The VP Research Blog
A blog about financial markets and the VP investing framework
Turkey’s External Debt Remains Worryingly High
Excerpt from VP Tactical first published on 14th April 2014: We have been flagging Turkey as our top candidate for a currency crisis since we released our Understanding Debt and Currency Crisis thematic in 3Q14. Although the lira has collapsed from 2.15 then to 2.65...
US Manufacturing – More Weakness to Come
US manufacturing has slowed in recent months, and we expect more to come. We had noted the discrepancy between the PMI and ISM surveys earlier this year as it looked like the ISM was outputting data inconsistent with our leading indicators. The ISM has now fallen...
Downside Data Surprises Continue in Canada
First Published in 24th March Tactical For the past 6 months, we have been alerting clients to the persistent decline in our Canada leading indicator. This is now showing up in numerous Canadian coincident data releases, with retail sales being the latest to miss...
European Monetary Policy: Too Hot or Too Cold for Housing
The euro is not an optimal currency area, and monetary policy will be either too hot for the core or too cold for the periphery. Today, monetary policy is too hot for Germany, where we see rising house prices due to a monetary policy that has been geared at the...
Yield Curves Flattening Everywhere: Global Growth to Slow
As we remind our readers often, yield curves are one of the single best leading indicators. A yield curve inversion has predicted every US recession since 1945, with only one false positive, in 1966 (although the false positive preceded a downturn in industrial...
Growing number of lower paid workers in US
The participation rate in the US has declined much less for those at lower levels of education: Source: Macrobond That the lower educated are disproportionately supporting employment growth, through lower paid jobs, may help explain why, so far, we have not seen...
Eurozone Deposits Growing Again
The ECB’s loan demand surveys (which lead by about 12 months) have been suggesting higher credit growth ahead for some time (top chart) and there are signs that this may finally be occurring. The bottom chart shows that overall eurozone deposits rose in November,...
Emerging Market Valuations Will be Compelling
A weak oil price and a strong dollar rally will put pressure on emerging markets, but valuations for many emerging markets should soon be compelling. Emerging markets have been in a downtrend relative to the S&P since 2010. We will likely see further weakness...
Top Ten Posts of 2014
As we head in to 2015, here are the top ten posts from 2014. We wish our readers a Happy New Year! Top 10 Posts of 2014: Profit Margins To Head Lower, Equities To Suffer (May 22nd) Deflation Not A Danger - Modest Inflation With With Wage Growth Ahead (June 9th)...
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