Central banks are getting closer and closer to issuing digital currencies, but this attempt to fend off the threat of cryptocurrencies raises many questions about the future of the economy.
One consequence of central bank digital currencies, which for the moment is not discussed as much as it should be, is that they could serve as “Trojan horses” for negative interest rates – and these in turn could amount to debt default by stealth.
Continue readingThere is a widespread view that the Federal Reserve will have to raise interest rates at a steady pace this year, because it cannot afford to fall behind the curve.
I would argue that it has already fallen behind the curve and has no choice but to remain there. And it is not the only one in this situation. All major central banks are playing the same game; they have no choice.
The euro is at its cheapest since April 2003 following the European Central Bank’s various monetary easing measures, according to a survey of fund managers by Bank of America Merrill Lynch.
The contrarian “buy” signals in the markets keep increasing, but this doesn’t mean investors will rush and buy like in the good times.
Global stock markets serve as a brutal reminder that nothing can ever be taken for granted when investing.
After the carnage in the stock markets — it was the worst start of the year ever for U.S. stock markets — a look at capital flows can give some clues on where the markets might be headed next.
Bearishness increased for the short term (a one to two weeks horizon) while intermediate-term bullishness on US stock markets has tempered, flows data around the first interest rate raise by the Federal Reserve in nearly a decade show.
Investors are extremely bearish for the short term, just before a crucial decision by the Federal Reserve on whether it would raise interest rates or not later this week.
Exchange traded fund (ETF) traders have been positioning “aggressively” for a Santa Claus rally, but contrarian investors would say this is a negative thing for the short-term market outlook, according to analysts at TrimTabs Investment Research.
Easy credit has led to all sorts of distortions in the markets, and an obvious one has been the surge in share buybacks, which have kept stock prices elevated and have boosted earnings per share.