the last two posts on this site from Marc Chandler and from Sober Look the connection between Fed tapering and money flows is clear. Hot money is flowing out of emerging markets and into Europe.

For those who don't watch these currencies on a daily basis, these sell-offs seem to happen in spurts - almost at random. But there is a pattern here, particularly in the past few months. Investors are dumping these currencies during…

The same people who have been screaming inflation for the past few years are now saying that interest rates are finally about to explode. This is alarmist nonsense that disregards the influence policy rates have over the term structure of…

Recent developments in the Eurozone, specifically Cyprus where the first EU-dictated bail-in of bank depositors took place, brought to light an important issue which had been hiding in the shadows: the flawed nature of current deposit…

Brazil's financial markets remain under pressure. In spite of some recent interventions, including a rate hike, the currency touched another multi-year low today. The market is "testing" the central bank with bets that the real has more…