Today we very briefly focus on the dynamics we have observed in the US Treasury Yield Curve between two critical dates: 1. The Yield Curve at 30 September 2013 - The day before the US government shutdown officially began 2. Friday 11 October 2013, exactly 11 days into the White House, Congress and Senate stand-off … Continue reading US Treasury Yield Curve – The Shutdown Analysis (Part 1)
It is a timing thing When the Euro zone Debt driven financial crises - yes, it has been dragging on for a little while now; lurching from one convulsion to the next tremor - is headline news across most traditional newspapers in Britain, it is worth pausing briefly to consider the overall 'management efforts' of … Continue reading An orderly leap into Chaos?
We take a brief look at two interesting Treasury Yield curves today. The first Yield Curve takes a snapshot view of the yield curves at the end of Q1 2011 and Q1 2012. What is very noticeable is the fact that the overall yields for the end of Q1 2012 is significantly lower than a … Continue reading The Return of Risk?
With apologies to The Smiths; the original version of the song Panic’s lyrics reads something like this: “Panic on the streets of London / Panic on the streets of Birmingham / I wonder to myself / Could life ever be sane again?” Or is this the beginning of what we will call ‘Austerity Anarchy’? As … Continue reading Panic in the Cars of Britain?
In yesterday’s article, “Where will all the new money come from?” we concluded the brief analysis with the Sovereign Debt Maturity profiles (otherwise known as the Debt Structure) of both the USA and Italy, noting how similar the two profiles looked at first glance. Digging a bit deeper today, we would like to compare those … Continue reading The BIG Sovereign Debt Structure cliff – Part 1
Today’s brief analysis of US Treasury Yield curves and the Debt profiles of both the USA and Italy highlights the enduring question in the title of this post. The first graphic highlights one important issue. We chose 2 August 2011 versus 17 February 2012 as key dates to compare the US Treasury Yield curve. If … Continue reading Where will all the new money come from?
Are the European and more specifically the Euro-zone problems purely a matter of cultural differences, engrained in generations of ‘Nation Staters’ or something deeper in each nation-people’s psychology? It cannot purely be a difference of political ideology between the leaders and individual nations of Europe that has lead us to the brink of the … Continue reading A matter of CULTURE or PSYCHOLOGY in Europe?
It is with a little amusement that we scanned through the Economic headlines today, following Standard & Poor’s decision to finally downgrade France’s and other Eurozone nation’s Sovereign Debt rating. France lost its prestigious triple A (AAA) grade to AA+. Sarkozy and French anger? Indeed! Off course the irony is that an “outsider market agency” … Continue reading Irony and Downgrade Anger
We decided to summarise our learning from 2011 into two brief thoughts: The pains and strains of the economic sovereign debt melt-down in 2011, should stand us in good stead to deal with even more debt and sovereign strain in 2012, as More and Bigger Europe continue to miss the point; this being … Continue reading Our Lessons from 2011
Continuing the conversation and analysis on the ‘fall-out’ of the British Veto being exercised at the most recent EU Leaders (crisis) summit, it is interesting to observe two specific angles to this: Innovation Our article on ‘Recapitalising Europe’ kicked off the discussion around Innovation. It appears that the leaders of Europe (a summary of Angela … Continue reading More and Confused Europe? – Part 3 – It is Uncertain…
We pick up from the introductory article by expanding on the issue of MORE Europe, which we did not cover in enough depth. More Europe It is without a shadow of doubt that belonging to an enlarged common market has huge beneficial advantages to all its participants. However, the question of the Cost / Benefit … Continue reading More and Bigger Europe –Part 2 – It is MORE…
Yes, it will be more bureaucracy and bigger financial problems down the line... We pick up our analysis this week in the dusky glint of the aftermath of the (latest) EU Leader summit to put together a rescue package for the Euro. More bureaucracy? The inspiration for this comes for the ‘people pulling the wagon … Continue reading More and Bigger Europe…Is that what we really want?
Irrespective of how the twists and turns of the Greek political system plays out over the next few days and weeks, we believe that the Big EU (Eurozone more specifically) players and their leaders only have themselves to blame for Greece's seemingly petulant behaviour. If at the fundamental level we cannot understand that ANY form … Continue reading The Big Design: Moral Hazard, and the EU
Today (26 October 2011) is an important watershed date (or not) for Europe. Will our leaders and the politicians be able to agree an all encompassing Framework to rescue the Euro, or will we need to think about a more modular approach for the future? We believe that it might be in the Euro's short-term … Continue reading Frameworks, frameworks, frameworks…
We have been having several conversations with colleagues and practitioners in both the Enterprise Strategy and Architecture space around both Cloud Computing and the Integrated Service IT delivery space. Our brief conclusion is that Organisational Structure is everything. We believe that you cannot effectively move IT Service delivery into the ‘Cloud’ and / or integrate … Continue reading In the Cloud, Structure is everything!
A reminder of what we wrote on 22 September 2011 about Quantitative Easing: “QE – Our take on the Bell Curve Effect” (Please click on the link for the full article). Expect Mervin King to continue writing letters to the Chancellor to explain the Inflation target gap and the worsening economic landscape. It begs … Continue reading Quantitative Easing – Here we go again
Making sense of the distribution and lag effects Let us explain the problem or rather challenge of choosing between Quantitative Easing (QE) and an Interest Rate reduction to stimulate economic activity, with reference to the Bell Curve diagramme above: There are two major factors at play here: Distribution Time With a bout of QE, the effect … Continue reading QE – Our take on the Bell Curve effect
Yesterday the Independent Commission on Banking (Vickers Commission) published its long anticipated, yet low in surprises report on Banking Reform in the UK. See: Rather than rehash the analysis already performed, we only have two items to add at this stage: Get your calculators out, or at least keep the Quants busy, because unravelling and … Continue reading Get your calculators out
Ever since the Great Depression and JMK’s ‘The General Theory of Employment, Interest and Money (1936)', have we had more intense government interference and hence taxation in most advanced economies. Thank you JMK. But seriously, how much is too much? There must be value in controlling fiscal policy, monetary policy and (social) employment policy, but is … Continue reading I blame John Maynard Keynes (JMK)
The real (inflation adjusted) 30 Year T-Bill rates have since the beginning of the year averaged 1.72% (simple averaging). Since the beginning of September 2011 the average real rate has dipped to below 1.00% to 0.99%. (Our measurement). Does this mean that the flight to other asset classes is now in full-swing … Continue reading The Flight – Keeping an eye on the real 30 Year Treasury Yield Rates