Tag Archives | central banks

UK savings Apr17

UK consumers face difficult times as Brexit unwinds the housing bubble, and financial services de-cluster out of London

Brexit negotiations are likely to prove a very uncomfortable ride for UK consumers as Russell Napier of Eric, the online research platform, warned last week: □  ”Public sector debt remains at near-historic highs (in peace time!) and for the first time this public sector debt comes with a private sector bubble □  Credit card debt […]

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London housing market hit by Brexit, China’s capital controls

London’s housing market was always going to have a difficult 2017. As I noted 2 years ago, developers were planning 54,000 new luxury homes at prices of £1m+ ($1.25m) in central London, which would mainly start to flood onto the market this year. They weren’t bothered by the fact that only 3900 homes were sold […]

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Chemical industry flags rising risk of global recession in 2017, with Trump set to “clear the decks” at the start of his first term

The chemical industry is the best leading indicator that we have for the global economy.  It has an excellent correlation with IMF data, and also benefits from the fact it has no “political bias”.  It simply tells us what is happening in real-time in the world’s 3rd largest industry. Sadly, the news is not good. […]

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Interest rate and US$ surge mark start of the Great Reckoning

The bond market vigilantes are back.  And they clearly don’t like what they are seeing.  That is the clear message from the charts above, showing movements in 10 year government bond interest rates for the major economies, plus their exchange rate against the US$ and the value of the US$ Index:   As I warned […]

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S&P 500 volatility close to 43-year lows as uncertainty rises

Something very strange is happening in US stock markets, as the above chart highlights:   It shows weekly (blue line) and average quarterly (red line) volatility in the US S&P 500 Index since 1928   Both are very close to 43-year lows, going back to September 1973, at 1.7% and 1.6% respectively This seems quite […]

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Budgeting for the Great Reckoning

One thing is certain about the 2017 – 2019 Budget period.  ”Business as usual” is the least likely Scenario to occur. The IMF chart above highlights the key issue: for the past 5 years, all its forecasts of a return to “normal” levels of growth have proved over-optimistic:   Back in 2011, the IMF was […]

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Ring of fire Feb15

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’

Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]

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Brexit Oct16

Markets doubt Carney’s claim to have saved 500k UK jobs

Last week as the BBC reported, Bank of England Governor, Mark Carney, explained to an audience in Birmingham that the Bank had saved the UK economy after the Brexit vote in June: “Between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum, he said.  ”We are willing […]

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Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter

Once upon a time, oil markets were based on facts.  Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]

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Central banks defy slowing global economy by destroying markets’ power of price discovery

Markets have one main function in life – price discovery.  If I want to buy, and you want to sell, the existence of a market allows us to discover the price at which the market will balance in terms of supply and demand. History, however, provides many examples of times when rulers decided they knew […]

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