7 January 2020

Daniel Lacalle

PhD Economist and Fund Manager
  • Sweden launched its negative rate plan almost six years ago and has now reversed it due to the financial risks that arose from such policy. Photo: Bloomberg

    Sweden ends its experiment of negative rates

    - Jan 3, 2020 10:18am
    Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists who start from a wrong diagnosis: the idea that economic agents do not...
  • German Chancellor Angela Merkel’s ruling coalition has recently agreed a package of budget-neutral measures to protect the climate and restore its green credentials. Photo: Reuters

    Will Merkel’s climate plan work?

    - Sep 23, 2019 11:51am
    A few months ago we commented that there will be no energy transition without competitiveness. Given the proposal of German Chancellor Angela Merkel’s ruling coalition to carry out another huge green plan, the European Union faces...
  • Washington has accused Beijing of manipulating its currency, escalating the year-long trade war between the two sides. Photo: Reuters

    A currency war will only weaken growth

    - Aug 13, 2019 10:40am
    A few months ago many of us read about the conspiracy theory of “the nuclear option”, according to which China could generate a huge debt crisis in the United States and destroy the US economy if...
  • US Federal Reserve Chairman Jerome Powell is set to announce the latest decision of the Federal Open Market Committee on interest rates on Thursday morning (HK time). Photo: Reuters

    The Fed’s unnecessary rate cut

    - Jul 31, 2019 10:55am
    If there is anything that is evident it is that the United States does not need a rate cut.?With the economy growing at 2.1 percent, unemployment at 3.6 percent, 170,000 jobs being created per month, and...
  • New Greek Prime Minister Kyriakos Mitsotakis (left) meets with outgoing Prime Minister Alexis Tsipras at the Maximos Mansion in Athens on Monday. Photo: Reuters

    Greece: Defeat of populism at the hands of reality

    - Jul 11, 2019 10:40am
    The defeat of Alexis Tsipras in Greece is the loss of those who came to power promising that two plus two would equal twenty-two, of paper promises and policies that harm those that they pretend to...
  • Leaders and delegates attend a family photo session at the G20 leaders summit in Osaka, Japan. Photo: Reuters

    Forget the G20, global manufacturing recession is here

    - Jul 2, 2019 10:28am
    The G20 summit has not generated unexpected or significant headlines, and is certainly not a catalyst for real change in the global economic trends. The United States and China have only agreed to postpone tariff increases,...
  • With unemployment at 3.6 percent and annualized GDP growth expected to remain above 2.3 percent, demands for a rate cut in the US are unwarranted, argues a market watcher. Photo: Bloomberg

    Why the US doesn’t need a rate cut now

    - Jun 20, 2019 10:25am
    The United States does not need a rate cut now. Consumer confidence is high, unemployment is low and Treasury yield is at 2.1 percent, while credit to the economy and corporate financing are also holding up....
  • Between 2004 and 2018, the United States filed 41 complaints against China at the World Trade Organization, focused on 27 different areas. Photo: Reuters

    Much more than a trade war

    - Jun 14, 2019 11:05am
    In recent weeks we have been reading a lot about the so-called trade war. The matter is better described as a negotiation between the largest consumer and the largest supplier with important political and even moral...
  • ECB, led by Mario Draghi, is widely expected to unveil details of a plan to offer euro-area banks generous terms on upcoming long-term loans. Photo: Reuters

    The ECB’s monetary trap

    - May 31, 2019 10:44am
    The European Central Bank continues to disproportionately inflate the debt bubble of the Eurozone, while the economic slowdown of the main European economies worsens. What was designed as a tool for governments to buy time in...
  • Neodymium mined in Baotou, China. The country dominates global production of rare earths. Photo: Bloomberg

    Rare earths are no weapon in a trade war

    - May 24, 2019 11:10am
    Rare earth reserves are not a trade war game-changer. Here’s why: 1. There are abundant reserves. The US has several years of its annual consumption in domestic reserves and can also use alternative sources. 2. Most...
  • 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...