Search results

Eurostoxx50 and DAX futures were trading +0.5% premarket. Underlying opens in 20 minutes, will see if it holds up.

It seems he's alluding to a prolonged 70s style period of stagflation rather than a 30s full-fledged global depression. From another article by the same author http://www.ft.com/cms/s/0/260eef4a-2a6f-11dd-b40b-000077b07658.html

Careful. Trichet said the same thing in 2005 just to raise rates later.

Interesting read. Thanks for posting.

We will see if they will stand pat. It seems Weber took over at the helm and the ECB has become an extension of the Bundesbank. It now seems the European unions are giving the hawks more than enough firepower...

The ECB should be concerned their currency is going to be worthless after it appreciated against most currencies over the last 5 years (and as a result sentiment among mid-sized exporting companies all over the continent is imploding)? What on earth are you smoking?

Inflation is a lagging indicator. It takes a couple quarters of subpar GDP performance for it to be felt in lower (core)inflation.

And a decade of GDP growth lagging the US by 1-2% annually.

Of course this tiny increase by itself has next to zero real world effect. What though if - And I can't help the notion when reading interviews with Weber - this tiny increase ends up being a longer series of hikes 'just to make sure'? Just like the Bundesbank did in 1990/91? If the ECB was...

Found this SP500 chart regarding the impact of both CPI and reinvesting dividends. Compounding of total returns, even after CPI, still makes a big difference: (Orange = total return, blue = price return)

Completely agree with the outperformance aspect Europe vs. SP500 in USD terms for 2003-2007. But what about 2008-2012? Not so sure. What does financial science say about longer term relative global equity and currency returns? Aren't they historically mean reverting? :)

1. I think the entire 70s the SP500 (including dividends?) lost value in inflation adjusted terms. Thus 2000-2008 so far is similar to the 70s. There is nothing historic about the Dow not being able to reach new inflation adjusted highs this decade (see...

Employment is a lagging indicator. Forward looking indicators suggest weakness is right ahead in the Eurozone.

That's true. Also let's not forget that every worker that loses their job in Europe is one member less for the unions :)

I agree in principle. Rates below the rate of inflation should only be justified by a weak/stagnating economic outlook and only for very short periods of time (unlike 2002/2003). However, all economic indicators now already do suggest severe weakness in the Eurozone, not only in Spain and...

Bradford & Bingley Sinks After TPG Pulls Funding Plan http://www.bloomberg.com/apps/news?pid=20601087&sid=aTkGiws9gm3k&refer=home

It looks like you are the one that ought to take macroeconomics 101, not me. You understand there is a core inflation rate and a headline inflation rate? Headline inflation jumped to 4.0% annualized last month while core inflation in the Eurozone has actually fallen from 1.9% to 1.7% over the...

Please explain to me how the ECB single-handedly will influence EU headline inflation (including global energy and grain commodity costs) with their rate hike? Thank you.

Yes thank you ECB for the (in)sanity of trying to combat crude oil price increases by inducing a European recession. The YoY % Change in headline inflation is by definition strongly correlated to the change in energy prices. Who knows, maybe the ECB doesn't have any other choice than...