• Why Macron is a risky bet for France and for Europe

    About two months ago I wrote about Emmanuel Macron as a risk, rather than a saviour. Today, following his 1st round presidential victory in France, I feel even more that he represents a risk that is unappreciated. Here’s why.

    Why Macron is a risky bet for France and for Europe
  • Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage

    What about running down the balance sheet — reverse QE if you will? I think this is where the Fed minutes offered some new thinking.

    Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage
  • Why the Fed was talking to big money investors, leading to a major leak

    I think I have the answer to at least one question: why was the Fed talking to big money investors in the first place. My thoughts follow below.

    Why the Fed was talking to big money investors, leading to a major leak
  • Brexit is more important politically than it is economically

    Today’s news coverage is non-stop Brexit. And this is a big event. But it is the political implications which matter; the economic impact will be more muted.

    Brexit is more important politically than it is economically
  • Subprime auto delinquency rate at highest level since financial crisis

    Increased delinquencies in the auto sector will spell trouble given the high LTVs of loans and lower credit scores of borrowers. And I am troubled by the OCC’s depiction of the commercial real estate sector; we could see heavy loan losses there in the next downturn.

    Subprime auto delinquency rate at highest level since financial crisis
  • Will Brexit’s trigger, now set for 29 March, mean recession?

    British Prime Minister Theresa May will trigger her country’s exit from the EU on 29 March, a spokesperson for the Prime Minister has confirmed. Afterwards, the clock will be ticking, as the UK will have two years to wind up any negotiations for exit before the country’s membership ends on 29 March 2019 after 46 years. The biggest questions are what this means for the UK economy, the EU economy and whether it is a precedent others will want to follow. Some thoughts below

    Will Brexit’s trigger, now set for 29 March, mean recession?
  • Europe’s delusional economic policies

    Yesterday three big things happened in three different eurozone economies that I think are interrelated. And I am going to tell you what I believe they mean for the European political economy by tying them together in this post under the somewhat provocative banner of “Europe’s delusional economic policies”. The reason for the title is that what I see happening is an anti-growth economic framework which is having political consequences by fomenting nationalism and anti-EU sentiment.

    Europe’s delusional economic policies
  • If foreigners are dumping Treasuries, how should you respond as an investor?

    One of the lead stories at Bloomberg this morning is an article about foreigners shying away from “financing the US government”. And the conclusion of this article is that it could mean higher interest rates in the US. Is this conclusion the right one though, and how should you respond as an investor? I have some thoughts on that below.

    If foreigners are dumping Treasuries, how should you respond as an investor?
  • If Donald Trump remains a cultural warrior, he will fail

    Early on in President Trump’s new administration, too much of his energy is being placed on divisive ‘cultural’ issues and not enough attention is being paid to economic policies. To the degree Trump has turned to the economy, much of his policy has been focused on issues that will not yield long-term economic benefits but contain considerable risk, like trade with Mexico and China. And so, while Donald Trump is only a few weeks into his presidency, I think we can begin to take stock of what his presidency will mean for the US economy.

    Republican presidential candidate Donald Trump speaks to supporters as he takes the stage for a campaign event in Dallas, Monday, Sept. 14, 2015. (AP Photo/LM Otero)
  • Trump is dead wrong on Germany. It won’t matter though

    The FT is reporting that US President Donald Trump sees Germany as a ‘currency manipulator’ of sorts, a view bound to have negative consequences on bilateral relations. What’s more, according to the Financial Times, Trump’s top trade advisor, Peter Navarro, has accused Germany of using a “grossly undervalued” euro to “exploit” the United States as well as Germany’s own EU monetary union partners. This makes three countries in Trump’s sights: China, Mexico and, now, Germany.

    Trump is dead wrong on Germany. It won’t matter though

All Content

Why Macron is a risky bet for France and for Europe

Why Macron is a risky bet for France and for Europe

About two months ago I wrote about Emmanuel Macron as a risk, rather than a saviour. Today, following his 1st round presidential victory in France, I feel even more that he represents a risk that is unappreciated. Here’s why.

Read more ›
Why the March 2017 jobs report won’t change the Fed’s strategy

Why the March 2017 jobs report won’t change the Fed’s strategy

The 98,000 jobs added to payrolls in the US in March were well below the consensus estimate of 178,000, especially when you consider downward revisions to January and February totalled 38,000. I don’t believe this matters for the Fed though; policy tightening will continue apace.

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Jobless claims and ADP data positive ahead of jobs report

Jobless claims and ADP data positive ahead of jobs report

The consensus for the March jobs report is for an addition of 178,000 jobs. The unemployment rate is expected to remain unchanged at 4.7%. Other data show the risk is to the upside here.

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Water desalination as the cure for shortages

Water desalination as the cure for shortages

A couple of days ago, a study released by Nature Nanotechnology said a new graphene filter could be a major step forward in removing salt from seawater and making it safe for drinking

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Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage

Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage

What about running down the balance sheet — reverse QE if you will? I think this is where the Fed minutes offered some new thinking.

Read more ›
Why the Fed was talking to big money investors, leading to a major leak

Why the Fed was talking to big money investors, leading to a major leak

I think I have the answer to at least one question: why was the Fed talking to big money investors in the first place. My thoughts follow below.

Read more ›
Water and mergers and acquisitions

Water and mergers and acquisitions

This is a follow-up on my entry water post from yesterday. The thesis here is that mergers will be a big part of the landscape as companies seek economies of scale and scope or vertically integrate to deliver water to their customers. But before I go into the corporate landscape, let me continue developing some thoughts on why water matters now.

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Some thoughts on water and climate change

If water becomes a contentious issue, it will have geopolitical and military implications. And we would need to solve the water issue to prevent those implications from leading to nationalism and military confrontation.

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The latest poor numbers coming out of the auto sector

US auto sales have been down persistently on a year-over-year basis during the past several months. March was no different, according to figures released today.

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Quick thought on how jobless claims matter

I have heard some people dismiss jobless claims as a data series for two distinct reasons that I want to flag given my view that claims data matter.

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Was it right to be on recession watch in 2016?

We are now three months into 2017 and we can look back on 2016 as a fairly good year economically for the US. So given that backdrop, was it right to worry about a recession in 2016? And what does that say about 2017? Here’s my view below.

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The US economy is doing OK right now

The US economy is doing OK right now

The composite picture I am getting shows the US economy still in that 2%ish channel it has been in for some time. This is lower than certainly President Trump wants and it is also lower than growth levels at cyclical peaks in the past. But it is still far from recession.

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