Q&A with Author Peter Zeihan: How Shale is Reshaping America and the World

Absent Superpower

We recently met with geopolitical strategist Peter Zeihan to discuss world events since the American election and his new book, “The Absent Superpower,” released last month. In the book, Peter credits energy and resource innovations with reshaping the global geopolitical environment. He predicts by 2019, US oil production costs could drop to $25 per barrel, […]

French Economic Uncertainty at All-Time Highs

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The rise in European government bond yields has been widespread since lows in early fall last year, led by Italy and (now) France. As investors turn to the relative safety of bunds, the spread between French and German yields (light blue line below) has risen to multi-year highs. In addition, the economic policy uncertainty index […]

Is the European Investor About to Become More Omnivorous?

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With yields in Europe well below 2% for the better part of the last five years, foreign bonds–especially US Treasuries, trading at an increasingly higher spread to German counterparts–offered an appealing alternative. Appetite for USTs is one that remained strong for 50 straight months as yields in Germany fell nearly continuously. In November, however, European […]

Brent-WTI Spread Widest in Months, More to Come?

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Weekly field production of crude oil in the US averaged a steady ~15%yoy growth from the beginning of 2012 until mid-2015. That rate dropped into negative territory as production declined an average of ~2%yoy in the last year and a half. Advances in drilling technology over the last several years, detailed in geopolitical strategist Peter […]

European Economic Sentiment Data at a Nine-Year High

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EU economic sentiment data beat expectations in December and rose to levels not seen since 2007. Business confidence led the overall increase with rises in both the industrials and services sectors. A simple diffusion index of this data tracks the breadth across the Euro Zone (19 countries) and the European Union (28 countries). In both cases, […]

The Widening Gap Between Europe’s ‘Hard’ and ‘Soft’ Data

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Flash PMI data for Europe’s manufacturing sector, at 54.9 for December, paints an ever more positive picture, having surpassed the most recent high reached in early 2014 to retake levels not seen since 2011. The problem? Hard data (i.e. industrial production, released yesterday) isn’t keeping pace with the increasingly optimistic survey data. We’ll have to wait […]

Zew Survey Steady, but Looks More Like 2007 than 2013

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The economic expectations component of Germany’s Zew Survey came in slightly lower than expected at 13.8 (steady, but undershooting consensus of 14.0). The current situation component remains firmly in positive territory, however, rising to 63.5–well above previous (58.8) and consensus expectations (59.1). Looking at the monthly data going back ten years, with data from each […]

Rise in Euro Break Up Odds. Thanks, Italy.

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The Sentix Euro Break Up Index is on the rise again, up to 24.08 in the latest monthly reading (as of 11/30/2016). Unsurprisingly, the main driver of the overall increase is Italy. In advance of the constitutional referendum to be held this Sunday, the probability that the country will exit the eurozone (light blue line/ […]