Reading the 2014 financial scenarios through the lenses of 2013

Posted on 30. Dec, 2013 by Jean Jacques Ohana in Weekly Focus

A bird’s eye view of 2013 History will help us design some financial scenarios for 2014.
The main financial event of 2013 has been the remarkable decline in financial integration (figure 1) which translates a greater confidence in the financial system. Equities of developed countries have steadily risen whereas emerging markets have tumbled. Commodities-linked currencies have [...]

Financial consequences of the ECB’s impotence

Posted on 09. Dec, 2013 by Jean Jacques Ohana in Weekly Focus

Before the last ECB meeting, we could wish that several ECB council members were determined to fight the deflationary threat in the Euro zone southern countries (figure 1). For instance, the last surprise move of the ECB refi rate down to 0.25% seemed to show that the ECB wanted to move towards a proactive quantitative [...]

Italian Government bonds: Cosa succede esattamente?

Posted on 19. Nov, 2013 by Jean Jacques Ohana in Weekly Focus

Italy is the clearest loser of the euro zone crisis. Since 2010, the country has suffered from an overvalued currency and absurdly high private and public debts’ interest rates given its positive primary fiscal balance (before payment of interest rates).

As showed in figure 1, the borrowing costs of Spain and Italy depend much more on [...]

The rebirth of Japan: hold Japanese stocks

Posted on 28. Oct, 2013 by Jean Jacques Ohana in Weekly Focus

The most important achievement of Abenomics thus far is probably the turnaround of public debt dynamics.

This has not been achieved by austerity (the path taken by the Eurozone, with little success so far) but by increasing the gap between nominal growth and interest rates. Namely, the fiscal and monetary stimuli have raised real growth and [...]