15 ordspråk av Carl B. Weinberg
Carl B. Weinberg
Assuming that most of this windfall for producers will initially be saved, there also is an implicit demand for U.S. securities.
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European growth is projected to average less than U.S. growth for a tenth consecutive year.
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If data between now and the October or November meeting show either a re-acceleration of demand or a slowdown in productivity growth, we should be on the alert for a rate hike.
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If the euro does tumble again -- and we think it will -- we must expect the ECB to orchestrate another round of currency intervention.
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If the governments do not reaffirm their commitment to repeatedly intervene until the currency stabilizes, the intervention will fail.
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No one wants to buy the euro. Euro investments of all kinds are unappealing. The recent blip in energy prices has turned the euro zone current account into a small deficit.
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On this assessment, rates ought to stay unchanged for a very long while.
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Rising energy prices will further subtract from already-falling real income growth in Japan. In our view, a one or two percentage point subtraction from the growth rate of consumer demand at the margin will prove catastrophic to all hopes of substantial economic expansion.
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The catastrophic destruction of wealth than began in January 1990 has left assets ? equities and real estate, mainly ? deflated against a mass of liabilities that are mainly bank loans.
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The growing perception is that Japan is falling back into a dark hole of recession again.
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These lead to tighter credit conditions and falling stock prices as their collateral assets are liquidated. In this case, two of the failures are insurance companies, whose assets are entirely financial securities.
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This is why Europe is still an unattractive venue for offshore investors, and why the euro is as cheap as it is.
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We call this process the Death Spiral.
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We do not see any fundamentals strong enough to keep it up there --unless there is a lot of intervention with other governments joining in. We expect the move will fail.
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With less credit available, less growth is possible. So we are looking at a bad situation here that we fear can only get worse.
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