Unconventional Wisdom

Government and banks are keeping failing companies alive with cheap credit, exacerbating China’s problems of debt and overcapacity.

A weak pound and freedom from EU regulatory strictures will stimulate the U.K. economy and leave the worst effects of the referendum to compound the euro zone’s woes.

The ECB leader’s stress tests and determination to fight deflation makes euro area banks attractive.

A restructured corporate sector has revitalized its earning power and stands ready to benefit from Abe’s structural reforms.

Export-dependent EM economies face years of weakness and financial instability as they shift to a greater reliance on domestic demand.

Like politicians, asset managers have become increasingly polarized — and extreme — in their views of the world. It could be a long time before markets return to their natural state of equilibrium; in the interim investors should proceed cautiously.

Investors who believe that historically low Treasury bond yields have to rise may be in for a very long wait. The current relationship of earnings yields to Treasury bond yields is hardly unprecedented.