201409.21
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Open Sesame

Open Sesame is, of course, the phrase used by Ali Baba to open the 40 thieves’ cave and plunder their riches in the Arabian Nights tale. It would seem an apt phrase to describe the frenzy surrounding the IPO of Alibaba, the Chinese internet commerce firm that floated shares in the US last week. Certainly…

201409.19
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Credit Rundown of Opposing Propositions That Aren’t Necissarily Opposed

There is an interesting dichotomy taking shape in credit markets, including those around the globe (that will be a separate post). Some of this, I think, relates to what FOMC member Richard Fisher related today about concerns over asset bubbles. I think the Economic Times of India summed him up the best: Already there are…

201409.18
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‘Markets’ Want More Yen Debasement?

The good news in Japan for August trade figures is that imports fell 1.5% Y/Y, but that was balanced by an almost identical 1.3% Y/Y decline in exports. Confounding all orthodox expectations, the yen’s radical devaluation did nothing to press divergence between imports and exports as it was “supposed” to. Instead, imports matched exports, at…

201409.12
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Praying to the God of ‘Global Growth’

Part of the tale being spun perpetually about the economy, any economy in this day and age, relies on nothing more than circularism. Because monetary policy is so captured by managing expectations, meaning that economists and policymakers will never be anything but positive about anything ever again, you end up with nonsense as a foundation…

201409.09
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Currencies Break, Gold Does Not

With credit markets in Europe and the US taking a bit of a pause for profit-taking or reassessment, it is notable that currencies have not. The euro finally broke free of what looked like a steady range, though unfortunately to the downside. While that may be celebrated by orthodox economists in Brussels and elsewhere, it…

201409.08
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The Depressive Tale of Nominal Yields

It is easy to get carried away with modern finance, diving into the immense flourishing of finance that has taken place. Conceptions have become far more complex, sometimes unnecessarily so, leading to impairments in distinguishing forest and trees. In credit markets, we focus narrowly on spreads and curves because that is where the “action” seemingly…

201409.03
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Seven Years Without Trend and the Clock Is Ticking

They say the road to hell is paved with good intentions, but that is not the only ingredient in the asphalt used to make the highway to Perdition. Typically, intent is augmented (or actually degraded) by a degree of incompetence that masquerades as complexity. The breadth of that observation is staggering in the current circumstances…

201409.02
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How We Got Here

Last week was pretty much a disaster, not just economically speaking, for a wide swath of the globe – from Japan’s ongoing “unexpected” collapse to Europe’s “unexpected” third go at contraction (without recovery) to a very dim and “unexpected” view of credit markets pretty much everywhere including the US. This week started out with more…

201409.01
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Secular Stagnation Or The Cusp Of A Boom?

I’ve mentioned several times recently that within Alhambra we often have vigorous debates about the economy and markets. I’m a big believer in the power of competition to improve outcomes whether we are talking about the macro economy or the micro debates about portfolio strategy in which we engage. The debates we have internally are…

201408.29
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US Credit Bear Answers Europe & Japan

I have already written enough on a Friday before a long weekend about the growing pessimism in credit, but it bears reinforcing that such removal of central bank faith is not limited to Europe and Japan. US credit markets and dollar systems are equally partaking in the speed and depth of the bear flattening. Just…