Wall Street Journal (February 27)
“Economics 101 teaches that international trade is all about comparative advantage.” Specialization and trade result “in everyone getting more of everything.” This theory “no longer guides global trade. Instead, what’s happening looks more like portfolio theory. Countries are no longer maneuvering to maximize gains. They’re diversifying to minimize losses. The risk they’re hedging against? The U.S.”
Tags: Comparative advantage, Diversifying, Economics, Hedging, International trade, Maximize gains, Minimize losses, Portfolio theory, Risk, Specialization, U.S.
Bloomberg (December 8)
“Foreign investors are storming into Japan’s once-placid government bond market, exposing the world’s second-largest pool of sovereign debt to bouts of volatility sparked by traders thousands of miles away.” Overseas investors are “on course to scoop up more Japanese government bonds this year than in any period since records began in 2005” and currently “account for roughly 65% of monthly cash JGB transactions, up from 12% in 2009.” Welcomed by some, this “increased foreign involvement also raises the risk of a rapid or unruly retreat.”
Tags: 2005, 65%, Bond market, Foreign investors, Japan, JGB transactions, Overseas, Retreat, Risk, Sovereign debt, Traders, Volatility
The Economist (December 6)
“EUROPE is breathing a sigh of relief” now that “the risk of such an odious stitch-up” initially put forward by Steve Witkoff and Donald Trump, “now seems to have receded a bit.” But it is not time to rest or squabble. “Enough dithering. Europe must pay to save Ukraine. America will not. Europe’s security depends on agreeing” on how to save Ukraine.
Tags: Agreeing, Dithering, Europe, Odious, Pay, Receded, Relief, Rest, Risk, Security, Squabble, Trump, U.S., Ukraine, Witkoff
MarketWatch (November 21)
“Developments in Japan are now creating the risk that U.S. yields could rise alongside Japan’s yields.” Amid budget concerns over proposed fiscal stimulus, yields on JGBs “hit their highest levels in almost two decades, with the country’s 10-year rate spiking above 1.78% to its highest level in more than 17 years” while 40-year yields “climbed to an all-time high just above 3.7%.” Since Japan “is the biggest foreign holder of Treasurys, with a roughly 13% share… the concern is that the country’s investors might one day pull the rug by keeping more of their savings at home.”
Tags: 1.78%, 3.7%, Budget, Developments, Fiscal stimulus, Investors, Japan, JGBs, Risk, Savings, Treasurys, U.S., Yields
New York Times (October 26)
Under Donald Trump, a “casino… now passes for the American economy.” Distinguished by froth, Trump’s “casino economy” is “built on speculation and risk. Across markets and policy, wagers on the future are being made with other people’s money at a cost that could prove catastrophic.” While it’s true that “economies run on risk, growth and ambition…. There’s risk, and then there’s reckless gambling.”
Tags: Ambition, Casino, Casino economy, Catastrophic, Cost, Froth, Future, Gambling, Growth, Money, Reckless, Risk, Speculation, Trump, U.S.
Barron’s (October 8)
“The near-simultaneous collapse of two companies tied to the U.S. auto industry is shedding new light on a fast-growing part of the financial ecosystem little known outside Wall Street.” Non-depository financial institutions (NDFIs) “now account for some 33% of all commercial and industrial loans originated by large banks” and, at the end of the month, stood at $1.7 trillion (up over 400% since 2015). “These hard-to-track loans fall outside systems that regulators can track to assess where risk is concentrating.”
Tags: $1.7 trillion, Auto industry, Banks, Collapse, Commercial, Concentrating, Fast-growing, Financial ecosystem, Industrial, Loans originated, NDFIs, Regulators, Risk, U.S., Wall Street
The Guardian (September 24)
“European leaders have been pulled to the right on migration, the climate crisis and Israel. Their weakness is undermining the democratic principles on which the EU was built.” If they “remain still and silent, hoping Trump will simply fade away, they risk giving up not just their dignity but their political agency. By doing so, they are allowing far-right forces to fill the void and tilt the balance permanently.”
Tags: Climate crisis, Democratic principles, Dignity, EU, Europe, Far right, Israel, Leaders, Migration, Political agency, Risk, Silent, Still, Trump, Undermining, Void, Weakness
Bloomberg (September 13)
“President Donald Trump’s most concrete step to rein in unprecedented US budget deficits — sweeping tariff hikes — faces the danger of a legal reversal that would put the nation’s finances on an even shakier footing.” While expert opinion is somewhat divided on the rationale for tariffs, “few disagree that tariff hikes are indeed generating a new stream of cash for the Treasury,” a stream that could disappear with the impending Supreme Court decision, placing “Trump’s deficit plan at risk.”
Tags: Budget deficits, Danger, Decision, Expert, Finances, Legal reversal, Opinion, Rationale, Risk, Shakier, Supreme Court, Tariff hikes, Treasury, Trump, U.S., Unprecedented
Fortune (August 27)
“Investors are underestimating the inflation risk of President Trump’s tariffs, which will push up import costs,” concludes analyst Henry Allen of Deutsche Bank. “One indicator forecasts that U.S. inflation may soon exceed 4%. Consumers are also expecting higher prices. But the inflation swaps market has yet to reflect these risks.”
Tags: 4%, Allen, Analyst, Consumers, Deutsche Bank, Forecasts, Higher prices, Import costs, Indicator, Inflation, Investors, Risk, Trump’s tariffs, U.S., Underestimating
Barron’s (June 19)
“The escalating conflict between Israel and Iran has sent oil prices higher over the past few days. If history is anything to go by, the pressure it’s putting on global energy costs will fade before too long.” Immediate fears of a shortage “are usually exaggerated–the risk that geopolitical events create a shortage of crude almost never materialize, even though that’s always the first thing on traders’ minds.”
Tags: Conflict, Crude, Energy costs, Escalating, Exaggerated, Fears, Geopolitical events, History, Iran, Israel, Oil prices, Pressure, Risk, Shortage, Traders
