We are now approaching the Christmas season during which people prepare to take a small holiday and to make a few promises regarding the New Year. After all, January represents a new start; it’s an opportunity to correct all our past mistakes and the best time to cut out misbehaviour and improve our lives. The…
After more than a decade of easy money, the emerging world is nearing a downturn (if not a collapse), as the Federal Reserve is threatening to cut off the fuel that for years has fed skyrocketing corporate debt levels. Investors are anxiously awaiting the outcome of the next FOMC meeting, scheduled for December 16, to…
The epic experiment with negative rates continues to unfold, as central banks are unable to boost consumer inflation with the current level of asset purchases. The Swiss National Bank (SNB) is already all negative in terms of its key interest rates, but is preparing further action. Strong side effects may occur. It was almost one…
The debate about risk lies too much around CAPM, standard deviation, beta and a few other concepts that are rarely capable of reproducing the true odds of achieving a certain investment goal. Unlike the concept of odds in football betting, which reflects the probability of a certain outcome occurring (even if a little distorted by…
The terrorist attacks that occurred last weekend in Paris will certainly be part of our memories for a long time; but the implications for our society and for the future of the European Union are manifold. While the attacks carry many regrettable implications and challenges, they also help shed some light on the unsolved puzzle…
The equivalent to cheap money is expensive “everything else”. When money is made abundant while the stock of assets is held constant, inflation must pick up. But the higher prices do not always come in the form central banks wish for… There are so many things money can buy. A watch, a pack of beer,…
Some thought commodity prices were going to rise forever due to the mismatch between supposedly unlimited demand growth from industrialising nations and limited supply of much-needed and irreplaceable raw materials. Others even believed that a new world order was rising, where a homogeneous group of wannabe industrialised countries would support the growth of the rest…
…and so may activist investor Bill Ackman. Short-seller turned activist investor Bill Ackman has just recorded a $2 billion write-down on his portfolio due to a failed bet on the Canadian drugmaker Valeant Pharmaceuticals. But he promises to fight back, as he still believes he can build value in the company. In the 13F form…
Yesterday the FT uncovered a series of meetings between ECB policymakers and the private sector that occurred just before the governing council meetings from which important, market-moving, interest rate decisions resulted. Central banks were made independent from the government to avoid an evident conflict of interests that allowed us to achieve more stable, lower inflation…
Starting with good intentions The idea of creating an independent central bank to assure that money flows efficiently through the banking system and in the direction of the real economy is good in principle. A central bank can provide high street banks with the necessary reserves for them to back up their lending activities, and…
