Post Tagged with: "Economy"

The wisdom of crowds and government bond markets

The wisdom of crowds and government bond markets






When you look at how markets are positioned, it’s clear that a lot of people see continued low growth for years to come – a veritable Japanification of the US economy. I hope this is one of those times that markets are wrong. But I am not willing to bet on the hope, just the opposite.

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Abenomics and Japanese growth

Abenomics and Japanese growth






Only during the Great Recession did nominal GDP break out of a tight range – and then, it did so to the downside. We are nowhere near the top of the range now, nor should we expect to be anytime soon.






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Could the UK be headed for an inflationary recession?

Could the UK be headed for an inflationary recession?






The Bank of England kept its key policy rate unchanged at a record low 0.25% . Three dissents show how a weak currency and rising inflation are making it harder to keep rates low. The worst case scenario is an inflationary recession, which would topple Theresa May.






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The economics for populism no longer exist in Europe

The economics for populism no longer exist in Europe






While the economy in the UK was favourable for Corbyn last week, I don’t think the economics support populism elsewhere in Europe right now. Everywhere you look, the populists are in retreat in Europe. And that will give the EU breathing room to put some reforms in place. Let’s see if they do.






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What are credit markets signalling about the US economy?

What are credit markets signalling about the US economy?






The US economy has been very resilient during this post-crisis business cycle, as we are now into our ninth year of economic expansion. Soon we could hit a record for the length of an expansion. Yet, with that backdrop, 10-year Treasury yields were at 2.13% this morning – even as the Fed signals more hikes to come in 2017 as well as reverse QE. I think the bond market is signalling continued low growth and low inflation. Some thoughts below






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The threat of an overheated German economy

The threat of an overheated German economy






The Eurozone economy is doing really well. Some data points to 3% growth. The German economy is doing even better – with some data pointing to 5% annualized growth. But there’s a downside – overheating. And with the ECB at negative rates and engaged in 60 billion Euros of QE to boot, overheating in Germany is a reasonable fear. Some thoughts below






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Markets actually aren’t freaking out about Trump

Markets actually aren’t freaking out about Trump






We are seeing decent selling in today’s US equity markets, with the VIX up some 25%. And most people are pointing to the Trump scandals. But this is only one day. What is happening with Trump – while negative – will not change the arc of the US economy and markets.






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Weekly initial claims down to 236,000 as Q2 heads to 3% growth






The labor market in the US is tighter today than it was at the same period last year. This, in conjunction with the last jobs report, gives cover to the Fed to hike rates in June.






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What the tension in the oil market means

What the tension in the oil market means






As we await the US jobs data, it bears remembering that oil is a big wildcard both on in terms of consumption and investment. Right now, oil is plunging, down as much as $14 a barrel for the Brent variant and $17 a barrel for WTI since mid-April. The question is whether the rout continues.






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April 2017 Jobless claims show the US economy chugging along






Claims data are still consistent with an economy adding 200,000 per month, meaning we should expect a snap back from last month’s low figure when the US jobs numbers are released tomorrow.






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Where Post-Keynesians and Austrians meet on economics

Where Post-Keynesians and Austrians meet on economics






World views derived both from Austrian Economics and Post-Keynesian Economics suggest that so-called secular stagnation and the resulting political radicalization in Europe and the United States are here to stay. Here’s why.






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The Fed will continue to look through weak Q1 data






With demand for long-dated safe assets high, the yield curve will remain under flattening pressure. And that, combined with higher short-term rates will be negative for bank net interest margins and earnings.






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