Category Archives: Investment outlook

Real Household Net Worth: Look Out Below?

Even with the wild end-of-day rally yesterday, Steve Roth describes how absent a strong continuation of the snapback, real household net worth is likely to show a year-to-year fall by the end of September. And that’s not a good sign at all.

Wolf Richter: Americans’ Economic Outlook Plunges

The latest poll of Americans’ economic outlook shows most expect things to get worse…and the survey was before the market rout started last Friday.

Michael Hudson: Smoke and Mirrors of Corporate Buybacks Behind the Market Crash

Hudson clearly differentiates what is happening in the Chinese versus the US markets, with emphasis on the role of corporate buybacks here.

Wolf Richter: It Starts – Broad Retaliation Against China in Currency War

Struggling economies that compete with China are going to protect their exports against Chinese encroachment via currency depreciation.

Michael Pettis: Do Markets Determine the Value of the RMB?

A thorough discussion of the background and implications of the so-far modest devaluation of the RMB.

The Decline in Market Liquidity

While the Fed isn’t worried about the fall in market liquidity, experts argue that if investors make abrupt changes in their portfolios, the lack of liquidity could produce a crisis.

China’s Stock Market Collapse

Those who are looking only at Greece and the crazy behaviour of the European Union may well be looking in the wrong direction to identify the next big crisis as it comes.

China’s Stock Market Falling Off a Cliff: Why, and Why Care?

What explains the turmoil in Chinese stock markets, and what does it mean for the rest of the world?

Chovanec: China Destroyed Its Stock Market

China apparently did not get the memo about not letting stock market leverage get out of hand.

Chinese Stock Market Rout Continues; Trading Halted in Over Half of Listed Stocks

The Chinese stock market meltdown is accelerating despite government intervention and is blowing back to commodities markets, including copper and oil, which are trading down based on concern that the stock market plunge is a harbinger of even more economic weakness. And the decline may represent the beginning of the end of the faith in China’s command and control economy.

Ilargi: QE Breeds Instability

Why both Keynes and Minsky regarded low interest rates as poor policy.

Wolf Richter: Get Used to Selloffs, Central Bankers Say as They Fret about the Terrifying Moment When Liquidity Evaporates

Investors act as if they have a right to liquidity. The authorities are trying to get them used to the new normal of higher spreads and risks.

Satyajit Das: My Big Fat Greek Crisis

Yves here. Das published this post in February and I thought it would be useful to reprise it for three reasons. First, it has held up well to the passage of time. Second, for latecomers to the Greek saga, it summarizes the background, the stances of the parties, and key economic and financial considerations. Third, the section starting “Controlled Warfare” (about 2/3 of the way through the post) summarizes the consequences to the lenders of a Grexit. Those risks are why almost no one thought we’d wind up where we are now, with two sides issuing ultimatums a mere two days before a possible Greek default, and why most of the financial media still believes a deal will get done.