For the next few years, the increased debt financing of the United States will not be a problem for markets. That will remain the case as long as the US dollar is the unchallenged world reserve currency, as it has been for decades. When you survey the world and look at other countries’ economic systems and current situations, the US emerges as the best or, if you are a hand-wringing detractor, the least troubled.
The Italian drama continues, with the European bond markets demonstrating great resilience despite the risks presented by the Italian government’s proposed fiscal policy stance, which has been rejected by the European Commission (EC). Earlier, after receiving Italy’s draft budget, the EC had asked Italy to explain why the government decided not to comply with European […]
Cumberland’s David Kotok emails on Clarida’s speech: “He is a prominent figure in the market community. He is known as thoughtful and a centrist. While I believe he doesn’t personally like Trump’s Fed bashing, I do not expect Clarida to refer to it. “He knows he is speaking for worldwide consumption and he knows these words he offers in his first speech can either inflame markets or calm them. I expect his remarks to be well received and carefully crafted. That is exactly what is needed given the President’s unseemly Fed bashing rhetoric.”
Excerpts from wtvr.com’s CNN Money article, Dow drops 327 points as market turbulence deepens The jittery stock market is once again heading south. The Dow dropped 327 points, or 1.3%, on Thursday, with selling accelerating after Treasury Secretary Steven Mnuchin backed out of a conference in Saudi Arabia. The index had been down 471 points […]
Government deficit out of control, irresponsible government policies, tumbling bond prices and bank share prices, threat of rating-agency downgrades, political instability – we have seen similar Italian dramas in the past that, in the end, did not lead to serious financial market contagion. Nevertheless, there are reasons to be concerned that this time the impact […]
“Monday there was first relief in European governments and in financial markets that a populist government in Italy had been prevented, but this reaction soon was overtaken by the fear that the populist parties could emerge strengthened by these events if there is a new election. The drama thus continues.”