Archive | Financial Events RSS feed for this section

Germany could face €86bn bill from a Greek default

Who would pay the bill, if Greece defaulted on its current €320bn debt ($340bn)? This is no longer just a theoretical question.  Of course, we have all known since 2012 that Greece would never be able to repay its debt.  But the EU covered up this hard truth by a ‘pretend and extend’ policy: The default deal deferred repayment […]

Continue Reading

Market volatility jumps as Great Unwinding continues

As I have feared, major volatility is developing in financial and chemical markets, as the Great Unwinding of policymaker stimulus continues.  The chart above shows the dramatic increase in the benchmark portfolio since the Unwinding began in mid-August: There was very little volatility from January until August, with prices generally remaining within +/- 10% Volatility then […]

Continue Reading

Europe’s QE programme fails to support US markets

Its been a fine run for the Boom/Gloom Index of financial market sentiment.  Every time it has weakened, as in January, central banks have rushed to support it with ever-larger volumes of free cash. But the European Central Bank’s new €60bn/month ($65bn) programme doesn’t seem to be providing the same support for US equities as before, […]

Continue Reading

Volatility rises as central bank policies prove wishful thinking

Q1 was very difficult for many companies and investors.  They had wanted to believe since 2009 that central banks could somehow control the global economy: The oil price would always be $100/bbl The US $ would always remain weak Central banks would always be able to stimulate growth in the economy Stock markets would always go up in the […]

Continue Reading
OFR Mar15

US watchdog warns on today’s “quicksilver markets”

What could go wrong in today’s financial world?  Many stock markets in the West are hitting new highs, and central banks are promising they will do nothing to spoil the party.  But as Gillian Tett of the Financial Times warned on Friday: “Before anyone gets too thrilled about equities, they should read a sobering research document from […]

Continue Reading

US$ breaks out of 30-year downtrend

Attention has rightly been focused on the collapse of oil prices over the past 6 months.  These have further to fall, but the major part of the move must now be behind us.  After all, Brent was at $104/bbl when I first forecast the move in mid-August, and closed at $56/bbl last night, so probably “only” has $20/bbl-$30/bbl further downside. […]

Continue Reading

European interest rates go negative as Draghi boosts stock markets

Historians will not look kindly on Mario Draghi, head of the European Central Bank. They will ask what he thought he was doing, issuing an extra €1tn ($1.05tn) of debt from March 2015, when the Eurozone was already struggling under a dead-weight of government debt: In the big countries, Italy has $47k of debt per person; […]

Continue Reading

Stock markets see Winners and Losers appear

The world’s major financial markets hit bottom exactly 6 years ago, on 6 March 2009.  They then began their recovery, fuelled by expectations of a quick V-shaped recovery as a result of G20 stimulus plans. At that date, prices had fallen in all markets versus their pre-Crisis peaks: The world’s largest Index, the US S&P […]

Continue Reading

What a difference a QE programme makes

 ”What a difference a day makes Twenty-four little hours Brought the sun and the flowers                                            Where there used to be rain” (lyrics, Renee Olstead) What would financial markets do without Mario Draghi, the head of the European Central Bank (ECB)?  A month ago, they were worrying about deflation arriving in the Eurozone and the […]

Continue Reading

Mckinsey says global debt now 3x global GDP, and rising

A major new report from consultants McKinsey confirms my concerns over the dramatic increase in global debt levels since stimulus policies began in 2008.   As their chart above highlights: Global debt has risen by $57tn to $199tn since 2007, nearly 3x global GDP Government debt is up by $25tn, with three-quarters of this in the developed […]

Continue Reading