Relevant and even prescient commentary on news, politics and the economy.

Interesting interpretation of Trichet’s comments regarding ECB policy

Eurointelligence cites a Die Zeit interview (the original interview here) with ECB central bank President Jean-Claude Trichet. Their take on it is quite interesting, which suggests that most are ‘wrong’ about the path of ECB policy. According to Eurointelligence: Central bankers are trained not to say anything of any relevance in long speeches or interviews, […]

Europe’s at it again…

Key European CDS are starting to turn in the more northern direction again, as the German-French ‘pact for competitiveness’ faces near-unanimous pushback across Europe. Credit default swaps (CDS) are a market security used by investors to buy 5-yr protection (in this case) against default (or the like). As the spread rises the implied probability of […]

The ECB would quash a discrete shift in German nominal GDP rather than accommodate it

David Beckworth points to Scott Sumner, who points to Kantoos on the effectiveness of nominal income targeting in Germany. Kantoos’ illustration certainly suggests that the ECB has been successful in getting the dynamics of output and prices (nominal GDP) right over the last decade. I have no contention with the historical evidence. Whether or not […]

Thoma: The Slow Recovery of Unemployment

Mark Thoma is a truly stand-up guy. We need more like him screaming for the unemployed and underemployed. I’ll comment just a bit more after Mark’s commentary. Mark Thoma on The Slow Recovery of Unemployment: I don’t like to make economic forecasts. Though I do it on occasion, I generally leave that to Tim Duy […]

The household survey paints a clearer picture of the January employment report than does the nonfarm payroll

I’ll forward you to Spencer’s post on the January Employment report. As always, he sifts through this massive report and eloquently describes the state of the labor market. But I thought that I’d add a bit on the disparity between the household survey and the establishment survey. The annual population revisions and weather distortions have […]

Egyptian CDS in line with Portuguese CDS

It occurred to me that some Angry Bear readers may be interested in a short analysis of the Egyptian bond market. Professionally, I’m a macroeconomic analyst and portfolio manager on a global fixed income team. Since we do trade emerging market debt, of which Egyptian debt is categorized, I’ll be happy to comment. The gist […]

The other measure of income, GDI, shows faster growth and an oversized profit contribution

There are two measures of income: the spending side (Gross Domestic Product, or GDP) and the income side (Gross Domestic Income, GDI). I’d like to see what GDI is telling us about the Y/Y recovery, since it’s a better predictor of turning points, according to FRB economist Jeremy J. Nalewaik. The chart illustrates the contribution […]

According to the Setser Test, it’s unlikely that China reduced its Treasury holdings in November

According to the Treasury International Capital System (TIC) release, foreigners were net buyers of US securities in November, +$39 billion over the month. Of the $61.7 billion in long-term Treasuries net purchased (notes and bonds), private investors claimed $50.6, while official investors (central banks, sovereign wealth funds, etc.) accrued a smaller $11.1 billion. Over the […]

European policy…really?

This week Trichet laid down the ECB’s hand, (effectively) announcing his intention to maintain inflation at the ECB’s target rather than allow it to overshoot. For all intents and purposes, 2% inflation stabilizes the real exchange rate rather than furthering real depreciation in the Periphery and real appreciation in Germany (or the Core). Ambrose Evans-Pritchard […]

Which country prints more and runs bigger government deficits: Canada or the US?

Even though Europe is on the forefront of global bond news these days, I’d like to revisit the US Treasury market. Specifically, I’ll look at the Canadian-US bond spreads, which tell an interesting tale of Fed purchases and US deficit fears. First, the Canadian over US government bond spreads for two longer term issues, 10yr […]