While some are anxiously waiting for an expansion of the current European QE programme, others are praying for that not to happen. At this point, an expansion of QE and a further interest rate cut may act as dynamite for European banks and do little for investors. Banks stand to lose profitability if the European…
THE TRADITIONAL MACRO ECONOMIC MODELS OF THE WEST ARE SPLUTTERING. CAN ALL THE KING’S HORSES AND ALL THE KING’S MEN PUT THEM BACK TOGETHER AGAIN? Markets are such things as dreams are made of, to misquote the Bard. Much of the time, they seem full of apparent meaning (appearances, of course, often being deceptive) whilst…
My birthday lunch in Brussels last month was a jolly affair, with 21 people attending, including the editor of Master Investor. After the lunch, and after its effects had worn off, I turned to contemplation. No, I haven’t suddenly gone all “mindful”, but February 17th has always seemed a good day for internal reflection. And…
As seen in the February edition of Master Investor Magazine. Past mistakes guide future pain The rampant decline in commodity prices that started two years ago seems to have finally put an end to the epic boom most commodities experienced during the early part of this century. Almost no commodity has escaped the furious price…
The European Union is considering the possibility of banning €500 banknotes in a move to fight corruption, fraud, and even terrorism. The high value of these banknotes makes them “too useful a vehicle of corruption and other illegal activity”, anti-fraud authorities claim. We should force people to execute transactions using electronic money and through plastic…
The correlation between oil prices and equity prices has always been shrouded in mysticism, with no one being able to come up with a clear cut explanation for the relationship between the two. Many studies point to a strong relationship between the returns on oil and equities; many others point to the absence of any…
The return of Banking fears! The news that the mighty Deutsche Bank is under suspicion takes us back to the psychology of seven years ago when most us, including central bank chairmen, realised that we had banking crisis and disaster on our hands. This article attempts to differentiate between the circumstances then and the circumstances…
Risk and volatility are increasing rapidly, as investors reassess whether more easing is really a good thing or just the confirmation of a global central banking failure. US markets are way overvalued due to the trillions the FED injected into the market over so many years. At a time industrial production and employment data are…
As seen in the February issue of Master Investor Magazine. If, like me, you’ve spent your entire adult life fearing inflation as the universal bogie, welcome to the pantomime world of Post-Modern economics. Because there’s another bogie even worse: it’s called deflation. For those of you who are not familiar with the great British tradition…
I spend a lot of time attending finance seminars on all manner of subjects. This week I was at a very interesting seminar about quality standards in industry as defined by the BSI (British Standards Institute), the people with the Kitemark – a logo that has the same brand awareness as Pepsi (something they are…
