Turkey’s currency bubble pops on November 6, 2017Turkey once again is the sick man of Europe, as its currency suffered the worst daily decline since the July 2016 coup attempt after President Recep Tayyip Erdogan was implicated in a US federal money-laundering case. The Turkish lira plunged to an all-time low of 3.882 to the US dollar from yesterday’s close of 3.797 […]
Three reasons to buy Asian stocks on June 12, 2017Emerging Asia has disappointed equity investors during the past seven years. The MSCI Non-Japan Asia Index has gained just 34%, and remains below its 2015 peak, while the S&P 500 rose by about 230%. Asian stocks outperformed during 2017 to date, to be sure, but the performance gap remains enormous. There are several reasons to […]
Does monetary policy still matter? on March 20, 2017Whether the Federal Reserve raises the overnight rate to 1% from 0.75% tomorrow rather than at its May meeting, as expected earlier, is a matter of compelling interest in the financial world. It shouldn’t be – not the way in which previous Fed tightening cycles held the undivided attention of the markets. In 2007, the […]
A mystery solved: Why real yields are falling despite higher growth on February 19, 2017All the major economies are doing somewhat better, but US “real yields” – as seen in Treasury inflation-protected securities, or TIPS – have moved sharply lower after a jump following November’s presidential election. In the chart below, we see the two components of the five-year US government note yield: the inflation-indexed TIPS yield, and the […]
Deutsche Banks problem doesnt mean a broader financial crisis on October 3, 2016Deutsche Bank’s plunging share price raised fears of a new financial crisis on the order of 2008 in the United States or 2011 in Europe. Deutsche, Germany’s largest lender, lost slightly over half its market value this year, and declined by 30% since Sept. 9. German media quoted unnamed Berlin officials warning that there would […]