Consumers around the world are being indirectly taxed through record high gas prices. This of course hurts consumers’ pockets and can raise inflation fears. We wanted to take a look at the crack spread between WTI crude prices and US petroleum prices as measured by the Energy Information Agency. We outline the results below. The […]
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Thematic Piece
As I mentioned in my January 30th post, I believe that the ‘ China friendly’ Kuomintang party, after their sweeping victory in the legislative elections, will win the Presidential elections. Once this occurs it is likely that we will see the new leadership attempt to open direct ties with China allowing tourists, and more importantly […]
*FX data updated on March 27th 2008 Policy makers in China have not only continued their anti-inflationary rhetoric, but have started acting on it. We have seen the RMB reach several new highs verse the USD in recent days (7.01). Additionally, Chinese authorities have increased reserve requirements for the second time this year by 50bp […]
Energy prices are showing absolutely no signs of abating; those peak oil theorists may be on to something (at least in the short-run). We just don’t see oil prices coming down significantly without a considerable reduction in demand; through improved fuel efficiency or a considerable economic slowdown. Now that we have settled that, we want […]
The US isn’t alone when it comes to inflationary concerns. Chinese consumer prices continue setting new interim highs, and it is not going unnoticed. February’s CPI number came in at 8.7%y/y vs. 7.1%y/y in January. It is important to keep in mind this reading includes the adverse effects of severe winter weather and the Chinese […]
Inflation, we have been talking about, the market has been talking about it, but has the Fed? In short the answer is yes, but it appears the market may not think so. For the first time since its introduction in 1997, the 5-year TIP traded at a negative yield, implying a significant lack of confidence […]
BDI Revisited in new entry written 11/08/2008 Globalization and world trade has become the major growth force in emerging market economies and has significantly influenced developed nations as well. The big question is; how or has the US led slowdown affected this trend. There are of course a series of indicators we can look at […]
I was asked my views on the Chinese inflation situation today and came up with this short piece: The Chinese growth story is now sharing the spotlight with the country’s mounting inflation concerns. In January consumer prices rose 7.1%y/y; to a level not seen since 1996, a point when China was in the midst of […]
*Sorry for the delay in posting we were experiencing serious computer issues One of the questions on everybodys’ minds is how high would inflation need to go before the Fed would reconsider any further rate cuts. During the recent months’ we have seen increasing down side risks to the US growth forecast, while at the […]
Global equity markets have clearly priced in a US recession. We expect, & the futures market is currently indicating, that the US markets will open tomorrow down around 4%, after the MLK holiday… Has the market overpriced the probability of a US recession? We believe so. Looking back at the last recession in 2001 we […]