Author Archives | Mikala Sorensen
Volvo Concept Truck 2020; Source: Volvo Trucks via

Transport industries on the verge of dramatic change

The trend toward computerization promises to create enhanced efficiency in sectors such as the trucking industry and aviation. However, this shift also threatens to take away jobs. In most supermarkets in London, the check-outs are self-service machines, known by the nifty little acronym SACAT (Semi-Attended Customer Activated Terminal). Instructions on how to place the goods in […]

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China real estate

China’s mortgages pose risk to financial system

Zero-down payment mortgages in China suggest an increasingly risky Chinese financial system, with symptoms similar to those seen leading up to the U.S. credit crisis. Home buyers all over China, from Guangzhou and Shenzhen in the south to Beijing in the north, are being offered zero-down-payment mortgages to cover their real estate acquisitions, recalling memories of the US subprime […]

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Reverse of the one-dollar bill; Source: user-contributed image to Wikimedia Commons

US Decline Series: Are the dollar’s days as reserve currency numbered?

Despite speculation that the days of the US dollar as the world’s reserve currency will soon be over, a number of factors make such a changing of the guard unlikely. This GRI series challenges the myth of the American decline. The dollar was crowned as the king international method of payment and unit of account in the […]

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Debunking US unemployment numbers

Do not mistake a rosy Bureau of Labor Statistics report for something that it is not. The unemployment rate did decrease in April, but only because 800,000 people exited the labour force. When unemployment numbers were released on May 2nd, spring seemed a little sweeter for US policy makers. The unemployment rate declined by 0.4 percent […]

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currency wars

Book Review: Currency Wars

In his 2011 book Currency Wars: The Making of the Next Global Crisis, James Rickards explains that we are in the third reincarnation of currency wars. He highlights the fact that the Fed is currently undertaking the biggest financial gamble in history. James Rickards, an investment banker on Wall Street for over 35 years, has turned […]

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Source: Ben Kamisar/Medill via Flickr

How will Volcker Rule affect markets?

On April 1st, the Volcker Rule comes into effect. What does that mean for banks, businesses and markets? The Volcker Rule is designed to address conflicts of interest in proprietary trading, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Proprietary trading, where banks trade for their own account and not on […]

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Japanese coast guard off Senkaku Islands

Escalating tensions over Senkaku-Diaoyu islands underestimated

The political risks of the Senkaku/Diaoyu island dispute are heavily mispriced in global markets. Conflict is still on the table. For more than a year now Japan and China have quarreled over the Senkaku/Diaoyu islands, and the tension sharpened significantly following China’s move to create a new “air defence identification zone” over the islands in […]

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U.S. Fed holds the fuse to Singapore’s bubble time bomb

The United States’ monetary policy has far-reaching, sometimes unintended consequences, and these past few years have seen unprecedented liquidity injections from the Fed. One way the stimulus manifests itself is as bubbles in other economies, where the ultra-low rate set by the Fed is like pouring gasoline on an already raging fire. Singapore’s benchmark interest […]

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New york stock exchange trading floor

Are U.S. financial markets overheating again?

Low interest rates in the U.S. enabled the 2013 bull market but have also created the conditions for another credit bubble. Covenant-lite loans, the latest financial innovation, could spell trouble. With multiple alarm bells ringing with the slightest suggestion of Fed tapering, it might be time for the interest rate of the world’s largest economy […]

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Puerto Rico capital

The threat of a Puerto Rican default looms large

Puerto Rico is about to follow in the footsteps of Detroit, with few options left but declaring bankruptcy. With U.S. retirement funds relying on Puerto Rican bonds in portfolios, the problem is likely to spread to the mainland. Echoing a previous post on Detroit’s chapter 9 bankruptcy, another U.S. local government has its public debts […]

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