Category Archives: Investment outlook

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.

Wolf Richter: Last Two Times This Happened, Stocks Crashed

Stock prices are driven ever more by M&A and buybacks….and it won’t be pretty when the fat lady finally sings.

Wolf Richter: Atlanta Fed ‘Sticky CPI’ Soars, Hottest Inflation Since July 2008

A jump in “sticky CPI” suggests the Fed may be close to getting the data excuses it needs to raise interest rates.

Wolf Richter: Why the Heck Is the Trucking Business Slowing Down?

Trucking activity is a long-standing leading indicator of economic activity. It’s been flashing red in recent months.

How Much Did Your Economy Suffer in the First Quarter?

We poll members of the commentariat for readings on the state of their local economy.

How Shale Is Becoming The Dot-Com Bubble Of The 21st Century

The parallels of the dot com era with the shale boom are simply stunning as most E&P companies need to spend well over their operational cash flow.

Witnessing A Fundamental Change In The Oil Sector

The U.S. oil production decline has begun.

Pettifor Warns of GFC 2.0 Approach

Yves here. This is a short but important debate over how much to worry about the upcoming train wreck in emerging markets when the Fed finally gets around to tightening. Pettifor sees it as a potential global crisis event; Macrobusiness sees it as a typical emerging markets bust. The Pettifor viewpoint seems more on target. First, […]

Explaining the Dearth of Private Investment

Business investment in advanced economies contracted sharply during the global crisis and has recovered little since. This column argues that the main factor holding back investment is overall economomic weakness. In some countries other contributing factors include financial constraints and policy uncertainty. Fixing the investment dearth will require fixing the general weakness in economic activity.

Rob Parenteau: Draghi’s Doom Loop(s) – More Than Just the Euthanasia of the Rentiers

Draghi’s Doom Loop(s): why the ECB’s QE, combined with negative deposit rates, could set a 1987 style crash for bonds in motion.

Central Banks Warn: Investors May Get Crushed When They All Run for the Exits

This post illustrates how remarkably short investors’ memories are. Or they may be betting that if they have a big enough hissy fit when monetary authorities raise rates, as they did during the taper tantrum of 2013, that central banks will lose their nerve.