In late December, RGE Managing Director Arnab Das sat down with Thompson Reuters to discuss the year ahead for India. Following strong inflows in 2012, Das noted that “the global environment has become much more supportive of risk-taking and fund flows to EMs, and India has benefited from that as a very high-beta play,” but […]
Despite the many negative headlines, 2012 was a good year for markets. Listed below is a rough snapshot of total returns in USD – most asset classes returned double-digits. 2012 was a year to look through pessimism – how did your PA do? I would estimate that Global Financial Wealth rose by $17,500,000,000,000 to $162 trillion (I ignore […]
Beyond the straightforward mechanics of QE3 (i.e., the Treasury and MBS purchases), the Fed’s impact on expectations is key. The guidance indicated that support would remain in place until the economy is well in their clear. By aggressively pushing on bond yields, and more importantly, promising to maintain that effort, Bernanke and Co. definitely had […]
The Economonitor’s QE3 week is perfect timing as we’ve been thinking a lot about the effects of the latest bouts of global monetary stimulus on the Middle East and North Africa – as summarized in part of our omnibus MENA quarterly presentation. We argue there that even though EMs and to a lesser extent frontier […]
Portugal was the second country (after Greece) to ratify the fiscal compact treaty (together with the ESM). The fiscal compact will be implemented under the auspices of the European Court of Justice which will monitor the national rule’s compliance with the treaty. Some key elements of the fiscal treaty are effectively already in force since […]
The Fed’s Thursday easing announcement paves the way for the BoJ to announce its own asset purchase program expansion at next week’s policy meeting, in line with our previous view. There are certainly risks to this call: Just today the government released machine orders data showing a far more resilient July than expected, and earlier […]
What does the ECB bond purchase program announced by Mario Draghi last Thursday have to do with French billionaire Bernard Arnault’s application for Belgian citizenship on Saturday? Both reflect a Gordian knot at the heart of the European Union that makes relatively straightforward solutions to the crisis elusive. This Gordian knot is, in turn, the […]
The developments in markets have been encouraging lately: volatility is down, and so are correlations. In fact, the first is largely a direct cause of the second, as RGE explained here and here several months ago when the opposite phenomenon was occurring (in line with an argument put forth by Harry Markowitz that ‘beta’ swamps ‘alpha’ when the former is large).
In the news this week, China has pledged to continue to buy eurozone debt, particularly that of indebted periphery economies have been in the news this week, providing solace to some market actors. The remarks, which include Chinese government interest in the debt of the EFSF, as well as those of individual countries, especially Portugal, were largely made on the sidelines of the latest iteration of the EU-China high level trade meeting. These statements clearly make more exciting news than the usual fare at such meetings – EU officials also raised concerns about market access and the uncertain application of Chinese policies at a local level.
The sudden death of former president Néstor Kirchner, widely considered Argentina’s most powerful politician, has called into question the sustainability of the current administration’s mandate. In the short term, Kirchner’s death will fuel political uncertainty, especially regarding who will represent the Peronist Party in next October’s presidential elections. In the medium term, however, the death of the man widely thought to be the power behind the current president—his wife Cristina Fernández de Kirchner—opens the door for greater political stability.