Aug 27, 2015 | Global Economy, Monetary Policy
Stock markets are experiencing a classic crash pattern. Volatility has spiked and sharp sell offs are often being followed by powerful rallies. As with previous crash patterns, we would expect markets to continue to gyrate wildly for around the next 8 weeks,...
Feb 26, 2015 | Global Economy, Leading Indicators, Monetary Policy
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...
Mar 20, 2014 | Emerging Markets, European Economy, Featured, Global Economy, Leading Indicators, US Economy
One of the themes we have been tracking in the past 6 months is the slowdown in global money growth and excess liquidity. The focus on the second derivative is important here. The level of growth in liquidity and money growth indicators is decent but the annual...
Feb 26, 2014 | China, Emerging Markets, Featured, Global Economy
Many emerging markets were in recession last year and are only slowly emerging. Tight financial conditions and flat to inverted yield curves will make the recovery slow and fraught with risks. Global growth will be lower as a result. Flattening and inverted yield...
Feb 14, 2014 | China, Emerging Markets, Featured, Global Economy
The debate on EM economies (and equities) is heating up. Initially this week, we had the financial world equivalent of the pillory with the widely reported closing of a high profile US hedge fund’s EM fund due to heavy losses in 2013. Solemn nodding followed by...
Jan 28, 2014 | Emerging Markets, Featured, Global Economy, Tactical
Emerging markets are being blamed on just about all hiccups and bad surprises currently befalling the global economy and financial markets. However, this is slightly unwarranted and, in any case, not consistent with the evidence. Out of the 9 equity markets up on the...
Dec 19, 2013 | Featured, Global Economy, US Economy
Yesterday’s FOMC saw the first tapering of bond purchases by the Fed, by $10 billion per month. To soothe markets, the Fed also reinforced its forward guidance, making it “stronger and longer”, by a promise to leave the Federal Funds rate close to the zero bound...
Dec 17, 2013 | Emerging Markets, Featured, Global Economy, US Economy
One of the points we have emphasized to clients in the past two months is that many of our indicators suggest that long rates in the US may not rise as aggressively as the consensus expects. In other words, the Fed might stay more dovish than the market expects and...
Nov 15, 2013 | Featured, Global Economy, Monetary Policy, US Economy
One of the themes that we have been highlighting this year is the growing bubble in corporate bonds. It is pointless in the first instance to discuss whether super easy monetary policy that has fueled this bubble is appropriate or not. The main thing for investors to...
