Tag Archives | central banks

GDP Apr16

Global GDP saw record fall in 2015 – new IMF data

New data from the International Monetary Fund confirms that last year’s collapse in global GDP was even worse than first reported. As the chart shows,the fall when measured in current dollars was a record $4.7tn, versus $3.3tn in 2009.  And GDP was down 6% in percentage terms versus 5.3% in 2009: Even more worrying is […]

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Oil market rally under threat as Doha meeting fails to agree

Yesterday’s failure of the Doha oil producers meeting will hopefully reintroduce a note of sanity into oil markets.  After all, Saudi leaders have made it clear, time and time again, that they were no longer interested in operating a cartel where they take the pain of cutting production, and everyone else gains the benefit of […]

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Currency Apr16

US Federal Reserve aims to devalue the dollar, again

What we “assume” can make an “ass of u and me“, as the proverb says.  And that is certainly true of the way central banks have manipulated the major currencies since the financial crisis began in 2008, as the chart shows of the US$’s movements versus the Japanese yen and the euro: It shows the change […]

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Index Apr16

Reality battles illusion in world financial markets

“Buy on the rumour, sell on the news” is one of the most reliable definitions for a weak market.  And that seems to have been the picture in Q1 across commodity, stock and bond markets. The key issue is the ongoing battle between Reality and Illusion: Reality accepts that ageing populations have lower levels of […]

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Central banks cannot control economic fortune of 7.3bn people

Trillions of dollars have been spent on stimulus by central banks in the developed world since the financial crisis began in 2008.  Clearly these policies haven’t worked – but they are now lining up to do more of them. In this interview with Tom Brown, deputy editor of ICIS news, I argue that their analysis […]

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Oil Mar16

Oil market speculators profit as central banks hand out free cash

Oil markets are entering a very dangerous phase.  Already, many US energy companies have gone bankrupt, having believed that $100/bbl prices would justify their drilling costs.  Now the pain is moving downstream. The problem is the central banks.  Hedge funds have piled into the oil futures markets since January, betting that there would be lots […]

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FT

If only the central banks could print babies

The Financial Times has kindly printed my letter below, arguing that central bank stimulus can’t restore growth to previous Super Cycle levels. Sir, John Plender’s excellent analysis “Central banks’ waning credibility is the real threat to confidence” (Insight, February 17) highlights the need for a new narrative to explain the economic slowdown of recent years. […]

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Expect $25 – $30/bbl oil and lower chemical prices in 2016

More than $2.3tn was wiped off the value of global stocks last week as China’s slowing economy and currency depreciations spooked investors around the world, leading to the worst start to a year for markets in at least two decades.  This is the Great Unwinding of policymaker stimulus in action. Worse is likely to come. […]

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ECB President has New York temper tantrum as Board blocks major new stimulus

“There is no doubt that if we had to intensify the use of our instruments to ensure we achieve our price stability mandate, then we would.”  (Mario Draghi, New York, Friday) Pity poor Mario Draghi, President of the European Central Bank (ECB).  He is used to the adulation of markets – and adores his nickname […]

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Budgeting for the Great Unwinding of policymaker stimulus

There have been 35 “flash crashes” in US oil markets so far this year, when prices swung up or down by 200 basis points (2%) – before reversing the move by > 0.75%.  That’s 35 occasions when the markets were out of control.   It is tempting to blame this on misfiring algorithms at the […]

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