02 17 2017 | by Victor Xing | Economics
01 11 2017 | by Victor Xing | Economics
Financial risk contagion: China’s capital outflow
12 22 2016 | by Victor Xing | Economics
November PCE: dollar strength weighed on goods inflation
12 14 2016 | by Victor Xing | Central Banks
A less-hawkish interpretation of the December FOMC
12 02 2016 | by Victor Xing | Economics
November Payrolls and Governor Powell on risk management
11 15 2016 | by Victor Xing | Central Banks
November FOMC minutes and debates behind guidance change
11 04 2016 | by Victor Xing | Economics
October Payrolls: decent data with stronger wage growth
11 02 2016 | by Victor Xing | Central Banks
November FOMC: forward guidance and the return of “some”
11 01 2016 | by Victor Xing | Economics
September PCE: goods and energy inflation lead the index
10 07 2016 | by Victor Xing | Economics
September Payrolls: signs of tighter labor market slack
09 30 2015 | by Victor Xing | Capital Markets
Did the ultra-stimulative monetary policy contribute to the energy crash?
The drivers behind the energy boom
The energy boom is a direct results of years of ultra-easy monetary policies by the Federal Reserve. Policy accommodation and financial repression pushed high-yield borrowing cost to historic lows, which helped finance risky investments including the U.S. shale revolution.
Please refer to this article from 2012:
The effects of higher energy production
The U.S. shale revolution financed by cheap funding allowed the U.S. to become a major oil producer. Yet, together with energy independence came excess supply. With excess supply, WTI and Brent crude prices could not be sustained above $100/bbl. What happened next was a supply driven bust, mixed with lower demand due to uneven growth.
With falling commodities sending jittery investors into less-risky assets, borrowing cost for energy companies in the high yield space have risen, adding to their woes (and resulting in recent job cuts).
Please refer to the following article from July 2015:
The energy and commodity correction is market’s reaction to policy-induced imbalances.
Next article09 28 2015 | by Victor Xing | Central Banks