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Entries from December 2014

Japanese Shares Still Worth Considering?

December 31st, 2014 · Comments Off on Japanese Shares Still Worth Considering?

The Bank of Japan provided another shot of monetary stimulus, surprising markets all around. We think that under the conditions, they didn’t have much choice, there isn’t any clear alternative. We could learn from history, in the 1930s both the US and Japan beat the depression, only to shoot themselves in the foot. The April […]

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Tags: Japan

Fooled By The Fed, Again?!

December 31st, 2014 · Comments Off on Fooled By The Fed, Again?!

After a steep fall, financial markets have once again bolted higher. According to some, this rebound was caused by some comments from Fed officials. But isn’t it curious that a mere whisper from some Fed official can turn around financial markets to the tune of trillions of dollars. Especially for those that tout the robust […]

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Tags: Monetary policy

After The Veil Of QE Is Lifted…

December 13th, 2014 · Comments Off on After The Veil Of QE Is Lifted…

There are many critics of QE, and indeed it does have limited real effects and produces some risks. However, now that the veil of QE is being lifted, what is revealed is a rather ugly world in which a host of deflationary forces conspire to take definite root. The US has, for now, managed to […]

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Tags: Monetary policy

Deflation, Rather Than Inflation Was Always The Bigger Risk

December 13th, 2014 · Comments Off on Deflation, Rather Than Inflation Was Always The Bigger Risk

In 2010, a host of people wrote an open letter to the Fed warning against the inflationary risks of unconventional monetary policy. Recently it turned out that none of these signatories repented. We’ll argue that they got their risk assessment inside-out and explain why deflation was always the much bigger risk. To The Fed’s Critics: […]

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Tags: Monetary policy

Europe Is Coming Apart

December 11th, 2014 · Comments Off on Europe Is Coming Apart

While it seemed like the ECB had saved the eurozone from imploding a few years ago with Draghi’s “whatever it takes,” underneath, tensions have remained. While there are some small pockets of improvements (Ireland), mostly, the situation has kept deteriorating- in Italy and France, but also in Germany itself. This isn’t a surprise. Just like […]

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Tags: Eurocrisis

Falling Oil Price And Energy Stocks

December 11th, 2014 · Comments Off on Falling Oil Price And Energy Stocks

Falling oil prices have decimated energy stocks. For some, like those producing shale oil, this seems warranted as lower oil price is a direct threat to the viability of many. But the selloff in alternative energy names, equally violent, provides an opportunity. Falling Oil Price And Energy Stocks | Seeking Alpha

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Tags: Oil

Secular Stagnation In… Germany?

December 7th, 2014 · Comments Off on Secular Stagnation In… Germany?

Germany has been held up by many as an economic success story and a recipe for others to follow. But the success is faltering of late, producing a raft of bad economic figures. A closer look at what’s going on reveals that even doing all the right things doesn’t guarantee escape from the forces of […]

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Tags: Germany · Secular Stagnation

Cenveo Share Price Slide Isn’t Warranted

December 7th, 2014 · Comments Off on Cenveo Share Price Slide Isn’t Warranted

Shares in Cenveo slid lower from $3.80 in July to $2.40 now, almost in a straight decline, taking the shares into deeply oversold levels. We couldn’t find many reasons for that, Q2 figures were somewhat disappointing, but these were marred by a host of one-offs. Management is convinced they’re still on track to make full […]

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Tags: CVO

Germany’s Eurozone Recipe

December 4th, 2014 · Comments Off on Germany’s Eurozone Recipe

Germany has been the lone economic success story in the eurozone, but should other eurozone countries follow the German model? It’s invariably argued that the German success is based on fiscal discipline and structural reforms. As usual, the real picture is a good deal more complex. Germany’s Eurozone Recipe | Seeking Alpha

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Tags: Eurocrisis

To Raise Or Not To Raise…

December 4th, 2014 · Comments Off on To Raise Or Not To Raise…

A primer on the arguments pro and contra tightening monetary policy. Those who are in favor fear asset bubbles, rising wages and want to protect income from savers. Those who are against argue that rising rates risks the recovery, inflation is low, rates would be low in the absence of Fed expansionary policies and there […]

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Tags: Monetary policy