Is this the dark side of ultra-low interest rates?

Insightful, counterintuitive cure, or good-money-after-bad, asset-bubble creating folly? That seems to be the decision when it comes to the low interest rate, money supply expanding, liquidity promoting actions of many central banks. Paul Krugman, amongst others, is seriously considered about the US (and the developed world together) entering into a Japan-style (or worse) liquidity trap […]

Repo down by 50bps

Looks like my money is safe – Reserve Bank cut rates as predicted. Thinking about trying to predict for each MPC meeting then tracking my performance over time so I can be held accountable. Will mull over this first I am not that sure I’ll be sufficiently confident to stick my neck out in future!

Unreal desires for deflation

It’s clear some people just don’t get that deflation is catastrophic from an economic perspective. You would have though that Japan’s lost decade (is it still only a decade?) would be sufficient warning. Michael Pento from Euro Pacific capital writes about the options open Bernanke to stimulate the US economy through open market purchases given […]

Risk, liquidity and the triumph of economics over alchemy

Sharemax appears to be spiralling to its doom. Multiple stories today report that they are late on dividend payments to investors and may not be able to pay dividends in the forseeable future. Cash has run out. The overvalued, over-geared properties cannot support the income stream that was demanded from them. No surprises here then. […]

Property investment – the value of data over opinions

Lightstone have a trick up their sleeves. Their raison d’être is collecting, analysing, understanding and packaging data for themselves and others to use to understand past, current and future property valuations. Their housing price index is more robust (and more independent) than those of the banks based off their own data and target markets. Rather […]

CPI at 3.7% for July 2010

From Stats SA The headline inflation rate in July 2010 (i.e. the Consumer Price Index for all urban areas in July 2010 compared with that at July 2009) was 3,7% The official inflation rate (i.e. the percentage change in the CPI for all urban areas in July 2010 compared with that in July 2009) was […]

Book Review: The Big Short

Michael Lewis, of Liar’s Poker fame, has written an engaging account of the role that subprime lending played in the global financial crisis. The new book is called The Big Short: Inside the Doomsday Machine The jargon that Lewis uses is generally explained and shouldn’t prevent non finance geeks from understanding the role of subprime […]

Basel III likely to be tempered

The FT has an article (Banks win battle to tone down Basel III) describing how the proposed new rules for banking capital requirements might have some of the new requirements around liquidity removed or weakened. Key amongst these new considerations is the limitation of mismatches between the term of assets and liabilities, which would limit the danger […]