Bonds and Stocks
Footprint of Deflation in Major Advanced Economies
July 27, 2010
The fear of future inflation has ushered in an age of austerity even as prospects for sustained economic recovery among major advanced nations face substantial and unusual uncertainty. It is feared that government deficits, which ballooned in response to a drop in tax revenues caused by the deep recession, will be monetized away by central [...] More
Fear of Financial Contagion
May 4, 2010
The world recession of 2008-9 demonstrated the interconnectedness of global financial markets and how quickly a localized malfunction can destabilize other seemingly insulated and unrelated areas. Excessive sovereign deficit-spending and debt are not unique to Europe or the euro area. Public finances were thrown out of whack in numerous countries by the policy response to [...] More
Market Contagion
February 9, 2010
Although Greece constitutes just 2.65% of the euro area economy, it is understandable why the Greek debt crisis rattled the region’s other markets. One element of Greece’s problems, the unreliability of reported data and past gimmicks used by Greek authorities to meet standards for joining the European Monetary Union, naturally raise suspicions about other members [...] More
January in Figures
January 29, 2010
Risk aversion staged a comeback at the start of 2010 and was manifested in a stronger yen and dollar, lower bond yields, weaker equity markets, and softer commodity prices. 10-Yr Yield 12/31/09 01/29/10 Chg vs End-Nov U.S. 3.83% 3.58% -25 Basis Points Germany 3.39% 3.20% -19 Japan 1.30% 1.32% +2 U.K. 4.02% 3.91% -11 Canada [...] More
December in Figures
January 4, 2010
In the final month of 2009, the dollar and equities advanced. Traditional hard currencies, that is the yen, euro and Swiss franc, suffered the most pronounced losses against the greenback, and the Canadian and Zealand dollars outpaced their U.S. counterpart. The Dow Jones Industrial Averaged lagged behind the rise of other U.S. stock indices and [...] More
November in Figures
November 30, 2009
November was a spectacular month for gold prices and saw North American and Japanese stocks follow incredibly divergent paths. Short-term interest rates remained anchored at very low interest rates, and bond yields, which had risen in October, relinquished all those increases and more. The dollar, pound and kiwi traded significantly lower against the euro, Swissy, [...] More
September in Figures
September 30, 2009
During the past month, interest rates fell modestly for the most part, sterling and the dollar weakened, equities strengthened except in Japan, and gold advanced. Barriers of JPY/USD 90, GBP/USD 1.60, and $1000 on gold were broken. Oil closed not far from its end-August level, and use of the dollar to fund carry trades become [...] More
Does The Japanese Government Bond Market Face Armageddon? Probably Not.
September 8, 2009
A provocative headline on today’s wire services reports High Frequency Economics founder and chief economist Dr Carl Weinberg predicting a “catastrophic” debacle in Japanese public finances under the incoming Democratic Party government, resulting in a near-vertical yield curve. Insofar as Japan has the second largest economy in the world, Weinberg reportedly further projects that this [...] More
U.S. Economic Performance Under Different Fed Chairmen
August 27, 2009
There have been only six chairmen of the Federal Reserve System since April 1951. William McChesney Martin was appointed by Truman and served from April 2, 1951 until January 31, 1970 while at starting age of 44 and an ending age of 63. His father had been a central banker, but Martin’s prior experience had [...] More
July in Figures
August 1, 2009
A frequent risk assumption trade in July boosted equities, depressed the dollar, and produced mixed interest rate movements. Oil prices had fallen around $10 by the 14th but recovered just about all its losses by month-end. Gold recouped half its June decline. 10-Yr Yield 06/30/09 07/31/09 Chg vs End-June U.S. 3.53% 3.48% -5 Basis Points [...] More
