Financial Markets » Human Action

You say stimulus, I say stimuli, let's crank the whole thing up

When the second big wave of stimulus is foisted upon us, it will mark the beginning of a very rapid decent into economic chaos. read more…

Explaining Rand strength 7 months later

When all correlations go to 1. read more…

Investing 101 Addendum: Property

The housing market could be one of the largest Ponzi schemes in history. House prices have been systemically propped up by a glut of thieved capital, but that capital is starting to run dry, and as it does, so house prices will falter. read more…

On CPI inflation and the Rand

We still expect 3% CPI inflation in 2010, average USDZAR of 6.40, and lower cumulative repo rate of up to 200 bps before the end of the SARB’s easing cycle. Data out today confirms the direction of these trends. read more…

The Great Risk Shift

The “Great Risk Shift” – if you haven’t already, it may be time to re-think the developed-/emerging-markets sovereign risk distinction. Deutsche Bank Research looks at reasons why emerging market credit risk may be overpriced relative to developed economies. HA concurs and maintains it is only a matter of time until smaller sounder economies borrow for less than their developed counterparts. read more…

Filling the derivative hole

Developments surrounding sovereign debt and their off-balance sheet liabilities in the form of derivatives such as currency swaps pose serious inflationary risks over the next five years. read more…

Update post: UK debt on the brink?

We track developments since our post of December 2009 where we laid out likelihood of British fiscal crisis in 2010. It seems the bus may have arrived slightly ahead of schedule. read more…

QE2 and its implications for the Rand

Quantitative easing is set to become debt monetisation in 2010. Let’s call this QE2. We still expect the Rand to ratchet higher against major currencies like USD, GBP, EUR, and JPY. The market is likely to see EM currencies in a new light once the champagne bottle cracks on the QE2’s prow. read more…

Stimulus is a Phantom Menace (Part 3)

In trying to revive the US housing market and other bubble sectors the Fed monetary stimulus and US government bailouts represent easily one of the biggest frauds in economic history. Money printing is rife and will only get worse and the wealth of the nation is being stripped with every dollop of fake monetary miracle-whip. read more…

Stimulus is a Phantom Menace (Part 2)

In China the central planners are bungling from one mountain of Keynesian wastage to another. It is no wonder Jim Chanos is calling China, “Dubai times 1000″. Even China must, sooner or later, man up to the economic realities of this world. read more…

Stimulus is a Phantom Menace

One of the tragic ironies of economics is a whole nation of people, investors, business owners, analysts, political leaders and policy makers all trying their sweaty-browed best to fight the necessary correction from the unsustainable fantasy land. read more…

MOPEing up liquidity

News out the US yesterday was that the Fed increased the discount rate by 25 bps to 0.75%. Human Action reckons this is purely a cosmetic move to signal tightening to the market, but behind the scenes the Fed is still loosening monetary policy through QE.

The discount rate is the rate at which banks borrow read more…