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

IMF says world seeing “a New Reality of lower potential growth”

After 6 years of largely-wasted stimulus efforts, the world’s economic advisory bodies are finally having to accept that ageing populations really do impact economic growth. The latest International Monetary Fund’s latest World Economic Outlook finally breaks half of the taboo that has stopped most economists from accepting this seemingly common sense conclusion.  Its Summary argues as […]

Continue Reading

China GDP may fall to 1.7% in Q4, warns Bank of England

It seems that China is preparing for a difficult 18 months.  President Xi and Premier Li have to implement key decisions now, that will create winners and losers. This is therefore the moment when they have to take the pain that results from the need to reverse the ‘lost decade’ under Hu and Wen.  Otherwise, they will […]

Continue Reading

US jobs growth stalls as shale gas bubble ends

Apparently Friday’s US jobs numbers disappointed the experts.  The consensus forecast was that 250k jobs would have been created in March – yet only half the forecast actually appeared.  Even more tellingly, hiring estimates for January/February were revised down.  Separate data also showed weak growth in wages and spending. None of this was really a surprise, […]

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

A toxic combination for economic policy

UK economic policy is now coming under discussion, as May’s Gemeral Election approaches.  The Financial Times has kindly printed my letter below, highlighting the economic impact of the demographic changes now underway. April 1, 2015 9:34 pm Sir, Your editorial “Zero significance in the UK inflation milestone”, (March 27) ignores the impact of two critical variables. As […]

Continue Reading

President Xi says more to China’s economy than its growth rate

China’s economy has not had a good start to the year.  Central bank governor, Zhou Xiaochuan, admitted at the weekend that growth had “tumbled a bit too much“, adding: “China’s inflation is also declining, so we need to be vigilant to see if the disinflation trend will continue, and if deflation will happen or not” […]

Continue Reading

Atlanta Fed Q1 GDP indicator at 0.2%, as US housing, auto sales remain below previous trends

US housing starts are slowing so far this year, with February’s starts just below the million level again on an annualised basis.  This follows the steadily declining rate of home ownership, which is now back at 1995′s level of 64%.  And yesterday’s Case-Shiller report on home prices suggests the 10-City Index may well have peaked back in […]

Continue Reading
ACC Mar15

Executives struggle to keep up as volatility rises with Great Unwinding

It is looking more and more likely that the global economy hit a peak in Q2 last year, and has since been slowing.  Latest data on chemical production from the American Chemistry Council indicates a further slowdown so far this year, as the chart shows: Global production slowed to 2.8% in February from a 5% peak […]

Continue Reading
Brent Mar15a

Hedge funds moving away from ‘buy on the dips’ strategy

In recent years, financial markets have believed that “everything is for the best in this best of all possible worlds“.  Good news has taken markets higher.  So has bad news – as investors assume policymakers will apply more stimulus. As a result, a whole generation of managers and analysts has grown up without having to learn the fundamentals of supply/demand analysis.  And […]

Continue Reading