There’s been so much discussion about the Euro recently, with many people offering views on how we came to be where we are. I’d suggest that giving the limitations of the Euro structure, the ECB mandate and most critically, the failure of the Euro region to sufficiently meet the characteristics of an Optimum Currency Area…
Best practice for matching non-profit annuities in most countries, certainly from a risk perspective, is still to cash flow match (or at the very least, match key durations) using government bonds. The theory is that the insurer isn’t then exposed to changes in the term structure on interest rates, only exposed to illiqudity/reinvestment risk to…
Italy’s yields are heading towards 8%, which is about the same as South Africa. And South African inflation is flirting with 6% while Eurozone inflation is looking more like 1%. Europe is in serious trouble and very few South Africans have yet woken up to exactly how serious this trouble is. [update: intrade betting has it…
“[The ECB] will end up as the highly credible defender of the value of a currency that no longer exists.” It’s becoming increasingly clear that Europe has a problem to which the solution will be world-changing. The way I see it, there are only two real possibilities: The ECB does act as lender of last…
Great piece outlining the very real, very possible and very very awful possibilities and implications of Italian default. I wouldn’t want anything to do with any bank that has much at all to do with European banks or European sovereign debt. The old South African Rand is seeming like a safer relative bet than at…
So European politicians have more or less agreed a deal which may, more or less, push some of their problems to one side for a period. Yes, I’m not madly optimistic about this as a cure-all. Â This is not the end of the Euro problems. Part of the deal is a “50% loss for private…
This is really fantastic news. Â The Swazi King is apparently reluctant to accept the loan from South Africa because of the conditions imposed in the agreement. I was quite harsh in criticising the granting of the loan with only conditions for improvement far down the line. Â (I still believe the first condition should be an…
Gold has had a fantastic run, getting to within sight of $2,000 recently. Many see this as a clear indication of hyper inflationary pressures arising out of loose monetary policy. The informed recognise that you can’t have hyperinflation if all sensible measures of actual prices other than a particular, volatile commodity are showing very low…
