Category: Economics

Maintaining Focus should Help Prevent an ASEAN Split


Despite its economic and strategic importance, the United States has not given priority to ASEAN until recently. There was hope that this would begin to change with the US pivot to Asia in 2009. However, up to November 2015, the progress of this ‘pivot’ seemed to be more of a ‘pirouette’. There was little in the way of results except general statements and US leaders often did not come to the meetings. Will the US–ASEAN Summit in Sunnylands, this week prove to be a turning point?

When the Market’s Pendulum Swings too Far


Investors have become unhinged. The increased volatility and dramatic market moves challenge even the most robust investment strategies. This sets off a chain reaction of money and risk management that further amplifies the price action, like an echo chamber. Then a cottage industry of reporters, analysts and bloggers offer explanations often without distinguishing the initial sound from the echo.

Did the End of Last Week Indicate Potential Market Stability?


The outlook for the dollar in the week ahead is not about economic data or the FOMC and ECB minutes.  It is about the stability of the global capital markets.

Many are looking for an event or official action that will stop the rout that is of historic proportions to start the year.  We too have been thinking about what it would take to stop the rot.  However, none of the frequently mentioned events, like an agreement to cut oil output, or for a coordinated policy response by the major countries, is particularly likely. 

Outnumbered by Unorthodox Monetary Policies


In response to the global crisis, central banks have adopted unorthodox policies.  They expanded their balance sheets and broken the zero bound of interest rates.  Many investors have been critical of the central bank action on principle, but what has changed recently is that market developments have provided fodder for the ineffectiveness in practice.

Week in Review: Market Rebukes Yellen, Bonds & Gold Soar while Stocks Fall


More investors are running away from stocks and seeking safe havens as job data weakens, signs of a recession intensify, and Janet Yellen reverses her bullish position on the U.S. economy.  Gold hit its 1-year high on Thursday while U.S. Treasury prices continued to soar as investors crowded into both assets to escape an increasingly volatile stock market.

Enjoy the Weekend, China Returns to the Fray on Monday


After another difficult Asian session that saw the Nikkei fell 4.8% (12.3% on the week), the capital markets against have stabilized in Europe.  Equity markets are mostly higher, with the Dow Jones Stoxx 600 up nearly 2% led by energy and financials.  

Fed Sees Fear in Markets, Risks in Economy


The Federal Reserve warned that continued market volatility was threatening America’s economic recovery.  Janet Yellen said before markets opened that the Fed continues to look closely at market volatility and would raise interest rates gradually, with the pace depending on market conditions. Equity futures rose on the news.

Everybody in, Going Down, No Waiting


The continued sell-off in global equities is the main driver of the capital markets.  It, along with the push lower in oil prices, is pushing core bond yields sharply lower.

OECD Economist: Central Banks Jeopardizing World Economy


William White is a senior adviser to the Organization for Economic Cooperation and Development (OECD), and heads the OECD’s Economic and Development Review Committee. He is making waves with a recent, fairly scathing, critique of various nations’ central banks. According to White, Central banks’ excessively liberal monetary policies are putting the global economy at risk, and he wants things to change. 

How Secret TTIP Deal Will Help Corporates Resist Paris ‘Green’ Pledges


Transnational corporations are secretly and undemocratically, formulating the rules of the TTIP (Transatlantic Trade and Investment Partnership). The world’s largest ever, free trade deal will be the most powerful tool in corporate resistance to the COP21 agreement.

There was great optimism following the pledges made by nearly 200 nations at the COP21 conference on in Paris in December. In setting a goal of net zero emissions by the middle of the century, the Paris agreement went much further than the 1997 Kyoto protocol, which spectacularly failed.