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Investors prefer JUUGS to PIIGS

Financial markets have become increasingly nervous in recent weeks, since the blog last reviewed developments in global bond markets. Its conclusion then was that investors are worrying more about return of capital, than return on capital, as we transition to the New Normal. This is because 272 million westerners are now over 55 years old, […]

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EU’s plan to borrow from the poor boosts S&P 500

The brave new world of modern finance continues to amaze the blog. It still has problems with the idea that the answer to having too much debt is to borrow some more. But last week’s Eurozone summit not only did this (as noted by the German central bank), but added a new element. Its new […]

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Budgeting for Austerity – the Opportunities

The 2012-14 Budget period offers great opportunities, as well as great challenges. Will companies continue to focus on short-term developments in financial markets? Michael Porter’s Shared Value concept instead offers us a powerful model for creating future growth. Will policymakers stop focusing on the 24 hour news cycle and instead begin to set out the […]

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US financial markets defy gravity

Blog readers can choose their favourite leading indicator this week. In financial markets, the US S&P 500 index continued its recent rally. If you believe the bullish analysts; a Greek default, lengthy arguments between Germany and France, and the need to expand the Eurozone bailout fund into the €1-2trn range ($1.4-2.8trn), are all good news. […]

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Europe’s austerity packages start to bite

Its the ‘big picture’ issues that we need to watch these days, no longer detailed forecasts of individual product growth rates. They are driving chemical product sales in every major region. The chart above from the Financial Times highlights Europe’s drive towards austerity. Long gone are the days of the 2009 G20 meeting, when everyone […]

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Financial markets party whilst petchems remain weak

Financial markets continued their start of quarter rally last week. But their volatility amazes even seasoned observers. The US Dow Jones Index has moved at least 100 points in 57 of the last 58 days, for example, whilst crude oil jumped $3/bbl on Friday alone. Of course, the continued correlation between stock and oil markets […]

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2012 Budgets

The blog will publish its fifth annual Budget Outlook next weekend. As usual, it is therefore time to review last year’s Outlook. Past performance may not be a perfect guide to future outcomes. But it is one of the best that we have. The blog’s 2008 Outlook ‘Budgeting for a Downturn’, and its 2009 ‘Budgeting […]

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Politics, beliefs return to dominate economics

The 10000 readers who downloaded the blog’s first Budget White Paper in December 2009, ‘Budgeting for a New Normal’, will remember the issues highlighted in the triangle above. At the time, they were being widely ignored, as policymakers assumed that the economy would soon return to its previous SuperCycle. Today, this optimism has been revealed […]

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Critical Success Factors in the New Normal

Yesterday’s Scenarios hopefully provided valuable insight into the challenges ahead for companies and individuals. They also suggest some Critical Success Factors for achieving a successful transition to the New Normal, as set out in the chart above: 1. Flexibility. This involves adapting to new circumstances and being willing to compromise rather than battling for an […]

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Scenarios for the transition to the New Normal

The transition to the new Normal is likely to be painful and long-lasting. Future demand growth will be slower as the ageing Boomers spend less and save more. More regular and deeper recessions are likely to become a feature of the global economy once more, in contrast to the relatively smooth growth seen during the […]

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