New Eurozone Debt Crisis?

by Laura Ehrenberg-Chesler on February 15, 2017

in Bonds,currencies,Debt,Foreign Markets

From Stratfor Geopolitical research:

As they look at the turbulence ahead in 2017, European policymakers are watching the eurozone’s bond market with concern. A selloff in government bonds, following the trend worldwide, is adding stress to its already vulnerable economies, especially in Southern Europe. Officials’ concerns are magnified by the uneven pace of the eurozone selloff, which is more rapid for bonds from some members than for others. The resulting spread (differences in yield) between Italian and German bonds, for example, has reached levels not seen since 2012, when a sovereign debt crisis nearly brought the currency union crashing down.
That debt crisis exposed the existence of a “doom loop” created by the tendency by European banks to hold their home government’s debt. The vicious circle of the doom loop could start with markets losing faith in a government’s ability to pay back debt, precipitating a selloff of its bonds. The resulting drop in bond prices would hit the balance sheets of the banks that hold them, making them more likely to need a bailout from their government. This, in turn, could depress investor confidence further, leading to more selloffs that further damage the banks. Despite the danger those practices pose, eurozone regulators have yet to find a way to sever the loop.”

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Flying Cars!

by Marilou Long on February 9, 2017 in lifestyle

Ed Yardeni had an interesting piece this morning about autonomous, or self-driving cars, and then things really got crazy!  Uber is looking at developing flying cars.  From Dr. Yardeni: (4) Auto pilot. If autonomous cars aren’t enough to blow your mind, consider flying cars. Uber Technologies recently hired Mark Moore to become director of engineering […]

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Ed Yardeni’s take on Trump’s “Protectionism” and Global Growth

by Laura Ehrenberg-Chesler on February 7, 2017 in Foreign Markets

“Trump’s protectionist sentiments and pledge to renegotiate trade agreements on a bilateral, rather than a multilateral, basis is the immediate uncertainty confronting America’s biggest trade partners, i.e., all those countries that have enjoyed a wide open market for their exports in the US. They won’t have much choice but to negotiate the best deal they […]

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Fed Leaves Rates Unchanged

by Marilou Long on February 2, 2017 in Economic Indicators

Most strategists think that the Fed will raise interest rates three times in 2017.  At the first meeting of the year, rates were left unchanged.  From the linked NYT article: WASHINGTON — The Federal Reserve is waiting for more information about the Trump administration’s economic plans, just like everyone else. After its first policy making […]

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An Historical Look at Modern “Free Trade”

by Laura Ehrenberg-Chesler on January 30, 2017 in free trade

From Ed Yardeni today: “For the US, this free trade system started to cause problems and to raise protectionist pressures during the 1980s as the US trade deficit swelled (Fig. 1 and Fig. 2). Imported autos made in Japan and Germany gained significant market share in the US (Fig. 3). Many books were written about […]

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A Hard Brexit

by Marilou Long on January 18, 2017 in Brexit

In a speech yesterday, British Prime Minister Theresa May outlined her goals for negotiating the process of the United Kingdom leaving the EU.  The key to her plan is for the UK to leave the single market, and you will begin to see this referred to as “a hard Brexit”.  From the linked Stratfor article: In her […]

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Happy Friday from Crossvault

by Laura Ehrenberg-Chesler on January 6, 2017 in Tribute

Best quote I have seen in a long time. From Abraham Lincoln “The best way to predict the future is to Create It” Happy Friday from Crossvault

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Consumer Confidence Hits 113.7

by Marilou Long on December 27, 2016 in Economic Indicators

Consumer confidence for December came in at 113.7 versus the estimate of 109.  From the linked article: “Consumer Confidence improved further in December, due solely to increasing Expectations which hit a 13-year high (Dec. 2003, 107.4),” Lynn Franco, director of economic indicators at The Conference Board, said in a press release. “The post-election surge in […]

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From our Friend at Sandler O’Neill

by Laura Ehrenberg-Chesler on December 12, 2016 in Economic Indicators

A few days ago our good friend and partner at Sandler O’Neill wrote a short piece about the outlook for the economy, and the markets, since the election. I thought the conclusion was profound and have decided to post it on our blog to share with our friends and clients. “And to feed their cohort […]

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GDP Expands at Highest Rate in Two Years

by Marilou Long on November 29, 2016 in Economic Indicators

U.S. GDP expanded at a 3.2% rate in the third quarter, the highest rate in two years.  It was primarily driven by consumer spending.  From the linked WSJ article: Tuesday’s report also showed that gross domestic product, a broad measure of the goods and services produced across the economy, expanded at an inflation- and seasonally […]

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