Post Tagged with: "Europe"

Market jitters and fake liquidity in leveraged loans and high yield

Market jitters and fake liquidity in leveraged loans and high yield

With the US treasury yield curve flattening to almost 60 basis points between 2 and 10-year maturities, we need to ask where are the vulnerabilities in the market if this spate of good news ends. I believe we should look at high yield, leveraged loans and commercial real estate

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The economic acceleration in Europe underpins global growth

The economic acceleration in Europe underpins global growth

Since the EU had been a growth laggard due to the European sovereign debt crisis, the pickup in growth there is encouraging. In particular, Italy deserves mention as it has lagged and is where I believe the battle for the EU’s future will be won. Some thoughts below

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The global economy is hitting its stride right now

The global economy is hitting its stride right now

Most of the recent economic news from developed economies has been good. European growth, in particular, seems to have accelerated. Nothing I see in the economic data causes me worry. So I am cautiously optimistic that this upturn will last at least through 2018. So let me go through the data, my outlook and my concerns.

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The limits of monetary policy in today’s fiat currency world

The limits of monetary policy in today’s fiat currency world

As the Federal Reserve meets at Jackson Hole this week, I thought now would be a good time to talk about the limits of monetary policy – and why monetary policy alone cannot restore robust growth. And as I write this I want to make clear the goal of policy and the assumptions I am making.

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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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How Brexit makes Britain poorer, forcing Carney to stay his hand

How Brexit makes Britain poorer, forcing Carney to stay his hand

The risk in the UK is an inflationary recession. For now, Mark Carney is resisting a rate hike. But how long will the Bank of England hold out? And how long can British consumers keep spending if real wages are falling? Two things would ease this pressure. One is some sort of fiscal support for real wages. The second is the fall in oil prices. As in the US, I see oil prices as key.

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Anarchy in UK politics means lower yields and ends austerity as we know it

Anarchy in UK politics means lower yields and ends austerity as we know it

There are several threads I want to comment on in the wake of the UK general election. And from an economic standpoint, the conclusion that follows is that austerity in the UK has now lost its appeal politically. It also means lower yields for longer. Let me explain how I came to this conclusion.

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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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Why Macron’s work was made harder by German regional elections

Why Macron’s work was made harder by German regional elections

Germany held elections in Nordrhein-Westfalen (NRW) this past weekend. And the results, while encouraging for Angela Merkel’s CDU, point to difficulties that lie ahead for French President Emmanuel Macron’s reform agenda in Europe. This is negative for periphery bonds.

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What Schäuble is really saying about Macron and Europe

What Schäuble is really saying about Macron and Europe

German Finance Minister Wolfgang Schäuble talked to German weekly Der Spiegel about the election of Emmanuel Macron as French President, and this interview is being widely quoted in the English-language press without benefit of a translation. Having read the article, I would say there is nothing extraordinary in his commentary. None of his positions have changed. Let me explain what he said below.

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Some brief thoughts on Brexit negotiations and the Norway model

Some brief thoughts on Brexit negotiations and the Norway model

All negotiations are mechanisms to split the benefits of mutually acceptable outcomes. The point is to figure out if there actually is a mutually acceptable outcome, and then to get as much of the benefit for one’s side as possible. The threat of walking away from a deal is the most powerful tool in extracting benefits.

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Britain's Prime Minister Theresa May welcomes European Commission President Jean-Claude Juncker to Downing Street in London, Britain April 26, 2017. REUTERS/Hannah McKay

After Juncker-May, Britain as a tax haven is more credible

Right now, everyone is parsing what the ‘disastrous’ May-Juncker dinner means for UK-EU negotiations and for the British general election. My immediate thought, however, was about Britain as a tax haven. Let me outline why.

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