Post Tagged with: "bubble"

An anecdote on the German housing bubble

An anecdote on the German housing bubble






I don’t know if there is a German housing bubble or even whether there will be one. I do know that we hear a lot about it in the press – the result of zero, even negative, interest rates. So let me give you a little anecdote from my trip to Germany last week.

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Property, inequality and financial crises

Property, inequality and financial crises






So where did they get the money?

It’s an all too familiar story. Inflows of foreign capital, mainly from Scandinavian banks, attracted by low interest rates and a population hungry for credit – credit advanced, of course, against property. Latvian house prices soared and there was a construction boom. Easy credit, wealth effects and incomes from construction and real estate activities also fuelled a consumption boom: suddenly Latvia, one of the poorest countries in Europe, was flooded with Porsches and Bentleys.






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Comments on jobs in the U.S., buy-to-let in the U.K., and rules-based monetary policy

Comments on jobs in the U.S., buy-to-let in the U.K., and rules-based monetary policy






No one story sticks out for me today. So I thought I would make a few comments on the stories making the rounds today in the Internet. Let’s start in the U.S.






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Country by country macro update, part 2, September 2014

Country by country macro update, part 2, September 2014






Yesterday, I did a broad overview of four markets of interest to global investors. And I wanted to continue my thoughts on this here with a few more markets and with a deeper dive into some of my thinking about the UK. Britain, Part 2: I want to take the UK on first, because I am doing a headline story […]

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The Fed is already creating the next bubble

The Fed is already creating the next bubble






Last week, I wrote a fairly comprehensive piece laying out some of the macro issues around the Fed and other central banks’ ultra-easy monetary policy. The gist of that piece was that, due to the political economy, monetary policy is now seen by policy makers as a good way to ‘steer’ the cyclical economy through peaks and troughs. Fiscal policy, […]

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Economic and market themes: 2014-06-27 Fed will trigger the next crisis

Economic and market themes: 2014-06-27 Fed will trigger the next crisis






The title here is a bit provocative I know. But it is really something I stole from an article about Stephen Roach’s view that I will use as a jumping off point for my Friday review.






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Some thoughts on the new Internet bubble

Some thoughts on the new Internet bubble






Going back to my comments from yesterday about the utility of macro, I want to talk a bit about credit excesses and valuation manias. The overall gist here is that manias are endemic to our system because psychology plays a big part in social systems. And while it is debatable how well macro policy can “lean against”, it is clear […]

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Economic and market themes: 2014-05-23 Credit excesses everywhere

Economic and market themes: 2014-05-23 Credit excesses everywhere






There are widespread signs of credit market froth. This is a telltale sign of top of the cycle or near top of the cycle excess. Think 2005, 2006 or 2007. The key bit here is that credit markets transmit distress in a way that equity markets do not because when the credit writedowns are forced onto banks, the knock-on effects are severe. Let me go through some of these signs of excess with you. As I do so, let’s be clear that the froth is largely due to investors reaching for yield due to excessively low nominal and negative real interest rates. Financial repression has consequences.






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Economic and market themes: 2014-05-16 China

Economic and market themes: 2014-05-16 China






The Chinese property bubble is bursting
Chinese wage pressure is rising
Chinese search for oil has increased geopolitical tensions






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Bubbles: Jeremy Grantham, Fingers of Instability and the Medium Term View

Bubbles: Jeremy Grantham, Fingers of Instability and the Medium Term View






I was reading a summary of Jeremy Grantham’s remarks in GMO’s recent quarterly analysis. And it occurred to me that a lot of what we see there is predicated on some embedded longer-term assumptions that I want to make clear. Grantham is talking about the potential, even likelihood of a bubble in equities by 2016. This has to worrying because it would usher in another period of deleveraging. But it also assumes that the real economy gets us through 2016 via expansion. Some thoughts below






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Canadian housing, Russian economy, Twitter bubble, and bogus tax proposals

Canadian housing, Russian economy, Twitter bubble, and bogus tax proposals






The Canadian housing market is providing a pro-cyclical boost
Russia is now in a recession
Twitter’s share collapse is emblematic of broader trends
Corporations pay tax for a reason






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Economic and market themes: 2014-04-21 United States

Economic and market themes: 2014-04-21 United States






I have been off since Thursday due to the Easter holiday. But I want to write my traditional Friday post today with a grab bag of different issues I am seeing. I actually just want to focus on the US this time.






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