Bill Witherell's Contributions

According to the May 4th Wall Street Journal, the International Monetary Fund (IMF) is expected to declare in a forthcoming report that China’s currency, the yuan, is “fairly valued.” As stated on the IMF website...

Financial markets let out a sigh of relief when they learned that the new Greek leftist government led by Prime Minister Alexis Tsipras has put aside its earlier demands that a large share of its debt be written down...

Global stock markets tumbled Tuesday, due in part to a sharp fall in China’s stocks, the sharpest correction in five years. In a day that saw a 2.4% gain at one point, the Shanghai Composite Index closed down 5.4%, led by financials and energy.

The slowdown in China’s economy, which in the first half had been one of the negative factors affecting the global economy and equity markets, appears to have come to an end, with Chinese manufacturers reporting...

Global growth is projected to grow by 3.6% this year, compared with 3% in 2013. For the advanced economies the outlook is for 2.2% growth versus 1.3% last year. For the emerging and developing economies, the quickening is slight, 4.9% versus 4.7%, but the rate is over twice that for the advanced economies.

Global markets are relieved that the risk of a shooting war has receded (but not disappeared), and they are rallying. The situation remains highly volatile. Threats and counter-threats are issued daily. We do not know how this drama will end. There are some substantive developments, however; and these are the subject of this note.

Following the dramatic collapse of the pro-Russia government in Ukraine over the weekend, the Ukraine parliament is working on establishing a coalition government and seeking a much-needed international financial aid package.

The Netherlands has lost its triple A credit rating by Standard & Poor’s, leaving just Germany, Finland, and Luxembourg in the Eurozone at the highest level. The downgrade to AA+ is ironic, as it appears to be the result of an overdose of “responsible” budgetary policy.

Two weeks ago the OECD published their revised outlook for the global economy for 2014 and 2015. Global growth for this year is marked down to 2.7% and to 3.6% in 2014. The nearly half-a-percentage-point reductions as compared with the May projections are due to slower growth in emerging markets.

The latest data on the United Kingdom economy confirm that the recovery continues and is wide-based. The UK equity market is also advancing – but not at the pace one might expect in view of economic performance.

Seeing no need to augment its already very expansive program of quantitative easing, the Bank of Japan (BOJ) concluded its October 3-4 Monetary Policy Meeting by deciding to keep policy unchanged.

International investors breathed a collect sigh of relief due to German Chancellor Angela Merkel’s sweeping election victory last Sunday. Her center-right Christian Democratic Union party achieved its best result in more than 20 years.

This month’s economic data out of Europe confirm, if there still were any doubts, that a broad-based recovery is underway there. Global investment flows reflect this development, and it is not too late to participate.

The Bank of Japan (BOJ) met analysts’ expectations yesterday by making no changes in monetary policy. It will continue its aggressive quantitative easing policy of increasing the monetary base at an annual pace of 60-70 trillion yen.

Japanese Prime Minister Shinzo Abe received a vote of confidence for his growth and reform agenda Sunday as his Liberal Democratic Party and its small coalition partner won a landslide victory in the elections for the Diet's (Parliament's) upper house.

The Japanese equity market suffered another 3+% drop on June 5th and slipped a further 0.8% on June 6th as investors showed their dissatisfaction with a speech by Prime Minister Shinzo Abe outlining the "third arrow” of his plan to revive the economy.

This year foreign investors have plowed almost $80 billion into Japanese equities, which have been leading global markets. By Wednesday, May 22, the market was up 46% year-to-date.

International banks had reason to celebrate Monday when they received a somewhat unexpected New Year's gift from their regulators. The central bank governors and heads of supervision that oversee the Basel Committee on Banking Supervision agreed to a very substantial softening of prospective global liquidity standards.

Moody’s cut France’s rating one notch to Aa1 and is maintaining a negative outlook for France. This is not surprising, as it follows a similar move by S&P last January, but it caps what has been a very difficult month for France and its leaders.

We just completed a three-week visit to France. Paris and the French countryside remain as lovely as ever. On the surface, life in France seems normal, with shops, restaurants and hotels full, traffic heavy, and tourism intense. Indeed, arrivals at Charles de Gaulle Airport were so numerous that it took over an hour to get through passport control. However, the country is in the grip of a growing malaise.