Published by Edward Markus on May 3, 2013

Favorable prospects for US economic growth?

Slow down temporary? Virtually all over the world, the focus is shifting back towards a growth-led economic model. Policymakers are increasingly prepared to take the risks we listed earlier. Not just central bank governors but the fiscal authorities as well. Even to the extent of allowing public debt to expand – just as long as growth rates improve. This changing mentality should be viewed in the following context: • There is growing awareness that, without higher growth rates, a vicious deflationary...

Published by Andy Langenkamp on Apr 29, 2013

Government Letta to herald new era in politics Italy?

Letta is in for some hard work Italy formed a new government on April 27 after two months of political deadlock. Center-left leader Enrico Letta will be the new prime minister, presiding over a coalition cabinet of former Italian Prime Minister Silvio Berlusconi’s forces (People of Freedom party), center-left politicians and technocrats like formerly deputy governor of Italy’s central bank Saccomanni....

Published by Andy Langenkamp on Apr 26, 2013

End quantitative easing causing bear market later this year?

This blog written by head analyst Edward Markus Presently, many economic forecasts are revised down; not least because growth has declined in recent months. In the US this is because of the fiscal tightening measures, in China it is due to deteriorating exports and restrictions on lending, while growth in Europe has slowed on the back of deficit reduction and sluggish credit supply. For the moment, Japan is the only...

Published by Maarten Spek on Apr 19, 2013

Euro Crisis Could Erupt Later This Year

In the past period, there were signs of renewed confidence in the euro. Not least because the European currency held firm in the face of Italian political uncertainty and the Cyprus crisis. Simultaneously, the yield spreads between government bonds of the weak Eurozone countries and Germany continued to narrow. This, too, suggested that investors were beginning to have more faith in Europe. To an important degree,...

Published by Maarten Spek on Apr 12, 2013

Merkel and the banker’s dilemma

In all likelihood, as soon as central banks stop creating money, artificially boosted asset prices will nosedive, even if economic growth is picking up. Once that happens, the fundamental weaknesses of today’s economies (especially in the weak EMU countries) will immediately come to light. This is exactly what Mrs. Merkel is afraid of. We can describe the current situation as follows. Let’s say that bank...

Published by Andy Langenkamp on Apr 10, 2013

Stormy weather ahead for Europe and Eurozone?

The last couple of days we have seen lots of things happening in Europe that confirm and reinforce the vulnerable position Europe is in: corruption keeps rearing its ugly head, politicians are under fire everywhere, political institutions are losing legitimacy and trust by the bucket load, economic stats and numbers keep disappointing and courts around Europe are threatening structural reforms. Graft undermines...

Published by Edward Markus on Apr 4, 2013

Trends of past period to continue?

A lot to digest for financial markets The Cyprus bailout, efforts to form a new government in Italy, better-than-expected US economic data, and plans in Japan for large-scale monetary easing are the main issues exercising the minds in the financial markets. There is also the recession in Europe, attempts by the Chinese authorities to rein in housing prices, and continuous QE by the Fed. Improved economic data in the...