The bond market continues to make history as global deflationary pressures and record central bank easing are driving yields to unfathomable levels. Back in November I wrote about “The Race to 0%.” It has now become a race to negative yields. Let’s take a look at a few examples from yesterday. 1) The 30-year U.S….
Global financial markets breathed a sigh of relief today on news that Germany might cut Greece some slack after the latter elects an anti-austerity government: Greek Debt-Relief Talks Possible After Vote, Germans Say Germany is leaving the door open to discussing debt relief with Greece’s next government, lawmakers in Chancellor Angela Merkel’s coalition said, signaling…
The current stock market landscape is screaming troubles. More than just short term variations, we are talking about significant economic developments.The shockwaves from the plunge in the oil price might create a short term bear market or even a short term recession. In this case, one should remain undisturbed and keep searching for companies whose…
The politics that investors seem most interested in is the Greek election on January 25, three days after the ECB meeting. However, there is another election that is receiving practically no attention, but could be very revealing. The prefecture of Saga in Japan holds an election Sunday that could give insight into how much Prime…
The calamity howlers of deflation are out in force this morning owing to an absolute economic non sequitur. Namely, that year-on-year consumer prices in the EU came in at negative 0.2% in December, implying that ECB printing presses need to go into immediate overdrive. Well, of course the CPI has momentarily weakened. Crude oil has experienced a monumental plunge of more…
The business cycle is being incredibly extended with the Fed rate at the ZLB. Effective demand is increased. But in the end, the effects of a low Fed rate cannot keep the business cycle from closing in on the effective demand limit and ending. It can slow down the process, but it cannot reverse the…
Greece and the troika (the International Monetary Fund, the EU, and the European Central Bank) are in a dangerous game of chicken. The Greeks have been threatened with a “Cyprus-Style prolonged bank holiday” if they “vote wrong.” But they have been bullied for too long and are saying “no more.” A return to the polls was triggered…
Greece and the troika (the International Monetary Fund, the EU, and the European Central Bank) are in a dangerous game of chicken. The Greeks have been threatened with a “Cyprus-Style prolonged bank holiday” if they “vote wrong.” But they have been bullied for too long and are saying “no more.” A return to the polls was triggered…
A few years ago I spent a good deal of time overseas. When you travel for an extended period, it is always interesting to begin to understand the perception that people in other parts of the world have about where you come from. When I was living and working in Spain, it was a common…
Chicago Fed’s Charlie Evans appears to have decided to flex his voting member status, Bullard-ness this evening. Speaking during a forum in Chicago, after The FOMC Minutes showed data-dependence was the thing… Evans exclaimed “raising rates would be a catastrophe,” and that “housing hasn’t shown the strength he’d like to see,” prompting S&P futures – with the help…
