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Entries from March 2015

If Only The Countries In The Eurozone Periphery Were Like Germany

March 22nd, 2015 · Comments Off on If Only The Countries In The Eurozone Periphery Were Like Germany

Often, the crisis in the eurozone is analyzed from a moral point of view in which virtuous German policies are juxtaposed against spendthrift peripheral countries. If only all eurozone countries would be like Germany and things would be ok, seems to be the upshot of that position. In reality, not all countries can be like […]

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Tags: Eurocrisis

The Day The Central Bank Powers Came To An End

March 22nd, 2015 · Comments Off on The Day The Central Bank Powers Came To An End

Central banks in the developed world have just about thrown everything and the kitchen sink at the forces of deflation, with fairly little to show for it. After the US and the UK, the Swiss have now been the third to throw in the towel. Is this a general retreat? Are we going to succumb […]

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Tags: Monetary policy

A Curious Swiss Victory

March 20th, 2015 · Comments Off on A Curious Swiss Victory

The Swiss central bank took everybody by surprise, but unlike Peter Schiff, we don’t see much ‘victory’ in their decision to stop pegging the franc against the euro. It’s not the ‘regime change’ that is needed as it’s only likely to reinforce deflationary forces in Switzerland itself. Other things being equal, it leads to further […]

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Tags: currencies

Japan, A Failed Keynesian State?

March 20th, 2015 · Comments Off on Japan, A Failed Keynesian State?

It’s popular in certain circles to depict Japan as a sort of Keynesian failed state, plagued by by near insurmountable economic problems such as an insurmountable debt burden. But Japan’s problems can be traced back to the burst of epic asset bubbles, which hobbled the country for decades. While far from perfect, the policy reaction […]

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Tags: Japan

The Coming Euro Crash

March 18th, 2015 · Comments Off on The Coming Euro Crash

It looks to be another difficult year for the eurozone, even if the lower euro and oil prices provide some much needed relief. Even if we manage to get past the Greek election, we should open our eyes to the inherent failures of the eurozone, which is likely to regularly produce a crisis. For instance, […]

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Tags: Eurocrisis

Can Utilities Sink The Solar Market?

March 18th, 2015 · Comments Off on Can Utilities Sink The Solar Market?

The solar market, like oil, is finely balanced and relatively small disturbances can lead to significant price swings. With the backdrop of lower LNG prices in Asia and utilities, especially in Japan, fighting solar energy, the risks have increased for solar stocks. Longer term, the advancement of solar looks certain and solar stocks have already […]

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Tags: Solar sector

Will Greece Sink The Eurozone?

March 14th, 2015 · Comments Off on Will Greece Sink The Eurozone?

What are the risks for Greece to create another eurocrisis? Actually, these are pretty substantial. There are two kind of risks. The first is that under the specific institutional make-up of a currency union, markets are prone to self-reinforcing feedback loops, which we’ll describe in detail here. The second big risk is that the eurozone […]

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Tags: Eurocrisis

Is Putin Winning The Oil War?

March 14th, 2015 · Comments Off on Is Putin Winning The Oil War?

Admiration for Putin’s decisiveness has largely subsided in the West, but not totally. There are still people arguing Russia will come out the other end reinforced. While low oil prices will also produce problems in the US shale sector, it’s strange to close one’s eyes to the problems these cause in Russia’s energy sector. The […]

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Tags: Oil · Russia

There Must Be A Bubble Somewhere

March 14th, 2015 · Comments Off on There Must Be A Bubble Somewhere

When asset bubbles emerge, many point to central banks as the culprit. Today, people point to the shale credit as a bubble, “caused” by the Fed. While interest rates are a factor, they’re not usually the most important. Decisions about credit remain the domain of private parties, based on private assumptions and calculations. And central […]

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Tags: The Markets

The Portable InterOil

March 4th, 2015 · Comments Off on The Portable InterOil

InterOil, like most oil and gas companies, suffered from the fall in oil price. But unless energy prices stay low for a decade or so, which we think is unlikely, there is little reason for that. The next year will be decisive for InterOil’s LNG plans, most notably because of the recertification of its Elk/Antelope […]

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Tags: IOC