Although the US labour market has already been very tight for a long time, the Fed has been hesitating to raise interest rates.
The Fed insists that its policy depends on the labour market, supposing that the strong job data leads to high inflation, but despite almost full employment in the US economy, there has been no rate hike since the first rate hike in December 2015. The reason is obvious: the Fed is not seeing the job data but seeing something else.
Continue reading Fed rate hikes: Janet Yellen is aware of secular stagnation
We continue to research how the financial markets moved amid the subprime-loan crisis in 2008. In the previous article, we illustrated that the fall of the US house prices had actually warned investors several months before the stock markets collapsed.
Many asset classes suffered from the crisis. In such a situation, bonds and commodities are sometimes the keys to benefit from the adversity.
Continue reading Benefiting from the financial crisis: gold and US Treasury bonds in 2008
It is not always easy to predict a collapse of a financial bubble, but there often is something that indicates it in advance.
In the case of the subprime mortgage crisis in 2008, some famed fund managers such as George Soros or John Paulson knew it could be as serious as it eventually happened to be. This article explains the economic situations during the crisis and shows the statistics that preceded to imply the timing of the collapse of the stock markets.
Continue reading How you could have predicted the financial crisis in 2008