The US stock markets, and the banking sector in particular, have been on a tear since Trump's election. Here's a factual look to determine if all of the capital appreciated hoopla is really worth it.Trump Obama and the markets.png

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Friday, 27 January 2017 09:10

What Trade War With Mexico May Mean

Blockchain based closing process

A border tax would hurt foreign companies that rely on cheap Amercian labor in Mexico would get hurt first, and then the increased costs will get passed on to the US consumer. This is all part and parcel of going after Mexico via a trade war/ This also doesn't take into consideration the fact that Mexico purchases a lot from the USA as well.

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Re: Trump and his Mexican wall, you can't unring the bell once it comes to global economics. The biggest beneficiaries in terms of building materials from building a Mexican wall will likely be Mexican materials companies.1200x 1

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Nearly a year ago, I warned subscribers of consequences stemming from the ECB's negative interest rate program. Here's an exceprt from our resarch report titled  pdf European Banking Macro Issues for March 2016 (843 KB) .

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In its March 2016 report The Bank for International Settlements warns of “great uncertainty” if rates stay negative for a prolonged period.  The report also states the likelihood of a currency war of competitive devaluations if more central banks use negative rates to pace up their economy.

Europes central bank launched a large scale program for asset buying referred as Expanded Asset Purchase Programme (APP) in March 2015 six years after the U.S. embarked on quantitative easing. The APP included the purchase programme for public sector securities to the existing private sector asset purchase program. 

The EAPP consists of

  • third covered bond purchase programme (CBPP3)
  • asset-backed securities purchase programme (ABSPP)
  • public sector purchase programme (PSPP)

ECB started buying Covered bonds and asset-backed securities through two separate programs namely ABSPP and CBPP3 programmes which were started in October 2014 and November 2014, respectively, amid declining inflation and growth.  However, growth had not rebounded with inflation drifting downwards through the end of 2014 and into early 2015. This prompted the ECB to launch a major asset purchase program referred as public sector purchase programme (PSPP) through which the Central Bank would buy euro-denominated, investment-grade securities issued by Euro area governments and European institutions. ECB aimed to purchase €60 billion of assets through these three programs combined together.

In March 2016, ECB announced the addition of corporate sector purchase programme (CSPP) to APP in order to purchase euro-denominated bonds issued by non-bank corporations established in the euro area.

EU bind buying plans

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Bitcoin has dropped precipitously, and as is usual, we have the cacophony of instant digital currency pundits cackling about as if they had a clue. This is the inaugural post for the re-opening of BoomBustBlog's proprietary research (fresh paid content will be added over the next 24 hrs) and as such I want to kick it off with an indepth analysis of my Twitter stream on Bitcoin from this week.

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