When Mario Draghi pledged to do “whatever it takes” to save the euro in July 2012, nobody expected things to change so quickly. Peripheral bond markets have since turned around sharply, supporting the European economic recovery. But can the improvements be sustained after countries exit their bailouts? [Read More...]
China’s Property Market: Policy Is the Real Risk
Concerns about a possible collapse in China’s property market continue to grow. However, our research suggests that fundamentals are more robust than many think. The biggest danger lies in the potential for policy mistakes. [Read More...]
Virtual Annual Meetings and Premature Bankruptcies
A list containing the number of ways this recession is unique is quite long, which is making navigating these waters as an investor much more difficult. While unrelated, below is a brief mention of two that are on my mind.1) Virtual annual meetingsWith in-person annual shareholder meetings cancelled, every investor can now attend meetings online without booking a flight and a hotel. Not all meetings are created equal. Some have long Q&A sessions for shareholders and in-depth slide decks, while others stick to business and offer little in the way of helpful data points for investors. So while it may be a hit and miss activity, for those companies you follow closely and are contemplating adding or shedding shares, look to take advantage … [Read More...]
China Officials Dig in on Stronger RMB
Recent events in China provide yet more support for our view that the renminbi (RMB) will continue to appreciate steadily—and that the country will proceed more rapidly with its reforms than most people expect. [Read More...]
Could Asia Come to the Rescue in a Global Double Dip?
Expansionary policy in Asia helped lead the world out of its slump after the 2008 financial crisis. While the region doesn’t have as much room for manoeuvre as it did then, we think it has ample firepower to deploy if the global economy slides into recession again. [Read More...]
How women can invest more ethically | Letters
We need to think hard about the kind of future our money is going to support through our investments, writes Mary Stevens of Friends of the Earth. Plus a letter from Margaret SquiresYour article on why women need to start investing to exercise more control over their futures (Why finance is a feminist issue, G2, 9 April) contains much sound advice. However, it neglects an important consideration. If, as Emilie Bellet explains, women are “looking more at where we want to be in 10, 20 or 30 years’ time”, then we also need to think hard about the kind of future our money is going to support. Many women – and men – would be horrified to think that the price for their own security is increased uncertainty and instability across … [Read More...]
Greece Gains Some Breathing Space
Today, New Democracy (ND) leader Antonis Samaras will try to form a government. If he succeeds, an immediate disaster scenario will have been avoided. The question is: for how long? [Read More...]
Draghi’s Dilemma: How to Meet Heightened Expectations
European Central Bank Governor Mario Draghi has raised expectations ahead of this week’s ECB Governing Council meeting. [Read More...]
Signs of Topping in the Consumer Credit Cycle
Don’t bother counting me in the camp that thinks they can predict when the next recession will hit. The current consensus from those who try to do such things seems to be sometime in 2020, but I don’t think anybody really knows. But that does not mean that keeping an eye out for economic signals is not worth doing. If the consumer credit cycle, for instance, is nearing a top, it very well may impact what multiple of current earnings you are willing to pay for shares of financial services companies. When you see strong return on equity metrics for full year 2018 this earnings reporting season, you might consider the notion that further expansion could be minimal. (adsbygoogle = window.adsbygoogle || []).push({}); In recent … [Read More...]
What’s Behind the Risk-On/Risk-Off US Economy?
The US economic recovery is progressing in fits and starts. Short-lived “risk-on” periods, when companies and consumers invest more, seem to constantly give way to “risk-off” periods, with anxiety and fear restraining economic activity. [Read More...]
Policymakers Powerless to Stem Capital Flight from Spain
Capital flight from Spain is accelerating. As foreign investors and banks pull massive sums out of the country, policymakers look powerless to stop it. [Read More...]
Weaker Growth Helps Shift Germany’s Approach to Sovereign-Debt Crisis
Recent German data show clearly that the sovereign-debt crisis is starting to bite. This might help explain why the government has given a green light to the European Central Bank’s (ECB’s) new sovereign-bond purchase program. It may also indicate a more lenient approach to Greece—at least for the time being. [Read More...]
Euro-Area Interest Rates: To Zero and Beyond?
There has been some speculation that the European Central Bank (ECB) may soon push its deposit rate into negative territory. [Read More...]
Squawk: US October Employment report in focus by Steve Miley Today…
US October Employment report in focus by Steve Miley Today Friday 2nd November sees the release of the US Employment report for October. The headline Non-Farm Payroll number is expected to come in… [Read More...]
New Leaders, Same Steady Hand on the Chinese Economic Tiller
The media spotlight is on China’s new president, Xi Jinping. But investors should be watching Li Keqiang, the new premier. It’s Mr Li who will be responsible for combating the country’s slowing economic growth and, with it, potentially the fate of the world’s economy. [Read More...]
Digital Currencies a Silver Lining in the Dark Cloud of Greece’s Economic Crisis
As the world watches nervously, Greece, under pressure from the European Central Bank, takes the serious step of imposing capital controls: Banks are closed, ATM withdrawals are limited and funds cannot be sent out of the country. Capital controls will be in place at least until July 7 after Sunday’s citizens’ referendum that will ask Greeks if they want to remain in the European Union and accept their creditors’ terms. Will Bitcoin benefit from the current crisis? There’s lots of speculation that the rate of adoption of digital currencies may increase more rapidly as a result of the current crisis in Greece. CNN makes the case noting: “The world’s largest Bitcoin exchanges tell CNNMoney they’ve seen a surge of business from Greece.” and “Ten times … [Read More...]
Playing poker in the Eurozone [2/2]
![Playing poker in the Eurozone [2/2]](http://globalinvestmentstrategy.com/wp-content/uploads/2015/04/8a4dyanis-varoufakis1-150x150.jpg)
Andrew Curry writes: In yesterday’s post I looked at the short-run issues about Syriza’s stand-off with Germany and the Eurozone. In this post, I’m going to look at the wider economic issues. Greece is a tiny economy, and its problems are a hill of beans compared to the problems of a stagnating Eurozone which is teetering into deflation. President Obama and the Bank of England Governor Mark Carney are not urging a change in Eurozone policy because they have suddenly become radicalised, but because they are concerned about the weakness of the Eurozone as an export market, and the consequences of that for the global economy. And the whole European project could be jeopardised if it doesn’t create a better economic… [Read More...]