The central message encoded in last month's news is that the status quo has changed. We are shifting from the post-crisis recovery to late cycle growth. Only now there is greater concern about large pockets of low-quality debt and the decreased ability of central banks to deal with these problems.
Abenomics looks shaky as Japan revised 2014 second quarter GDP growth down to −7.1% on the heels of its escalating sales tax (from 5 to 8%). Ominously, consumer prices are rising but wages are declining in real terms (by roughly 6%), creating significant difficulties for the Japanese economy. Should this trend continue, Japan could find itself in a crisis of epic proportions.
While the world is seemingly distracted with the loss of Malaysian Airlines Flight 730, the big news this month of course is Russia's invasion and annexation of Crimea. The Fed continues with its taper, and Yellen even gave us some indication that the Fed may start increasing rates late in 2014.
Earlier this week, we asked readers, "What austerity measures likely will be most effective in achieving sovereign financial recovery?"
The recent “bail-in” of Cyprus by the EU, IMF and European Central Bank troika forced depositors in Cyprus banks to turn over about 40% of their assets to the banking system. This action hasn’t caused a bank run in the greater eurozone yet, so we asked professional investors why this is the case.
Predictions of the disintegration of the “European experiment” have yet to be fulfilled despite more than 1,000 days having passed since the eurozone crisis first began. Investors owe it to themselves to consider alternate scenarios.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.