Economics

2 December 2014

Currency Depreciation as Monetary Policy

Megan Trainor tells us it is "All About the Base".  It seems like many reporters and analysts may be mistaking her lyrics as it is all about debase, as in currency wars. The latest surge of currency war stories follow the...

2 December 2014

Central Bank Meeting Week Continues

After yielding ground yesterday, the US dollar comes back bid today.  The main driver is the divergence that favors the US.  Specifically, yesterday two people we have identified as part of the troika at the Federal Reserve, from where policy...

1 December 2014

OPEC Forced to Change its Tactics

OPEC is a cartel but it is a strange species in the sense that it only accounts for about 40% of oil production.  In the past exerted its influence by cutting production, as in 2008, and driving up prices.  Now...

1 December 2014

Three Investment Themes Perpetuate and are Strengthening

Throughout the last few months, we have identified three forces that are shaping the investment climate:  the economic and monetary divergence that favors the US, the decline in commodity prices, and a slowing of China. These forces remain intact.  If...

28 November 2014

Obama, the TPP, and Help from – Republicans?

Are the stars aligning for both passage of a trade promotion authority bill by Congress and approval of the Trans-Pacific Partnership agreement? Are the stars aligning for both passage of a trade promotion authority bill by Congress and approval of...

28 November 2014

OPEC’s Meeting Results and Eurozone Inflation Numbers

Two developments are important for investors to know about before the markets open on Friday to close the month.  First, and most importantly, the results of the OPEC meeting are the most negative outcome for prices.  OPEC, which over-produced in...

27 November 2014

Personal Incomes, Jobless Claims Disappoint

Personal incomes rose less than expected and jobless claims surprised analysts with a surge on Wednesday, as growing optimism met with sobering data.Weekly unemployment claims rose to 313,000 on a seasonally adjusted basis, up over 7% from the prior week....

25 November 2014

China Aims High

This geopolitical summit season has consolidated ongoing trends in international affairs. A still-rising China with global leadership aspirations, a resurgent Russia bent on restoring its superpower status, and sclerosis and dysfunction in Western countries is likely to dominate international politics...

25 November 2014

Japan’s Election – Policy or Politics?

Prime Minister Abe is subjecting his ruling coalition — and his nation — to an unnecessary election on 14 December 2014. Abe claims his decision is all about policy, but in reality it is all about politics. His stated rationale...

24 November 2014

Holiday-Shortened Week in U.S. not Short on News

The US dollar has begun the holiday-shortened week on a firm note, but the stronger than expected German IFO report helped steady the euro near $1.2400.  Although the Japanese markets closed earlier today, the dollar rebounded toward JPY118.40, as participants...

24 November 2014

Central Banks Start Printing Presses Worldwide

As disinflation and deflation threatens growth rates in emerging markets and the European Union, central banks have hinted that their monetary policy will become more accommodative in the coming months.From China to the European Central Bank, policymakers are cutting growth...

23 November 2014

One Cannot Separate Politics and Economics

Many people assume that politics and economics are separate spheres.  We find ourselves often harkening back to the even older tradition of referring to "political economy". Harold Laswell, regarded as the father of modern political science, famously defined politics as...

22 November 2014

Global Summits, Global Hopes

For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate...