Abenomics

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The Great Market Tide Has Now Shifted To Risk-Off Assets

A global sea-change in risk appetite & sentiment
Friday, July 8, 2016, 3:03 PM

In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and U.S. Treasuries.

But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit lows.

Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after. 

What the heck is going on? » Read more

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Japan's Economy Is Shattering

Abenomics is fast proving to be a costly failure
Monday, April 28, 2014, 11:09 AM

When you are a fully-industrialized island nation that makes its living in the world by importing raw materials, fashioning them into useful exports, and collecting the difference as your profits, then you simply have to run a trade surplus for the model to work.

Which means Japan is in big trouble: » Read more

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Abenomics' Dismal Anniversary

Why we need to care about Japan's continued decline
Tuesday, September 10, 2013, 1:39 PM

Abenomics, the radical set of reflationary policies designed to (air)lift Japan out of its multi-decade slump, is approaching its first anniversary. Don't expect a joyful celebration. » Read more