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Forest Fires During the past few years, the activist strain of central banking has spread around the world like wildfire, but the impact of this change on the future course of the global economy is very unclear.The number of countries involved now covers the developed world, the multitude of interventions in the financial market has expanded dramatically, and the amounts involved are exponentially [...] By John R. Taylor, Jr. Chief Investment Officer FX Concepts Lehman 2.0 Global investors either have extremely short memories or they are far too concrete, as my wife the psychologist would say. Saying that Greece is not a bank but a country means nothing. Almost all Europeans argue that a default by the Greek government would now be more straightforward and not as significant as the collapse and bankruptcy of Lehman Brothers [...] By John R. Taylor, Jr. In the financial markets, the ‘new normal’ is beginning to look just like the old normal: junk bond spreads are approaching the lows of the last decade, ‘covenant lite’ deals are back in vogue, equity valuations are sky high, and financial gearing is headed to the stratosphere. Although this bubble-like activity is a sign that those rational men and women who [...] A Strong US Economy When it comes to the US economic outlook, we seem to be among the most pessimistic out there as By John R. Taylor, Jr. Studying Italian history forty years ago I learned that the major reason behind the peninsula’s decline by Joe Weisenthal John Taylor, chairman and chief investment officer of FX Concepts tells Chrystia Freeland that he believes the U.S. will enter another recession by the middle of 2011. Currency guru John Taylor is being interviewed at the Reuters 2011 Investment Outlook Summit. Some key points: Another recession is coming to the US. Gridlock or Trench Warfare? It seems almost impossible to compose a rational outlook for the world markets in this New Year without analyzing the political situation in Washington, but so many others seem to have sidestepped this elephant – appropriately the symbol of the Republican Party – that is taking up so much of the room. [...] By John R. Taylor, Jr. It must be the end of the year, as our desks have been buried by an unusually expanding and expansive pile of economic and market forecasts for the next year. At least in the US, the news is seen as so good that the institutional analysts have outdone themselves, going beyond their usual enthusiasm in response to the recent monetary expansion and fiscal laxity. [...] By John R. Taylor, Jr. The market outlooks we are receiving for this next year are as diverse as we have ever seen. Our most By John R. Taylor, Jr. The last few months have seen a further obfuscation of the true state of reality and the impact of John Taylor appeared earlier on the 2011 Reuters Investment Outlook Summit, and among various interesting things (namely another call for EUR-USD parity, and that he would “love to be owning gold right here”). The Recovery in the European Currencies Should End Tuesday The market took the European currencies strongly higher on Friday and used the weak US employment data as an excuse. The cycles [...] By John R. Taylor, Jr. As supporters of the hypothesis that historical events display cyclicality that if studied and understood can improve decisions about the future, we are always trying to place current events in a historical context. Our goal is always to develop a strategy that can anticipate the twists that current historical actors will take. The recent crumbling of the Eurozone has been a perfect example. As [...] by John R. Taylor, Jr. Not since the Wirtschaftswunder has Germany looked so good compared to the rest of Europe, and we By John R. Taylor, Jr. One of the most popular American sayings between the 1940’s and the 1970’s was “there is no such By John R. Taylor, Jr. Now that Ben Bernanke has re-introduced quantitative easing (QE2) to a mostly incredulous world and, across the ocean, the Eurozone has begun unraveling again, our thoughts should turn to the parlous state of the world and the risks ahead. These are amazing times and seem to grow more so every day. Policy errors are popping up everywhere [...] By John R. Taylor, Jr. The recent IMF meetings had and the coming G-20 meeting will see lots of venting and some skirmishes but no real attacks. Countries are complaining loudly because Bernanke’s excess dollars are being sold and their own currencies are being purchased, rising as the dollar declines. As most are trying to slow that rise by buying the dollars as reserves, [...] |
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