One slightly bright spot in Europe has been the use made of the pandemic crisis by some European banks. European banks are still laden with bad debts from the bloc’s sovereign debt crisis, and unlike U.S. banks, still not adequately recapitalized, and still struggling under depressed rates. All these woes Read more…
Part of the emerging narrative about the long-term economic effects of the COVID-19 pandemic and the business closures ordered in response to it suggests that it will lead to the ascendancy of the Big. The reasoning goes that big companies will be able to survive the downturn and will eat Read more…
Market Summary for Week of February 22, 2019 This week we are keeping it short. We remain bullish on the U.S., and on several foreign markets. The U.S. market is still a buy, in our opinion. Breakouts of the type we have recently seen offer opportunity for higher U.S. stock Read more…
China’s fourth-largest bank, the Bank of China (not to be confused with the state bank, the People’s Bank of China) issued $6 billion worth of perpetual bonds in late January. A “perpetual bond” is a bond with no maturity date; that is, it simply pays an income stream forever. The Read more…
Executive Summary 1. Trade deficits aren’t the big issue with China — fraud and theft are. Some of the U.S. administration’s public comments on the trade conflict with China have focused on the trade deficit between the two countries. Wall Street Journal contributor and former Chair of the Council of Read more…
As we have done for decades, we are writing with our favorite global investments for 2019. This prediction is for the first half of 2019. If there is no world recession in 2019 and one is not expected for 2020, or if a good trade settlement is reached with China, Read more…
Don’t Fight The Central Banks European QE is ongoing, and we believe it will have the same effect in Europe that it did in the U.S. — boosting stock prices. We think that dividend-paying exporters will do particularly well. Europe is not the only place where easing is still ongoing. Read more…
Five Bull Markets Around the World — Thanks To Central Banks The U.S. — We’re BullishThe U.S. does not have a QE program at all now, but the U.S. stock and bond markets are getting support from the dovishness of the Fed minutes. In spite of much improved economic growth in Read more…
Regulators are Forcing Banks to Get More Conservative Last Wednesday, Federal Reserve governor Daniel Tarullo addressed the Fed’s symposium on stress test modelling. This is a now-annual gathering of Fed officials and financial industry participants, where the discussion focuses on the Fed’s efforts to evaluate the strength of banks in the face Read more…
Small Banks Feel the Regulatory Squeeze Through our own contacts in community and regional banks, we have heard many accounts of the effect of post-crisis regulations on this sector of the U.S. economy. The chart below outlines the consolidation of the banking sector. Source: Investor’s Business Daily Read more…
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