By James Alexander via Historinhas | Although it appeared that the VSPs gathered in Jackson Hole could only worry about non-existent inflation, I detected a defensiveness too.
MADRID | June 14, 2015 | By JP Marín Arrese | We take for granted that close to zero rates remain the driving force for delivering growth. The massive liquidity pumped in by Central Banks in developed countries has led to this widespread belief on the merits of cheap money. But such manna brings with it a number of drawbacks.
BANGKOK | May 3, 2015 | By Benjamin Cole via Marcus Nunes‘ Historinhas | I have complained before in this space about the macroeconomic defeatism seen among both left- and right-wing economists. We are told that due to demographics and lower productivity, future economic growth must be muted. Not so.
MADRID | April 20, 2015 | By JP Marín Arrese | Governments in developed countries openly bet on monetary stimulus for getting their economies back on track. The US massive liquidity injection stood as the hallmark for similar moves by Japan and Europe. Yet, the IMF voices concern that running global governance on money tools leads to a liquidity glut while demand and output remain largely subdued.
MADRID | By Sean Duffy | The OECD´s economic outlook showed that voices calling for action in Europe are growing louder. With the outcomes of austerity and budgetary consolidation continuing to drag down the economy, Catherine L Mann´s arrival as its chief economist represents a significant coup for advocates of the opposite recipe.
MADRID | The Corner | Chairman at Bundesbank and member of the ECB’s Government Council Jens Weidmann warned -again- that more ECB measures to solve low inflation are difficult and could face legal limits. As markets await for Mr Draghi’s appearance on Thursday, ECB’s Benoit Coeure insisted in a Bloomberg TV interview they won’t “rush to a new decision without knowing.”
By Sreekala Kochugovindan, Anando Maitra (Barclays) | History highlights the importance of the business cycle in determining the effect of rising rates on asset returns, a topic we discussed in depth in Scenarios for a shifting bond landscape. We examined US data since 1925 and selected episodes where US Treasuries sold off by more than 5% in one year. The results were pretty mixed, with equity returns ranging between plus and minus 50% and providing no consistent pattern.