Tag Archives | Bank of England

“Reservations are no longer necessary at many high-end restaurants”

Think back a moment to September 16 2008.  Newly released transcripts analysed by the Wall Street Journal and Financial Times reveal for the first time what was really going on that day at the world’s most important central bank. Lehman Bros, one of Wall Street’s largest investment banks, had just gone bust.  Merrill Lynch, another giant, had […]

Continue Reading

“Bad news barrage sinks New Year consensus”

Markets stopped operating in their true role of providing price discovery sometime ago.  Instead, they became dominated by the central banks, determined to prove their theory that increased asset values can stimulate sustained economic recovery. They, of course, have the firepower to bend markets to their will.  Nobody else could have spent $16tn in this manner […]

Continue Reading

You can’t print babies to create new demand

What would you have done 5 years ago, in 2009, if you had been given $16tn to restore global economic growth? Would you have boosted spending in areas such as education, health and infrastructure in the belief this would create a sustained boost to economic capability?  Would you have cut taxes in order to encourage entrepreneurs to develop new businesses and promote […]

Continue Reading
D

Central banks pop champagne corks as stock markets soar

Central bankers mean well. But, of course, good intentions do not guarantee good results. Their intention since the start of the 2008 crisis has been to boost financial markets. They have therefore provided $tns of liquidity, which has indeed produced record highs in major stock market indices such as the S&P 500 and Dow Jones […]

Continue Reading
Diamond.png

Barclays CEO finally resigns

Bob Diamond, Barclays CEO, has finally resigned this morning. It is a scandal that he, or any of the Bank’s Board, ever thought that he could hold onto his job. He was, after all, head of Barclays Capital when the fixing of LIBOR rates took place. It is also a measure of the confused sense […]

Continue Reading
Brent Jula11.png

Oil markets set up another ‘triangle’ pattern

As promised yesterday, the blog looks today at the impact of high frequency trading (HFT) on oil markets. This now takes place in micro-seconds. It is algorithm-driven via ‘black boxes’, and so fast that as Andy Haldane of the Bank of England notes: “Around 40,000 back-to-back trades can take place in the blink of an […]

Continue Reading
UK housingFeb11.png

UK house prices slip in H2

UK housing markets followed the US lead in recent decades. Conservative and Labour governments both shared a belief in extending property ownership as widely as possible. But what neither foresaw was the ‘unintended consequence’. Their policy of boosting home ownership coincided with the entry of the BabyBoom generation (those born between 1946-70) into the 25 […]

Continue Reading
RICS Nov10.png

UK house prices begin to slip

The UK housing market has presented a confusing picture over the past 2 years. Unlike Spain, Ireland, or the USA, the lax lending conditions of the Boom years did not seem to lead to major price falls. In fact, along with Australia (benefiting from China’s commodity boom), UK prices even appeared to recover. This was […]

Continue Reading
BoE.png

Bank of England endorses New Normal

The Bank of England has become the first major central bank to endorse the argument that we are moving towards a ‘New Normal’. In an important speech this week, its Governor Mervyn King, set out the argument that we can look forward to: “a SOBER decade – a decade of Savings, Orderly Budgets, and Equitable […]

Continue Reading
NYSE holding period.png

“Impatience can ruin a whole life”

Anyone running a chemical company knows that the benefits of certain key decisions can take years to develop. Many companies had to support their nascent pharma businesses for 20 years, before steady profits began to flow. Whilst major complexes can easily take 10 years from inception to completion. Yet in recent years, investors have become […]

Continue Reading