Sober Look's Blog

Analyst

Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, global economy, asset management, risk management, derivatives, regulation, and policy, particularly as it pertains to capital markets.

Why Won't the Fed Raise Rates?

When the Federal Reserve's Open Market Committee (FOMC) meets this week, there will be pressure from various quarters to raise the federal funds rate. Jamie Dimon, chairman of JP Morgan, has stated blankly “Let’s just raise rates."

US Corporations Are Engaged in a Massive Debt-Binge - Here’s Why

Just as governments are cutting back on issuing new debt, the corporate sector has taken up the role of being the largest source of new debt in the United States. This shift in debt issuance is readily apparent in Chart 1.

The Big Disconnect in the Pension Industry

When two of the biggest US pension funds reported very disappointing financial results this month, it became apparent that the pension industry needs a reality check. For the past fiscal year the California Public Employees...

The Looming Shortage in Government Bonds

Ever since the 2008 financial crisis, there has been a persistent shortage of high-quality government debt. More than just a safe haven in times of financial stress—the so-called 'flight to quality'—the supply of high-quality sovereign debt has been steadily shrinking. This shortage became acutely apparent with the results...

What the Bond Market Is Telling Investors

Over the past month, the global bond markets have been sending out signals that all is not well with the global economies. Initially, the surge in negative nominal rates in Europe and Japan rattled many investors in both the fixed income and equities markets.

The Fall in Commodity Prices Hits the Canadian Banks

With the release of Canadian banks’ second-quarter results, investors are beginning to measure the impact of the oil price collapse on the domestic financial industry. Widespread are the write-downs and other provisions...

Fiscal Policy to the Rescue?

When appearing before their political masters, central bankers, invariably, urge them to adopt an expansionary fiscal policy. Ben Bernanke and now his successor, Janet Yellen, have pleaded with Congress to adopt a more stimulative fiscal policy...

Understanding Negative Interest Rates

When the central banks of three European countries and the European Central Bank (ECB) itself introduced negative interest rates (NIR) in mid-2014, many considered it be a temporary measure, a new experiment in monetary policy.

The Fed Could Be Back in Play in 2016

One or more rate hikes by the Federal Reserve in 2016 remains a real possibility. Why would the Fed consider such a policy action given the recent collapse in inflation expectations? Over the past couple of months many analysts and...

Canada's Changing Financial Landscape, Part 1: The Securities Industry

The worldwide collapse in commodity prices is now working its way through the financial markets in Canada. Canada is just now experiencing fundamental changes in the financial community, the sector better known as F.I.R.E. (Finance, Insurance and Real Estate)...

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