Risk assets especially global equity and oil have been rallying of late and Vix has dropped. This piece looks at what has driven this optimism and relief rally, whether its sustainable and where some of the weak credit links remain. What’s driven this optimism? The best explanation is that signs of peaking or decline in… Continue reading Market Exuberance: Thoughts on EM Credit, Oil and Consolidation
COVID19 and its policy response has been damaging to global growth and a sharp global recession is now the base case. Most major economies are likely to experience sharp recessions as economic activity is shut down to avoid over-taxing the health care system. Globally this suggests rolling recessions, albeit very close on their heels beginning… Continue reading Economic Challenges of Covid19: Deepening Recessions
I recently updated some macro scenarios around the impact of the novel coronavirus (covid19) which update my initial thoughts and my early 2020 risk scenarios. This companion post looks at some of trends which will shape not only the near-term scenarios but may shape any eventual recovery. Many economists are expecting a V-shaped recovery when the… Continue reading Potential Longer-term Implications of Covid19
This piece updates my earlier analysis (late January) on Covid19 and is accompanied by a short note that looks in more detail at some longer term trends. My January analysis highlighted the importance of the policy response including the quarantines and travel cancellations in driving economic impact, making the impact unprecedented. The global economic impact began… Continue reading Assessing the Next Wave of Macro Stress from Covid19
The coronavirus onset in China and escalating policy response has hit global markets over the last week investors fear that it will hurt global growth. The policy response has shut down many key transport nodes and forced quarantines of urban areas where over 50 million people live. Meanwhile, many international airlines and stopped flights to… Continue reading Economic impacts of the Novel Coronavirus: What to Watch
Since early December, global market sentiment has been quite upbeat, as developments seen as risks including a tit-for-tat tariff escalation, an acute, unplanned and hard Brexit and (premature) monetary tightening and credit stress receded. These reinforced our view that global recession was unlikely, though growth remains relatively sluggish. All these trends and continued monetary support… Continue reading Global Scenarios: What Can go Wrong?
Since I launched this blog, sharing my favorite books for the year has been one of the posts I’ve most enjoyed writing. I hope you enjoy reading them and sharing with me your recommendations. While I read a lot of thought-provoking pieces appear in feature article, academic journal and other formats, it’s a bit easier… Continue reading Thought Provoking Reads 2019