The VP Blog

A blog about financial markets and the VP investing framework

Spain will be difficult to contain without help and bank recapitalisation

In our view, the Spanish banking system is in need of wholesale recapitalisation to deal with the sizeable losses in the country’s property market. This will likely include a bad bank provision. Before that happens, the ECB’s open market operations will mainly buy time in the form of liquidity as well as provide banks with money to exchange bad loans for lending to the government.

read more

Variant Perception shortlisted for Wolfson Prize

We are pleased to announce that Variant Perception has been elected as a top 5 entrant for the Wolfson Economics Prize for our piece A Primer on the Euro.  More details can be found at the Policy Exchange website as well as on the Guardian, the Telegraph, the Wall...

read more

CNBC – Guest Host Appearance

Variant Perception will have two guest host appearances tomorrow (Wednesday 4th April) on CNBC. Chief Editor Jonathan Tepper will be appearing at 9 am GMT while Head of Research Claus Vistesen will be appearing 12.30 pm GMT.

read more

Twin Deficits Suggest Turkey and New Zealand at Risk

One of the simplest ways to measure macroeconomic risk is to look at the twin deficit, defined as the sum of current account and budget deficit as a percentage of GDP. Recent blow-ups like Iceland and Greece both scored highest on these fronts. Looking at twin deficits gives a reliable indicator of the individual risk profile for a country in the context of a sudden spike in international funding costs or deleveraging. On the latest reading, New Zealand and Turkey stand out (apart from the usual suspects, ie eurozone periphery and South Africa), with twin deficits well in excess of 10% for both economies.

read more

Australian mining is both cyclically and structurally exposed to a slowdown in China

One of the world’s biggest commodity producers, BHP Billiton, recently got a lot of attention by suggesting that the so far insatiable Chinese demand for commodities may have come to an end. The argument is simple enough: the rate of growth in China is slowing. However, the implications for commodity exporters, such as Australia, who have invested dizzying sums of money in expanding capacity to reflect an ever higher increase in Chinese commodity hunger, may be very big indeed.

read more

Subscribe to VP Lite for blog alerts, regular market themes emails, and more

Company Story