Asking the Right Questions
QE to infinity!
Memories of 2008… On Wednesday the volatility in financial markets had many recounting their memories of 2008. The CBOE Volatility Index (VIX), a key measure of market expectations of near-term volatility and termed the ‘fear index’, spiked to 30.88, up from 12.03 on September…
Jen says Nein
Everyone knows that the German Bundesbank president Jens Weidmann has been a thorn in the side for ECB President Mario Draghi. The Italian would love to unleash the type of unconventional monetary policy that would have financial markets salivating, the purchase of Eurozone government…
US Fed Minutes: concern over stronger dollar
The minutes from the US Federal Reserve’s FOMC meeting of September 16-17th, added to volatility last week as financial markets initially bounced on a more dovish tone on the outlook for interest rates. However, after poor German data and the IMF downgrade of the…
Why are investors only waking up to risks now?
We have known for some time that the German economy was slowing. The economy contracted by -0.2% in the second quarter and since then the business and consumer confidence surveys as well as the PMI data have shown weakness. So why are investors only…
Why own gold? The bubble maker tells us why…
With the price of gold in decline, despite massive central bank money printing, it begs the question why should anyone own gold? Well according to the bubble maker himself, former US Fed Chairman Dr. Alan Greenspan, it is because “for more than two millennia,…
Size matters: Mario Draghi disappoints financial markets
It turns out size does really matter, well when it comes to central bank balance sheets anyway. While confirming that purchases of asset back securities (ABS) and covered bonds will begin mid-October, for at least two years, Mario Draghi disappointed investors by not announcing…
ECB meeting in focus
The main event this week is without doubt the monetary policy meeting at the European Central Bank (ECB). There is no room to move on interest rates because we are at the lower bound but we can expect the so-called “detailed modalities” of Draghi’s…
Market Recap: Week of September 29th
Global equity markets struggled again last week as volatility picked up while demand for government bonds saw yields move lower. Of the major indices, Germany’s DAX equity index suffered the steepest decline, down 3.15%. In the US, the tech-heavy NASDAQ fell 1.48%. In Asia,…
US Federal Reserve Meeting: Key Takeaways
FOMC Statement Wording. Janet Yellen kept markets sweet by maintaining the wording used in her previous statement, “significant under-utilization” to describe the labour market and “considerable time” for the length of the period after the asset purchase program ends before the first rate hike….
Eurozone Inflation Falls Further in August
ECB president Mario Draghi must be thinking “why always me” as the latest economic data heaped more pressure on Draghi to wave his magic wand (perceived to be quantitative easing through the eyes of financial markets) and fix the ailing Eurozone economy. In particular,…
