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Tag Archives: interest rates
How To Spot Groupthink Among Economists
How To Spot Groupthink Among Economists As GMO’s James Montier says in his latest white paper today “it seems one can hardly open a financial newspaper or read a blog these days without tripping over some academic-cum-central banker talking about the once arcane notion of the equilibrium real interest rate.” Sure enough, it is the […]
Bank of America forecasts another rate cut in Canada
Bank of America forecasts another rate cut in Canada Gloomy outlook for Canadian economy sees loonie pushed to 73 cents Bank of America, one of the U.S.’s biggest banks, says the Bank of Canada may have to cut its key lending rate again later this year. Bank of America says Canada’s economy will underperform the […]
Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes
Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes Since last week, $2.1 billion worth of artworks have changed hands at Christie’s and Sotheby’s in New York. “Les Femmes d’Alger (Version ‘O’)” by Pablo Picasso sold for $179.4 million, highest price ever paid for a painting at an auction. The bronze, “L’Homme au Doigt,” […]
The trouble with cash
The trouble with cash When interest rates are zero and it costs a bank to look after your money it becomes an unattractive asset. Banks in some jurisdictions (such as Switzerland, Denmark and Sweden) are even charging customers interest on cash and deposits. And if you go to your bank and withdraw large amounts in […]
What If Mortgage Rates Go Up?
What If Mortgage Rates Go Up? From 4% to 5% If the 30 year mortgage rate increases by just a quarter percent to 4.25%, monthly payment increases by 3%, which may only have a minor impact on the market. Half a percent to 4.5% would increase payments by 6.13% and that may start pushing marginally […]
Stephen Poloz may let inflation creep higher: Don Pittis
Stephen Poloz may let inflation creep higher: Don Pittis Bank of Canada governor may prefer an inflation bump to the damaging impact of higher interest rates Which would you prefer, higher interest rates or higher inflation? If you are someone who actually watches what the Bank of Canada does month to month, its two per […]
China Cuts Rates (Again) In Desperate Bid To Buoy Stocks, Rescue Economy
China Cuts Rates (Again) In Desperate Bid To Buoy Stocks, Rescue Economy For the third time since November, China has cut its benchmark lending rate. Hours ago, the PBoC slashed the 1-year lending rate by 25bps to 5.1% and the 1-year deposit rate to 2.25%. The move comes just three weeks after Beijing cut the […]
Rocco Galati challenges role of Bank of Canada in latest case
Rocco Galati challenges role of Bank of Canada in latest case Maverick lawyer argues central bank should provide interest-free money for infrastructure The lawyer best known for stopping the Supreme Court appointment of Judge Marc Nadon has turned his sights on the Bank of Canada. Rocco Galati has taken on a case for a group […]
How the Liquidity “Delusion” Leads to a Crash
How the Liquidity “Delusion” Leads to a Crash They were just about all there at the Las Vegas SkyBridge Alternatives Conference, or SALT: Daniel Loeb, T. Boone Pickens, and of course George Papandreou, who in March 2011 as Greek prime minister had produced one of the funniest official Eurozone lies ever when he reassured those that were […]
High End Real Estate in Canada in Frenzied Bubble Blow-Off
High End Real Estate in Canada in Frenzied Bubble Blow-Off Throwing Caution to the Wind We have discussed the dangerous housing and consumer credit bubble in Canada in these pages on several previous occasions in some detail (see “Carney’s Legacy” and “A Tale of Two Bubbles” as examples). Since we first wrote about Canadian real […]
Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts
Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts If you’ve been scratching your head since the middle of last year as consumer confidence surveys depicted an optimistic, eager to spend consumer while other hard economic data was showing a sputtering economy, we’re here to put your mind to rest. […]
“Stop Being So Negative”: Putting It All Together
“Stop Being So Negative”: Putting It All Together Putting it all together Considering: 1) governments are unable to eliminate deficits 2) global government debt is increasing exponentially 3) 0% interest rates are allowing governments to borrow more to pay off old loans and fund deficits 4) Global growth is declining despite money printing and bailouts […]
Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’
Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’ Later this week another Fed meeting will pass with the policy rate still pinned to the zero bound. The month of May will make the 77th consecutive month of ZIRP—–an outcome that would have been utterly unimaginable even a decade ago; and most especially not with the […]
China Considers Launching QE; Shanghai Stocks Soar
China Considers Launching QE; Shanghai Stocks Soar Nearly two months ago we explained “How Beijing Is Responding To A Soaring Dollar, And Why QE In China Is Now Inevitable” in which we cited Cornerstone who reminded us “that from 2007 to late 2008, U.S. fed funds dropped 500 bp, and then the Fed still needed […]
