Insights & news

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Looking for more stimulus in China

Chinese equity markets took another beating this week with the Shanghai composite down 12% on the week. This took the index back its early July low, erasing the full impact of the earlier policy measures aimed at supporting the market. This leaves the index down 32% from its mid-June high, though still 57% higher than one year ago. To be clear, the Chinese equity…

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The mystery of the printing press

On Voxeu, there lately has been a string of interesting exchanges on macro policy issues and trends. A first series last month tackled the lessons on the financial crisis and how to deal with it, amongst which some interesting angles on sovereign debt crisis and austerity. Early this week however, an interesting paper appeared from professors Corsetti (Cambridge)…

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Operation Mars Bar

All eyes are again focused on central banks and whether or not to push the throttle further. In Europe, one possible scenario which was circulating – and hinted by Mario Draghi during the last rate setting session – involved a potential “negative rate”. The current ECB corridor is 0% (bank deposit rate excess reserves) – 50%…

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Heat maps, Ro-Ro transformation or the great disconnect ?

Heat maps and correlation trades, that was the main theme over the past 6 to 7 years. In the charts above, it marks the dominant presence of red and dark blue spots, indicating various pairs of assets are either heavily negative or positive correlated to each other when it comes to price movements. It became known as Ro-Ro or Risk-on-Risk-off mode of financial…

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FX space billiards

“When you put all the pieces together, my guess is that the next in line will be Australia”, Econoshock 16/04/13 Beggar thy neighbor in full swing. Well, it took about a month to materialize what common sense was prescribing : The BOJ exporting its problems all around the globe and its main trade partners not being amused. Last week, the Australian…

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“Further veering up from what makes sense”

Last October, we already covered some nasty evolutions on the prices of US farmland http://www.econoshock.be/the-heartland-as-good-as-it-gets-folks It seems that today, also the FED is recognizing that extreme easy monetary policy can have its side effects and in some cases can do more harm than good. The February FOMC minutes which have been released…

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Travel Log – Balticum

Late November I missed my appointment in the Baltics but I stated back then that one day I would visit this Nordic hub. And thanks to VOKA Antwerp Chamber I achieved so last week. What did we learn ? First stop Tallinn and a kind of shock occurred in many ways. Not only a very resilient country in the post 2008 era, but also a very specific attitude of people towards people…

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Death by Excel and the power of Mach 10 media

How sad, how sad to celebrate the liberty of media globalization in such a way. I am referring to the recent Rogoff-Reinhart incident or already better known as the R-R-gate. Some people discovered a mistake – an excel programmed calculation error – which puts the R-R thesis of “post crisis slow growth in a debt 90% of GDP environment “on…

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Beggar thy neighbour in full swing…

…and we have our first victim under the category “to export your problems or not, that’s the question” : South Korea. When “Abenomics” was announced for the first time late November, markets already anticipated on a huge Japanese support program in budgetary terms and in monetary terms to create inflation and weaken…

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