The Economist (August 25)
“America’s bull market in equities turned 3,453 days old” on August 22. “Since hitting a low of 666 in March 2009, the S&P 500 index has increased more than fourfold, driven by strong corporate profits, low inflation, stable economic growth and a boatload of central-bank stimulus. Despite five corrections of at least 10%, the index has never entered bear territory, defined as a drop of at least 20%. Most commentators are declaring this to be the longest bull market in history.”
Tags: Bear, Bull market, Central bank, Economic growth, Equities, Inflation, Profits, S&P 500, Stimulus, U.S.
Bloomberg (August 10)
“The slide in China’s currency paused this week after jawboning by the central bank,” but the rout may not be over. “The ripples of the yuan’s 4.7 percent drop this year may be just starting to spread to the country’s neighbors” such as Vietnam, where the “dong has been moving steadily closer to the edge of its 3 percent daily trading band against the dollar over the past two weeks, as traders bet on faster depreciation.” Moreover, Vietnam is only half caught up with the drop in China’s currency, “suggesting further depreciation is possible – particularly if the yuan resumes its decline.”
Tags: Central bank, China, Currency, Depreciation, Dong, Ripples, Rout, Slide, Trading band, Vietnam, Yuan
Bloomberg (August 14)
“The last time Japan strung together this many quarters of growth was back in mid-2006…. The yen has fallen, corporate profits have soared and the economy is running above its potential growth rate. Yet inflation remains stubbornly low, despite massive monetary stimulus from the central bank. Economists are watching intently for signs that the tightest labor market in decades is beginning to bring wage gains.”
Tags: Central bank, Economists, Economy, Inflation, Japan. Growth, Labor market, Monetary stimulus, Profits, Wage gains, Yen
Bloomberg (November 16)
“One week after India’s sudden declaration that 500- and 1,000-rupee notes were no longer legal tender, the economy is in chaos.” Designed to shake out black money, “what seemed at first to be a masterstroke by Prime Minister Narendra Modi now looks like a grave miscalculation.” The move invalidated over 80% of the currency in circulation, crippling the economy. “The central bank has struggled to print replacement denominations—and the new notes are the wrong size for existing ATMs.” It could be months before things return to normal.
Bloomberg (November 2)
“The last time the Philippine peso neared 50 to the dollar, the global financial system was melting down and the central bank raised interest rates to defend it. This time, it has been driven by the president cursing his trading partners.”
Tags: Central bank, Dollar, Interest rates, Melt down, Peso, Philippines, President, Trading partners
Bloomberg (October 31)
“Of all of the scary economic data that routinely streams out of Japan, this statistic should terrify you: $800 million.” The “staggeringly small figure” is the total value of completed venture capital deals for Japan in 2015. Representing Japan’s risk-adverse culture, $800 million “explains a great deal about why the world’s third-largest economy continues to struggle, no matter how much cash the central bank pours into it. Too few Japanese are starting new companies.” In comparison, 2015 venture deals totaled “$72 billion in the U.S. and $49 billion in China. Even tiny Israel managed $2.6 billion in deals.”
Tags: Central bank, China, Deals, Economic data, Israel, Japan, Risk adverse, Statistics, U.S., Venture-capital
Bloomberg (May 16)
“Never before has the Bank of Japan done so much to achieve so little. Even after arranging a record stimulus program and reducing a key interest rate to less than zero, the central bank has failed to boost inflation to its goal of 2 percent…. A central bank using up its policy tools doesn’t bode well for a nation with the world’s largest debt burden.”
Tags: BOJ, Central bank, Debt burden, Goal, Inflation, Interest rate, Policy tools, Stimulus
Investment Week (March 30)
“The past two weeks have seen a major transition in central bank philosophy, and possibly a renewed sense of coordination.” Central bankers seem to be signaling that they will not push further with negative rates and will instead embrace other methods, some non-conventional. “So far, markets have been euphoric at this turn away from the abyss and back towards some kind of ‘normality.’”
Tags: Central bank, Coordination, Markets, Methods, Negative rates, Non-conventional, Normality, Philosophy, Signaling, Transition
Financial Times (February 10)
“The Bank of Japan should not fear cutting interest rates even further.” Japan’s central bank “should not be constrained by fear that others will follow it into negative territory.”
Tags: BOJ, Central bank, Constraints, Fear, Interest rates, Negative
Wall Street Journal (November 5)
“The drumming you hear in Washington, Frankfurt and Tokyo is the accompaniment to the Central Bank Limbo, as the world’s monetary maestros line up to see how low they can go. The Bank of England (BOE) joined the queue Thursday with its announcement that a rate increase will again be delayed.” BOE Governor Mark Carney warned a year and a half earlier “that a rate rise could come ‘sooner than markets currently expect.’” Nevertheless, “Britain’s monetary-policy committee reverted to dovishness at its meeting this week.”
Tags: BOE, Carney, Central bank, Dovish, Frankfurt, Limbo, Markets, MPC, Rate increase, Tokyo, Washington
