Tag Archives | interest rates

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Eurozone crisis gets worse, not better

Global bond investors have found a new worry. 10 year interest rates in Spain, the world’s 12th largest economy, have risen alarmingly in recent weeks. As the chart shows, they are now above 7% (blue column) compared to 4% when the blog first focused on the Eurozone crisis (red). 7% is a critical level, as […]

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C is for Complexity

The blog’s series on the VUCA world today reaches C for Complexity. Interest rates are key to company profitability. They determine rates of return for new investments, and their affordability. They also have a major influence on consumer spending patterns. The debate over their future direction is just one example of current Complexity: • Financial […]

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Germany in the firing line as Greek default nears

Interest rates are key to the direction of the global economy. But not in the way that was true during the 1982-2007 economic SuperCycle. Then, there was a global surplus of savings, due to the vast numbers of people in the Wealth Creating 25 – 54 age group. So interest rates reduced dramatically in most […]

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Global financial markets at important crossroads

Stock markets around the world are at an important crossroads. The blog’s regular <a href="http://www.icis.com/blogs/chemicals-and-the-economy/2010/09/global-markets-decoupled-over.6 monthly review compares today’s market levels with their 2007/8 pre-Crisis peaks. And as can be seen, none have yet hit a new high. This is quite surprising, given the scale of the G20 and central bank stimulus/liquidity packages over the […]

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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 […]

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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 […]

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Demographics boosted demand, now drives savings

The blog is very pleased to have been invited to write for today’s Financial Times. Its article looks at the influence of the Western ‘baby-boom generation’, born between 1946-70. Typically, as in the UK, the period saw a 25% jump in the number of births compared to pre-War levels. Since 1970, births have fallen back […]

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Global markets decoupled over past 6 months

The blog’s 6 monthly survey of major stock markets, now including the US 30 year Treasury bond, shows mixed performance since March: • The worst performers have been Shanghai and Tokyo, down ~12%. They are also the worst performers since the pre-Crisis peak, down ~50%. • In the middle are the US, UK, Russia and […]

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Questions to the chemical market genie

With the Chairman of the US Federal Reserve saying the outlook is “unusually uncertain“, its time to summon the chemical market genie. Of course, rubbing the lamp is not always successful. And if the genie does arrive, one can only ask 3 questions. So rather than risk wasting them, the blog has learnt to spend […]

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Baby-Boomers cut spending, start saving

Consumer spending is 70% of US GDP. And because US GDP is so large, this means the US consumer is 17% of global GDP. This is the same as the combined GDP of China and Japan, who rank 2 and 3 after the USA. So a change in US consumer spending matters. And it particularly […]

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