Bloomberg – Why China Can’t Free the Yuan By some measures, China has braved the storms buffeting its currency. The yuan is up 4 percent so far this year, and foreign-exchange reserves are up by $70 billion. State media has even called for relaxing capital and exchange-rate controls. But that would be like a sick… Continue reading Chinese Capital Controls
OPEN What To Make Of Trump And The Trump Trade In our latest webcast, Ben Breitholtz and Jim Bianco discuss the “Trump trade” in the market. As long as Trump continues to roll back regulations, the political theater surrounding Washington D.C. will have little effect on the markets. Additionally, Trump’s approval rating,… Continue reading What To Make Of Trump And The Trump Trade
Bloomberg – Good Reasons to Dismiss Market Fears, For Now Short-term shocks — even nuclear threats — don’t worry investors. Risk assets across the globe, despite already high valuations, have recovered impressively from a sell-off triggered by concerns about a North Korean nuclear attack. In doing so, they have again highlighted the extent to which traders… Continue reading Political and Market Volatility Show No Relationship
Bloomberg – OPEC Hits Summer Slump on Oil-Cut Goals OPEC’s effort to end a worldwide glut seems to be flagging. For the second straight month, the group’s compliance with agreed production cuts stayed below 90 percent, as nations including Saudi Arabia pumped slightly more crude, and others, such as Iraq and Algeria, still haven’t trimmed as… Continue reading Energy Sector Expecting Lower Oil Prices
Bloomberg – GMO’s James Montier Picks Emerging Markets in World Starved of Value Spread between EM and U.S. shares is in 90th percentile: GMO Developing-nation stocks may return 2.9 percent annually over the next seven years, while emerging-market debt could yield 0.7 percent a year, according to an analysis released this week by Montier and Matt… Continue reading Managers Still Bullish on Emerging Market Equities
Bloomberg – Fed Starts to Wonder If Cornerstone Inflation Model Still Works Conviction in inflation forecasts is beginning to fray Federal Reserve officials are looking under the hood of their most basic inflation models and starting to ask if something is wrong. Minutes from the July 25-26 Federal Open Market Committee meeting showed a revealing debate… Continue reading The Fed’s Grip on Obsolete Models Likely to Loosen
The Financial Times – The perils of calling the peak of the equities bull run By many measurements, today’s stock markets are overvalued but investors are struggling to work out when or if a crash will come A danger of releasing some of the pressure that has held down borrowing costs is that tighter monetary policy… Continue reading Stock Market Valuations & The End Of The Bull Market
Bloomberg View – Liam Denning: The Energy Revolution Will Be Optimized In its long-term forecasts released in January, the EIA projected overall U.S. energy consumption to essentially stay flat through 2030. And “flat” is a four-letter word in any industry — especially one in which growth has been reliable for two centuries. The predictable response… Continue reading Energy Supply/Demand
The Financial Times – Over $9tn of bonds trade with negative yields From less than $1tn in 2007, the Federal Reserve’s balance sheet has more than quadrupled in size. As the financial crisis spread to Europe and Japan, the European Central Bank, Bank of Japan and Bank of England joined in the expansion. All told,… Continue reading More On Negative Yielding Bonds
Bloomberg Business – Fed Officials Split Over Timing of Next Rate Increase Federal Reserve officials meeting in July split over the timing of future interest-rate increases as they struggled to understand why inflation has been so weak in recent months. But they agreed to soon begin the yearslong process of drawing down the central bank’s… Continue reading Timing The Next Rate Hike
The Financial Times – Nothing like this has happened in 323 years The Bank of England was founded just over 323 years ago, in July 1694, at the instigation of King William III. It is the second oldest continuously-functioning central bank in the world, after Sweden’s Sveriges Riksbank, founded in 1668. The Bank of England… Continue reading This Time Is Different: BOE Lending Rate