Author Archives: macrohart

Is It Time to Buy Emerging Markets?

The dismal performance of emerging market equities during the past three years (a total of -20%) suggests that a rebound may lie around the corner. Yet, country-specific factors aside, three key global factors argue otherwise: 1) insufficiently attractive EM valuations, … Continue reading

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Third Time Unlucky or The New Sino-American Symbiosis

The global economy is facing its third deflationary shock in succession. After the US economy and the Eurozone, China is the epicenter of the latest crisis. The erstwhile Sino-American Symbiosis resurfaces in a new, more nefarious form. The causation runs … Continue reading

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China’s FX Rate: Strategy & Opportunism

China’s latest FX adjustment is neither a “competitive devaluation” nor the opening shot in a “currency war”. Given the negative contribution of net exports to growth as of late, it is also unrelated to efforts to boost growth. Instead, the … Continue reading

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Three Simple Reasons Why the New Greek Government Will Blink

As the positions between the Greek government and the Troika harden, it appears that an agreement to extend the current bail-out program or secure some other form of official financing becomes ever more elusive. Yet, it is highly unlikely that … Continue reading

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Russia’s Ruble Let Loose Prematurely

Russia’s central bank yesterday abandoned its policy of unlimited FX intervention in support of the ruble. This precipitates the shift to a freely floating exchange rate regime which was due to commence only in 2015.  The move came in response … Continue reading

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A Glide Path for the Fed: Earlier, But More Predictable and Flexible Tapering

The Fed began the process of ending QE and thereby kicked off the end of a 30-year long cycle of progressively easier monetary conditions. In starting the tapering process earlier than expected, the Fed has traded off incremental adjustments in … Continue reading

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A Bad Idea Returns: Negative Deposit Rates

As ECB policy rates skirt the zero bound, expectations for the use of alternative tools, such as negative deposit rates are again on the rise. However, this is  an ineffective and potentially harmful policy option. Several problems may arise: transmission across other … Continue reading

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