Tag Archives: default

The “Wind and Solar Will Save Us” story is based on a long list of misunderstandings and apples to oranges comparisons. Somehow, people seem to believe that our economy of 7.5 billion people can get along with a very short list of energy supplies. This short list will not include fossil fuels. Some would exclude nuclear, as well. Without these energy types, we find ourselves with a short list of types of energy — what...

In a letter to the editor of The Economist, Moritz Kraemer, sovereign chief ratings officer of S&P Global Ratings, clarifies what it would mean for France to re-denominate French debt: Buttonwood wondered whether Marine Le Pen’s plan to re-denominate French government euro bonds into new francs might constitute a sovereign default (January 14th). There is no ambiguity here: it would. If an issuer does not adhere to the contractual obligations to its creditors, including payment in the...

Risk assets declined across the globe, with European, Asian shares and S&P 500 futures all falling, while the dollar slumped against most currencies after a news conference by President-elect Donald Trump disappointed investors with limited details of his economic-stimulus plans, and the Trumpflation/reflation trade was said to be unwinding. "The risk was always that a president like Trump would end up upsetting that consensus (of faster U.S. growth, stronger dollar) view by introducing...

As tumultuous as last year was from a global political perspective on the back of a rocky start market-wise, 2017 will be much more so. The central bank subsidization of the financial system (especially in the US and Europe) that began with the Fed invoking zero interest rate policy in 2008, gave way to international distrust of the enabling status quo that unfolded in different ways across the planet. My prognosis is...

“The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.” – Daniel Kahneman, Thinking, Fast and Slow A couple weeks ago I was lucky enough to see a live one hour interview with Michael Lewis at the Annenberg Center about his new book The Undoing Project. Everyone attending the lecture received a complimentary copy of the book. Being a huge fan of Lewis after...

Authored by Nick Kounis and Kim Liu via ABN AMRO, Debate about the ECB’s stimulus options have continued to rage, with an equity purchase plan mentioned as a possibility We think the ECB could legally buy ETFs that fit its requirements… … but it would be controversial and we question the benefits An ETF programme could total EUR 200bn, which would not be large compared to the overall QE programme …and assuming a...

By Ronan Manly, BullionStar Much is written in the precious metals world about gold’s characteristics, and how the behaviour of the gold price allows gold to play the role of unique financial asset that retains its purchasing power over time, acts as a safe haven, diversifies risk, and provides hedging benefits. However, much of the material written in this area skips over an explanation of how the simple yet powerful...

After today’s uneventful Fed announcement, all eyes turn to the BOJ where many anticipate some form of “helicopter money” is about to be unveiled in Japan by the world’s most experimental central bank. However, as Nomura’s Richard Koo warns, central banks may get much more than they bargained for, because helicopter money “probably marks the end of the road for believers in the omnipotence of monetary policy who have...

Graham Summers says that central banks have lost control and investors are crazy. They pay the Swiss government for the right to own their bonds. One point is missing: Swiss rates are “more negative than others”, because investors expect a slow appreciation of the Swiss franc. Sometimes it’s critical to look clearly at the big picture. The big picture is that the financial world has allocated capital… trillions of...

Several months ago, as Venezuela’s hyperinflating, imploding economy was spinning in freefall, leading to the dramatic episodes of total social collapse such as those profiled in “Scenes From The Venezuela Apocalypse: “Countless Wounded” After 5,000 Loot Supermarket Looking For Food“, we wrote that the country which recently had “run out of money to print its own money” was preparing to liquidate its remaining gold holdings to pay coming debt maturities. Then, courtesy of an analysis by...