21 May 2019

Daniel Lacalle

PhD Economist and Fund Manager
  • The latest US-China trade standoff is serving as an excuse for investors to sell an expensive market, argues an expert. Photo: Reuters

    Trade war: An excuse to sell?

    - May 14, 2019 11:40am
    We have been warning for months about the excessively optimistic expectations on a possible trade agreement between China and the US. The reality is that an agreement was not going to change the trend of the...
  • A file picture shows EC President Jean-Claude Juncker on the stage at an event in Europe. Worries are growing about the economic conditions in some EU member nations. Photo: Reuters

    Eurozone slowdown is worse than the global one

    - Apr 23, 2019 10:55am
    In recent days, one of the most repeated messages among European financial analysts has been this: “we are in a global slowdown“. The sentence, however, hides important nuances and very relevant differences. The European Union suffers a...
  • Despite economic challenges, corporate figures have stoked expectations for a fairly decent 2019 and 2020. Photo: Bloomberg

    Back to fundamentals

    - Mar 5, 2019 10:13am
    If we look at the key macroeconomic data published in recent weeks, the word that mostly comes to mind is “disappointing”. The slowdown in the eurozone is evident and more pronounced than what even the most...
  • European Competition Commissioner Margrethe Vestager. The EU’s top antitrust regulator has made it her mission to stem alleged anti-competitive abuses by big American tech companies with harsh fines and punishments. Photo: Reuters

    Europe is losing the technology race. Here is why.

    - Feb 18, 2019 3:14pm
    If we analyze the ranking of the main technological companies (2017), there is not a single European entity among the top fifteen. The vast majority are North American and Chinese companies. If we go to the...
  • US Representative Alexandria Ocasio-Cortez (front row, left), and Senator Ed Markey (front row, right) hold a news conference in Washington on a proposed "Green New Deal" to achieve net-zero greenhouse gas emissions in 10 years. Photo: Reuters

    The New Green Deal is just old white elephants

    - Feb 12, 2019 10:08am
    What happens when politicians see that their monster stimuli have not delivered? They bring the next rabbit out of a hat. They need a new name and a new magic solution to make citizens believe in...
  • During Nicolas Maduro's reign, Venezuela's inflation reached one million percent, and the IMF warned that the figure could reach 10 million percent in 2019. Photo: Reuters

    Venezuela – A case of socialist organized theft

    - Jan 28, 2019 10:47am
    Much has been written about the economic disaster perpetrated by the Maduro-Chavez regime in Venezuela. The magnitude of it is simply difficult to match. A sad global example of how to destroy a rich country. The...
  • The US Federal Reserve, led by Chairman Jerome Powell, could go slow on interest rate hikes for a while in order to stabilize the markets, according to some observers. Photo: Reuters

    Liquidity and low rates, wrong solutions for the wrong diagnosis

    - Jan 21, 2019 11:45am
    Recent macro data from the leading economies point to a widespread slowdown. What is more concerning is not just a logical moderation in the path of growth, but acceleration in the weakening of economies that were...
  • ECB president Mario Draghi has been reminding eurozone governments that they needed to implement structural reforms and use the period of low rates to deleverage. No one listened. Photo: Reuters

    The ECB’s quantitative easing failure

    - Dec 17, 2018 1:28pm
    The main reason why the European Central Bank’s quantitative easing program has failed is that it started from a wrong diagnosis of the eurozone’s problem – that the European problem was a demand and liquidity issue,...
  • Pro-EU demonstrators protest outside parliament in Westminster, London. Photo: Reuters

    Brexit: A deal that pleases no one

    - Nov 21, 2018 12:22pm
    The agreement announced between the British government and the European Union has been received in the United Kingdom with criticism from all sides. The defenders of staying in the European Union consider it very negative, of...
  • Former US President Barack Obama campaigned hard for the Democratic candidates in the midterms. The Democrats regained control of the House but the Republicans strengthened their majority in the Senate. Photo: Reuters

    US midterm elections: few changes, similar challenges

    - Nov 12, 2018 11:36am
    The midterm elections in the United States have produced a result that was very similar to what the surveys estimated. The “blue wave”, an overwhelming victory by the Democratic Party that was predicted by some, did...
  • The question now is not if there will be another major global financial crisis, but when, experts say. Photo: Reuters

    The next financial crisis

    - Nov 2, 2018 12:33pm
    We have been reading numerous comments recently about a forthcoming recession and the next crisis, particularly on the tenth anniversary of the collapse of Lehman Brothers. The question is not whether there will be a crisis,...
  • The global stock market slide had many traders and investors scratching their heads. Photo: Reuters

    Market crash? Another red card for the economy

    - Oct 15, 2018 4:23pm
    A few months ago I wrote this article at the World Economic Forum called “A Yellow Card For The Global Economy“. It tried to serve as a warning on the rising imbalances of the emerging and...
  • Traders work on the floor of the New York Stock Exchange. Concerns surrounding rising interest rates again took center stage after US government debt yields hit highs not seen in more than seven years. Photo: Reuters

    The US Ten-Year shows the extent of the bond bubble

    - Oct 10, 2018 11:34am
    “Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett  The US 10-year bond has reached, at the close of this article, a yield of 3.2 percent, the highest since...
  • Brazil needs to open its economy further, abandon socialist populism and attract capital. Photo: Reuters

    Brazil faces significant challenges

    - Oct 3, 2018 11:16am
    Uncontrolled spending and ruinous results: Brazil has been a prime example of the policy of “more is less”. Under Luiz Inácio Lula da Silva and Dilma Rousseff, the country felt invincible and believed that entering into...
  • China is using an artificially high yuan to buy cheap resources with the endgame being a massive devaluation in a few years' time. Photo: Reuters

    Is China a currency manipulator?

    - Oct 2, 2018 11:55am
    The US administration has avoided the debate on currency manipulation in the past years due to the impact of the financial crisis. Why? Because all major economies have tried to solve their imbalances through the same...
  • When oil prices rise abruptly we should be concerned because they can cause a domino effect on the real economy. Photo: Reuters

    Is the oil burden a rising problem?

    - Sep 28, 2018 3:29pm
    While markets become increasingly bullish, oil prices are close to a “warning zone” where the barrel could be one — if not the only — catalyst of a major slowdown. The concept of “Oil Burden” is...
  • The Indian rupee has fallen to an all-time low, becoming Asia's worst-performing currency this year. Photo: Bloomberg

    India: The biggest risk in emerging markets?

    - Sep 12, 2018 9:58am
    The biggest mistake in analyzing macroeconomic data is to assume causality to factors that are just catalysts. Don’t blame the Fed or Trump. That is just noise. The problem of emerging markets is largely self-inflicted and...
  • A trader works on the floor of the New York Stock Exchange as the Dow Jones Industrial Average passes the 25,000 mark in January this year. There has been an intense debate as to whether the market has become too expensive. Photo: Reuters

    Why I believe the US stock market is cheap vs others

    - Sep 10, 2018 3:13pm
    The stock market, like any other market, is a set of relative opportunities, not absolute ones.I have never seen a more pessimistic environment despite a stock market that continues to reach all-time highs.  Many friends are...
  • Beijing’s stealth currency devaluation will make Chinese household and corporate debt riskier, experts say. Photo: Reuters

    Why stealth yuan devaluation will hurt rather than help China

    - Aug 29, 2018 4:52pm
    I find it amusing to read some analysts stating that the Chinese government’s stealth yuan devaluation has offset the impact of tariffs. A 10 percent tariff hurts a small part of the economy. However, a 10...

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