Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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NEGATIVE CREEP: THE GLOBAL ECONOMY © Leo Haviland February 2, 2015

The European Central Bank’s magnificent march into full-scale quantitative easing captivates cheerleaders hoping for significant European (and worldwide) economic growth, a decisive defeat of the evil deflationary dragon, and further bullish ascents in stock marketplaces such as the S+P 500. Prior massive money printing, especially but not only by the Federal Reserve, engendered optimism, enhanced near-term economic growth, and helped to propel many equity benchmarks (notably the S+P 500) upward. So given the ECB’s bold policy announcement on 1/22/15, shouldn’t we all be rather positive about global (and Eurozone) economic prospects? No.

Of course the ECB’s decision to begin devouring “euro-denominated investment-grade securities issued by euro area governments and agencies and European institutions in the secondary market” is only one variable. But despite that central bank’s long-hoped for purchasing scheme, adequate Eurozone GDP growth still appears out of reach, and overall international economic prospects look less robust than they seemed only a few months ago. In addition, despite the ECB’s dramatic policy intervention, key government securities yields show little signs of climbing. This holds true not merely for Germany, but also the United States and Japan. Plus the broad real trade-weighted United States dollar remains relatively strong, nearing critical points achieved in mid-2008 during the global financial disaster. After their massive tumble in recent months, commodities in general (use the broad Goldman Sachs Commodity Index as a benchmark) remain well beneath their June 2014 (and previous) heights.

Yet at least shouldn’t the ECB’s big easing at least manage to rally key stock arenas, and especially to push the S+P 500 above its December 2014 summit? Recall what happened to the S+P 500 after the Federal Reserve unveiled its quantitative easing rounds, or what occurred after Japan introduced “Abenomics” and Quantitative and Qualitative Easing!

However, the S+P 500’s inability thus far to creep up to new bull trend highs beyond its 12/29/14 summit at 2094 contrasts with its prior behavior after the Fed’s QE programs. Again, keep in mind recent yield patterns of key government yield signposts such as the US and German 10 year notes, as well as the stronger dollar and weaker commodities. Also, emerging stock marketplaces in general, with various twists and turns, gradually have sagged lower since their spring 2011 high. So although admittedly not much time has passed since the ECB’s December action, these interrelated factors and slipping world growth prospects indicate that the ECB’s new policy probably will not produce the hoped-for rally in the S+P 500 and related stock playgrounds. These present-day marketplace variables, especially when interpreted alongside their history during the mournful 2007-09 global economic crisis, instead suggest that a notable S+P 500 downtrend is or soon will be underway. And in today’s environment, what happens to American stocks if overall US corporate earnings slow or move into reverse?

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Negative Creep- the Global Economy (2-2-15)


Europe’s ongoing sovereign debt and banking crisis grasps many headlines and excites worldwide fear. America’s continuous federal fiscal fiasco and restless debates regarding it will continue to capture attention as election year 2012 beckons. Yet noteworthy debt, deficit, and funding issues lurk in other financial corners.

In America, state and local debt topics generally feature less prominently in marketplace and national media commentary. However, the federal story is not the whole story. State and local debt is substantial. Moreover, pension (and other benefit) funding obligations represent a huge challenge for many states and communities. It pays to focus on these matters alongside federal and household indebtedness, for it further highlights the status and policies of the 50 United States as a major debtor nation.

In America, in principle, each citizen “is king of its castle”. However, in a representative democracy, it should not be surprising that debt trends and levels for “individuals in general” substantially mirror those for the nation as a whole. As thriftiness can be popular, so can appetite for debt.

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State and Local Travels – US Non-Federal Debt Vistas (12-6-11)