Category Archives: Views

Central banks enabled populism; they will soon pay the price

It is becoming increasingly difficult for central banks to surprise the markets with good news. No matter how dovish they are, investors expect them to be even more dovish still. This financial repression has facilitated the rise of populist politicians, who threaten to bring the end of central banks’ independence.

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Brexit will make the Leave voters’ problems worse

As the day of Brexit approaches (or not), emotions are running high. Particularly on the side of those wanting to remain in the European Union, there has been unprecedented unity and clarity in pushing for a deeper understanding of what the EU actually is.

However, this may come too late. A fundamental lack of knowledge and understanding of the EU is the root of the problems facing the UK today – not just the British government’s negotiation efforts, but also the public at large. Let’s look first at the main thing that sets the British apart from the people on the continental EU.

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Central banks cannot paper over the cracks of populism

Central banks are trying to prolong the decade-old bull market, but it looks like instead of reassuring investors, this makes them nervous.

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Brexit is not the only attack on EU freedoms

Brexit may be the most prominent attack on the European Union’s four freedoms, but it is by no means the only one. Subtler attacks are multiplying. If they are allowed to continue unchallenged, the EU will eventually crumble.

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If you are stockpiling ahead of Brexit, you need to stop

I know the chances of anyone paying attention to this article are slim, but it’s worth putting it out there nevertheless. If you are stockpiling to prepare for Brexit, as it increasingly is the fashion, you need to stop. You are doing yourself and the others around you more harm than good.

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‘Buy’ signal triggered by extreme bearishness

It finally happened: investors are so bearish that a contrarian “buy” signal has been triggered. The Bull and Bear indicator developed by researchers at Bank of America Merrill Lynch is finally indicating Buy, one year after climbing so high that it triggered a Sell signal.

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Increasingly authoritarian Romania takes over EU presidency

If Brexit does happen on March 29 this year, it will happen under the strangest possible presidency of the European Union: the Romanian presidency. While the role of president of the EU is all about openness, transparency and a love of democracy, the Romanian government seems to increase its preference for the opposites of these features.

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The end of the debt bias is nigh

Corporate bondholders, beware. The wave of enthusiasm for this asset class, which has helped it to reach new heights, is now ebbing. A research paper recently published by the IMF illustrates the reasons behind this – although it must be said the paper does not represent the official position of the IMF.

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Brexit will enrich the EU’s financial industry

If Brexit does go ahead (and probably even if it does not), the European Union is ready to chip away at Britain’s dominance in the financial sector. At least, that’s what a recent speech by François Villeroy de Galhau, the governor of the Bank of France, suggests.

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As ‘exodus from Europe’ intensifies, watch the UK savings ratio

The list of reasons to worry in the market is growing longer by the day, and investors keep taking money out of risky assets – among them, European ones.

The phenomenon has been dubbed an “exodus from Europe” by analysts at Bank of America Merrill Lynch, who say there is “no surprise that the outflow from European high grade and high yield funds has been much more sizable than outflows from emerging markets debt funds.”

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