Dave Giles' Blog: The Stock Market Crash...

Hi everyone and good to be back on my Investment Case. This post concerns the repost of one of the best blogs on Blogger on economic and Investment issues. I am talking about Dave Giles Econometrics Beat which I occasionally already repost. This time it is inevitable given the quality and importance of the link below that I think will be informative and to the benefit of anyone with an interest in Econometrics or Economic issues and specially keen on knowing all there is to know about the problems related with Stock Markets Crashes and subsequent Financial and Economic Crisis! Definitely a good read.

Econometrics Beat: Dave Giles' Blog: The Stock Market Crash - VECM's & Structural Break...: A few weeks ago, Roger Farmer kindly drew my attention to a recent paper of his - "The Stock Market Crash Really Did Cause the Great R...

John Kay FT Comment

It is with a mix of emotion and praise that I post here this video depicting  Dr. John Kay's comment about Quantitative Easing and our current Economic predicament. Since I was living in the UK, I tried always to read and check Dr. Kay' work and articles. He is a respected and listened economist. And quite so that it couldn't disappoint with his take on the paradoxes about the current economic policies in place to deal with the consequences of one of the major Financial & Economic downturns of our recent History. Interesting to think and reflect about the bad balance achieved so far between Fiscal Stimulus, Quantitative Easing, Monetary Policy and the urgent need for Investment and Growth. The results speak for themselves, and the savvy but gentle warning of John Kay just add value to the judgement of all.

Really impressive to me is the recognition of the paradox that, despite our economies are living with real negative interest rates (which is a form of Government subsidy), the so called needed Investment on Infrastructures and sectors of the Economy vital and Strategic to long term Growth aren't taking off. What it all seems instead is that the QE money is being wasted or hoarded by the Financial System. It begs the question: Where do we go from here?!

The Politics of Global Markets

Nice to watch this weekly resume from Royal London Asset Management's director and Head of Fixed Income Jonathan Platt. I think I am safe to say we had an eventful week on many fronts of the Global Markets, specially in some Eurozone countries as well as in Egypt. In matters concerned to the Eurozone it is interesting to note the relatively noncompetitive Italian Labor Markets largely compensated by the good National Saving rates of this Eurozone Country in contrast to others....Looking elsewhere it is also interesting not to notice a mention to the East Asian Markets, perhaps understandably as it is indeed mentioned the good economic performance of the US economy in comparison to other Advanced Economies. And the tapering will eventually occur, and the markets aren't ready!  And finally Emerging Markets (like Brazil or Turkey) are really under-performing and seeing a capital flight and growing inequality that alerts us for Political Risks and its consequences.  

 

And this week China is out of Liquid.....

And following the tone of the last post, we continue the story of the Global Markets for this week and the video below is a FT Emerging China correspondent talk with Wendy Liu of Nomura. They talk about the volatility in the Shanghai Composite index that might have been triggered by China's Central Bank (it seems that all Central Banks are really nervous for the major protagonist roles on the Markets....) hard line. It seems that the hasrd line of the Chinese Central Bank is causing credit glitches...and looking to hard landings...But it might not in the end!

The turning taper won't be soon....

 The communicative acumen John Authers and the dearth of Macroeconomic Knowledge of Gavyn Davies united here in this FT video. I must confess to a bit of personal emotion about  pieces like this, thinking of my long months of reading, watching and on-line indulgence with the Financial Times. Hope for a next time certainly: 

Are we in for Deflation hangover.....

Are we in for a period of difficult and without pain period of Deflation for the global economy. The problems in Europe seems clearly to mirror the Japanese lost decade. Economic performance in the US still remains below expectations, and Central Banks Globally are functioning like ultimate health machines trying to prop up Markets. The net result of all this is very low inflation expectations as Gavyn Davies post here in his Financial Times Macroeconomics' Blog. We maybe need to remember well how one resolves dilemmas ...Any dilemmas!