Posts

Do budget deficits not matter?

You may have said to your kids, "no screens before midday". Then one busy day when you're too occupied to give it the necessary thought, your kids pick up a screen after breakfast and you say nothing. Then, over time as the event re-occurs, the rule without being spoken, gets re-written.  What we all...

Economics needs to save the day

  The narrative begins to switch from ‘return to work’ to trying to understand what the economy will look like in the weeks and months ahead. I think most people understand (and even the politicians admit) we are not returning to anything like normal in terms of economic activity. Even if we get a...

QE is fool’s gold

The debate continues amongst politicians and medics about how best to return the world to work. I don’t think we know enough about the virus to return in anything other than a slow and phased approach. What I do know is that wearing masks will become as accepted in the West as it is...

Markets are broken

*you know as I write this, Trump keeps mis-speaking, talking about ‘billions’ and needing to correct himself to ‘trillions’ and that is a great introduction to the below. This week was not about the markets. Prices are not relevant right now. I am not thinking here that markets are not important. We are traders...

Time for a reset

Every so often, we get an opportunity to reflect, rethink and perhaps reset. Covid-19 could be one great opportunity. Are we really happy with our lives and the way society conducts itself. If humans have one fault, it is that we share too much DNA with sheep. That is, we herd, we follow and...

Markets get contaminated

Bloomberg had a miserable debate showing this week and was taken apart by Warren. He may well spend far beyond the other candidates but he appears too easy to attack. Bernie is building a base - see the chart below - and with most of the other candidates in-fighting he may well emerge with...

Bernie stands a chance

Whilst the coronavirus will likely last at least a few more months and have a noticeable impact on global GDP, the economy will recover once the antidote is developed. Bernie Sanders on the other hand could be a long term problem for those wanting business as usual. A self-described 'democratic socialist', Bernie represents change...

Trump

Home run

The possible impeachment against President Trump was a remote chance but has ended sooner than the Democrats would have liked. It looks as if Trump is set to be acquitted in his impeachment trial after senators voted against calling witnesses or admitting new evidence. We can now expect him to focus on attacking Democrats...

Panic stations

The recent coronavirus outbreak and the negative market reaction is all part of the path to slower growth. Clearly, this outbreak could not be predicted but US 10 year yields have struggled to make any headway to reach 2%. The selling on Friday in equities and move into bonds was met with little resistance....

It’s the ‘real’ economy, stupid.

Central banks have been expanding the money supply hoping to raise inflation to their arbitrary 2% target. The theory they are working from is that increasing money supply generates aggregate demand through encouraging lending and investment. The problem they face however is that money is not in short supply. Indeed there is too much...