Paul Krugman believes that we are in a liquidity trap (interest rates can’t go any lower), and that the only way to break out of it is via increased government spending. Here’s a column expressing his views (apologies for the long excerpt but I want to make sure I don’t quote him out of context): [...]
This is a new feature: a very quick summary of my investment positions, to be published monthly. This is not investment advice and should not be construed as such. I am currently 93% invested, as follows: 59% Agricultural commodities11% Other commodities17% Emerging market equities 6% Miscellaneous equities My largest position is in soybeans, followed by [...]
Buttonwood notes that commodities have been on a tear lately: Higher wheat and metals price have been hitting the headlines, so it is no surprise that the all-items index is up 8.4% on the last month. It is more surprising that it has risen 28.1% over the last year. Furthermore, this is not a boom [...]
I find it revealing that when China hiked interest rates last week, the USD promptly rallied. Of course the rally was short-lived, but it confirms a suspicion I have long held: it's not the renminbi that is pegged to the dollar, it's the dollar that's pegged to the renminbi. (Aside: treating the US and China [...]
Hello to all my faithful readers, and my apologies for the long hiatus. Apart from the usual excuses (being busy, being lazy, being otherwise inclined), the main reason I've written just 3 blog posts in all of 2010 is that quite frankly, global markets have been pretty boring, year-to-date. But that seems like it's changing; [...]
Michael Lewis, whose writing I generally enjoy, has a new book out. It’s not about the financial crisis per se, but about a handful of traders who made huge amounts of money from the crisis. There’s an excerpt available on the Vanity Fair website, in which Lewis talks fairly admiringly about one such trader, Michael [...]
Was moral hazard, in the form of expectations of a bailout, responsible for the reckless behavior that led to the banking crisis? James Surowiecki argues, quite convincingly I think, that the moral hazard argument is overrated: In order to believe that the banks engaged in reckless behavior because they assumed that if they got into [...]