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…
Investors seem anxious, as they explore the implications stemming from the possibility of Portugal becoming another Greece. The general election culminated with the largest number of parliament seats being won by the centre-right coalition already in power, but still short of securing a majority. An emerging alternative coalition is on the cards, which may bring…
Many are those scratching their heads at the ECB, trying to understand why is there no inflation and how the central bank can act to boost the economy towards healthy growth. But while they spend too much time digging in their neighbours’ backyard (aka the global economy) they’re the only ones to blame, as the…
“So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls.” – Martin Feldstein The time when physical money will be made illegal is not that far away, as central banks have now exhausted…
Over the long term it is possible for an investor to build a portfolio with a very low risk profile while still being able to enjoy the upside potential that derives from the effects of compounding. For that goal, the Modern Portfolio Theory is of good help, stating that all an investor must do…
