The recent improvement in global PMIs and especially in employment in the United States have created a strong optimism in markets about the recovery. However, it is important to be cautious about a V-shaped recovery when the leading indicators remain weak.
Continue reading A Bounce Is Not A RecoveryCategory Archives: On the cover
Why The European Recovery Plan Will Likely Fail
The 750 billion euro stimulus plan announced by the European Commission has been greeted by many macroeconomic analysts and investment banks with euphoria. However, we must be cautious. Why? Many would argue that a swift and decisive response to the crisis with an injection of liquidity that avoids a financial collapse and a strong fiscal impulse that cements the recovery are overwhelmingly positive measures. History and experience tell us that, indeed, the risk of disappointment regarding the positive impact on the real economy is not small.
The history of stimulus plans in the eurozone should alert us against excessive optimism.
Continue reading Why The European Recovery Plan Will Likely FailGlobal US Dollar Shortage Rises As Emerging Markets Lose Reserves
The pace at which emerging market economies are losing FX reserves is staggering. In March, emerging economies lost around $1.5 billion in foreign exchange reserves per day, according to Bloomberg.
Three Reasons Why The Eurozone Recovery Will Be Poor
The Eurozone economy is expected to collapse in 2020. In countries like Spain and Italy, the decline, more than 9%, will likely be much larger then emerging market economies. However, the key is to understand how and when will the eurozone economies recover.
Continue reading Three Reasons Why The Eurozone Recovery Will Be Poor