Archive | Leverage RSS feed for this section

Ring of fire Feb15

Brexit a disaster for the UK, Europe and the world

First, the good news.  It has long been recognised that the UK economy is over-dependent on financial services, and that its housing market – particularly in London – is wildly over-priced in relation to earnings.  The Brexit vote should ensure that both these problems are solved: Many banks and financial institutions are already planning to […]

Continue Reading
D

The Downturn arrives

It is 5 months since the blog launched its IeC Downturn Alert, using prices from 29 April. It wrote then that: “They don’t ring bells at market turning points. Otherwise, we could all retire to the Bahamas.” But its argument was that a peak was likely, as crude oil had remained stable at $125/bbl for […]

Continue Reading
JUUGS Nov11.png

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, […]

Continue Reading
Triangle.png

Political, Social concerns drive non-Western companies

Last week’s New Normal seminar in Houston continued the success of the Singapore and Frankfurt events. It sparked lively debate about the major opportunities for future growth in the New Normal. These include: • The over-55 age group in the West – already 272m in number • Those millions emerging from poverty in the East […]

Continue Reading
D

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 […]

Continue Reading
D

Groundhog Day again as Quarter 4 starts

The great film comedy Groundhog Day saw Bill Murray doomed to repeat the same day in his life, until he learnt to become a better person. Sadly, financial markets have yet to learn from his example. Every quarter, the investment banks produce new stories aimed at pushing stock/oil markets higher. Then high-frequency traders make $millions […]

Continue Reading
CSFs.png

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 […]

Continue Reading
New Normal logo.png

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 […]

Continue Reading
Sgt Pepper.png

A 4-point Action Plan for chemical companies

Today’s economic situation is getting worse, not better. The blog believes this is because most policymakers still refuse to accept the wisdom contained in the Beatles’ ‘When I’m Sixty-Four’ song on their iconic Sgt Pepper album. The Western BabyBoomers (those born between 1946-70) are the largest and richest generation that the world has ever seen. […]

Continue Reading
US housinga Sept11.png

US housing starts fall as the BabyBoomers get older

US subprime lending was the starting point for the economic crisis now spreading around the world. The blog believes a key cause was policymakers refusal to accept that the ageing of the BabyBoomers (those born between 1946-70) would cause a major change in demand patterns. Instead, they have continued to believe that underlying levels of […]

Continue Reading