The current debate about currency wars, the G20 meeting, QE2 (quantitative easing by the US Fed), it all makes for great Op-ed opportunities and commentary. One relevant question we prefer to focus on is that of asset pricing implications (preferably in the medium-term) and how to position our portfolios accordingly. This note is not a read more

We are at an interesting junction in the markets, with this non-trivial rally in front of significant uncertainties around the world: elections in the US next week as well as very relevant announcements expected from the Fed, while global rebalancing is being ‘designed’, the EU discussing major institutional reform and the developing world continues to read more

A boring second round electoral process -as the victory of the ruling party candidate Dilma Roussef (PT) seemed certain- gained momentum last week when results of some polls became public.   Particularly, a poll by CENSUS showed an evident shrink of her advantage, with José Serra standing only 4 percentage points behind (see table). But the read more

The still incipient September market recovery appears to respond to data that negates the double-dip view and increases credence to the gradual recovery view. Our approach has been to cautiously position for the latter, within a broader theme of a structural change in favor of EM and other non-G7 countries. In other words, we continue read more

The high volatility of the last few months has generated panic moments in the markets, perceived uncertainty about future scenarios, and sharp inconsistencies in some of the public policy debates. Though there are reasons to marginally re-shuffle the probability distribution among the most likely scenarios, there is no real reason to change the base-case scenario. read more

The lower house of congress in the US has just approved the Healthcare Bill that the senate had approved recently. This has not been priced into the market with a very high probability, at least not with this timing. Futures (that trade overnight) is showing the S&P500 at -0.8%. The negative interpretation markets seem to read more

When we wrote “The euro is naked” on February 11 we were certainly bearish, but did not expect the euro to dictate all markets behavior even at high frequency. Watching the markets these days, it is fairly clear that the FX rate EUR/USD has become the barometer for the success of the euro bailout. We read more

A week ago we said that Europe would pay dearly any policy mistake, but we did not think it would be so much so soon… The size of the potential financial package known yesterday exceeds most expectations, which is the reason of its success. In terms of the ‘theory of crisis management’ it is a read more

Markets appear to have already decided the recent package for Greece does not work and is not credible. It is not very rigorous to infer much from a couple of trading days, but the magnitude of the market movement together with the debate on the matter let us infer its failure. The package does not read more

The SEC claim on Goldman Sachs is no longer an aggregate risk to the market. Greece still is. The news last Friday about the SEC claim on Goldman Sachs had an effect on markets across the board. Today we are all more aware of the issues, the grey areas and the most likely scenarios for read more