China – Inscrutable, or Screwed?

Editor’s Note: Today we are running a guest editorial from our good friend Tom Jefferies at HoweStreet.com. Tom is seasoned veteran of the financial markets with tours of duty at various top-flight media organizations. He has a unique focus on the global macro environment garnered over years of study, real world experience across many borders, and access to top-flight investment talent across the globe. Enjoy!

What if…

Central bankers have made it very clear they are leery about taking away the punch bowl.

Mr. Trichet laid out the ECB concerns and potential paths in an editorial appearing in the Financial Times today. Stable prices are his first concern: “First and foremost, should the non-standard measures trigger risks to price stability, we will immediately begin to unwind them and ensure the continued solid anchoring of inflation expectations.”

Rant: So how about the mind of the market Mr. Expert?

As I said, I don’t often watch TV. I know many do and seem to find it helpful. For me, it creates confusion. Watching the market each day is enough confusion for me. But unfortunately I did it again, flipped on the financial news yesterday afternoon, after leaving my screens, and there they were, the ubiquitous panel of “experts” to tell us exactly what happened yesterday, why it happened, and what to expect in the future. Ugghhhh……

Political Differential Moves Markets Too

In our analysis of currencies we're constantly reevaluating the growth and interest rate differentials between countries. The reason is simple: better growth and higher interest rates make investing in one currency, relative to another, more appealing.

But what about political differential? Is that really something that could influence the way currencies behave?