Over My Shoulder | Mauldin Economics

Over My Shoulder

Stratfor: Europe Rediscovers Nationalism

January 12, 2015

George Friedman and I have been having an ongoing discussion (I wouldn't quite call it an argument) about the European Union and the pressures brought on by Muslim immigration. There is no doubt they are real and increasing. While this essay from Stratfor is not actually authored by George, it has his fingerprints all over it. He thinks this may be the final straw that pushes Europe back into a pre-European Union condition, were nation-states once again take control. This issue is definitely one to watch.

Download - Europe_Rediscovers_Nationalism.pdf

Michael Pettis: Interview on Chinese CPI and PPI data for December

January 9, 2015

Michael Pettis is a must-read for me. He has been based in China for a very long time, deals at the highest levels of finance society there, and really knows his stuff. This is an interview he did on China and deflation. It is so counterintuitive that lowering interest rates can actually be deflationary in China. Plus other great insights.

“It turns out, however, that under certain conditions lower interest rates and depreciating currencies may actually exacerbate deflationary pressure. Unfortunately these conditions probably apply to China and Japan. For some reason people are often shocked when I say this, even though you would have thought they would have wanted some explanation for why the roughly 35% depreciation of the yen during the last three years has not unleashed inflation, and has been accompanied by weaker, not stronger, consumption. Or again it should have been at the very least intriguing that during the last decade in China we have seen extraordinarily rapid monetary expansion but we have never suffered runaway CPI inflation, and in fact inflation we have seen has been caused by food shortages, not by monetary policy.”

Download - 1501_Pettis.pdf

Michael Cembalest: Outlook for 2015

January 7, 2015

Michael Cembalest, Chairman of Market and Investment Strategy at JP Morgan, does his take on 2015. Certainly more bullish than some of the prior pieces I have sent. This is a little longer, as are most wirehouse forecasts. But I find it useful.

“2015 looks like another year of modest gains on diversified global portfolios with US assets in the lead, even as questions around Russia’s territorial ambitions and natural gas policies, Middle East sectarian and religious conflicts, Iranian weaponization of nuclear power and a North Korean economic collapse remain unanswered.”

Download - EOTM_Outlook_2015.pdf