There was an article in yesterdays’ Wall Street journal that questioned the idea that stocks are a better long term investment than bonds. Moreover, it pointed out the importance of other types of assets such as commodities. This is part of a broader debate on asset allocation, pushing away from stocks. Many of the ideas in read more

The last three days of market selloffs (-3.4% in the S&P500, -4.4% in Europe, or -4.2% for the BRICs) has generated a debate on whether we are in for a more serious pullback. Some are saying that the rally had not been for real nor based on fundamental improvements. Numbers like “another -10/-20%” are being read more

Maybe this is not the time to try to think through the medium-term outlook of an asset class (but it’s easier to resume writing on this than to comment on the 90% tax on bonuses…). But I think one of the most interesting questions to think about is which countries will fare better than others. read more

The Fed said they are prepared to buy US Treasuries outright, which is a policy action that can be analyzed from many angles, some more complicated than others. The bottom line is that it increases the probability that we end up paying for the current fiscal expansion and balance sheet problems through the inflation tax read more

This posting will be a short and fairly idiosyncratic note on Argentina’s debt management. Nothing more than that, maybe less… According to an article yesterday in Ambito Financiero, the Argentine government is about to get going on its financing needs for 2009. Apparently, a swap of ‘prestamos garantizados’ (PGs) for local debt linked to floating rate Badlar read more

After a week being back from my favorite southern country (Uruguay), I realize not much has changed in G7’s policy stance. At the same time, markets away from the US banking system seem to be normalizing. I think US policy continues to pollute the picture with its lack of clear direction/diagnostics. Every macro tool available read more

Last week I attended a seminar by Nobel Prize Winner Bob Lucas, on the current international credit crisis. He gave a very big picture view based on a comparison to the 1930s crisis. His bottom line was that as opposed to the Fed response in 1931, this time around the Fed policy response is not read more

As I said in my introductory newsletter issue (before switching to a blog format), traveling and spending time with the family is an integral part of this unemployment spell. This implies spending a few weeks in Argentina, which makes it difficult to avoid the local papers. I hope to return to non-Argentine issues in my next posting. read more