Posts in Eurozone watch
In the Mouth of Madness

My last post was a copout, but necessary for me to express where I think things stand without going off on a million tangents. I think that maintaining an ultra-cynical view on markets, and the economy, now is critical. Recent political events have injected a huge amount of emotion, and I dare say anger, into the economic and financial market debate. It’s tempting to jump in both feet first, but investors are ill served by letting their own views and biases steer their decisions. This will sound obvious, but it isn’t always easy to follow.

Sometimes, though, a cynical approach can only come after a cathartic release of your own opinion and views. This post does just that, and I am going to piss off a lot of people. So close your browser if you’re not interested.

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Economics, Business, and Finance , European politics and society, Eurozone watch, Global Economy, Politics and society, US Economy, US politics and societyclaus vistesenDonald Trump, Shannon, immigration, Europe, The U.S., Politics
Trade the "Maybes" at your peril

I am in New York this week to see clients and prospects, which is why I haven't yet had time to say much about Mr. Trump snatching the prize or the crazy market moves that have followed. I don't see much change . The espresso in Murray Hill, served by Chinese immigrations, is exquisite as ever and New Yorkers remain notoriously impatient, and bad, drivers. I do notice a big increase in TV-ads for Range Rover and Jaguar, though, so maybe there is a concrete sign of the alleged rapprochement between the U.S. and the U.K. in the aftermath of Brexit and Mr. Trump's victory. 

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Baltic and CEE Economies, Asia, China, Economics, Business, and Finance , Emerging economies, Eurozone watch, European politics and society, French politics and society, Global Economyclaus vistesenTrump
The (Impossible) Economics of Helicopter Money

Interest rates were first slashed to zero, then came successive rounds of QE, and most recently the ECB has led the world's central banks into the netherworld of negative interest rates. Neither of these tools, however, have worked completely according to central banks’ and governments’ wishes. Unless you have been living under a rock, you will have noticed that "helicopter money" has been touted as the next policy tool which central banks will deploy in their attempt to reach their "targets." 

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Economic Theory and Acadmics, Eurozone watch, Global Economy, Monetary Policyclaus vistesenEurozone monetary policy, Helicopter Money, Paul Krugman, Simon-Wren Lewis, Virtual currency, Wilhelm Buiter, ZIRP, liquidity trap, zero bound
Are Negative Interest Rates Ineffective?

The European Central Bank initially received praise for its decision to push the deposit rate below zero as part of its truly unconventional monetary policy. The euro plunged, equities recovered, and euro area manufacturing outperformed its global peers.

Holders of long-term benchmark bonds have been handsomely rewarded by the ECB’s monetary policy experiment as 10-year yields in Germany have resumed their violent decline. And investors expect more, judged by the decline in short-term yields indicating a further interest-rate cut in March of at least 0.2 percentage points.

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Eurozone watch, Monetary Policyclaus vistesenECB, negative interest rates