Tag Archives | liquidity

Most major financial markets have doubled since 2009 lows

The period since March 2009 has been a wonderful time for most investors in the major markets.  As the blog’s 6-monthly update shows, almost every index has increased, and by large amounts: Russia has been the biggest winner, up 151%, due to its oil and gas export position The US is up 147%, as the […]

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Financial markets worry as Fed talks of ending stimulus

After 5 years of government stimulus, policymakers are having to think about their exit plans.  US Federal Reserve chairman Ben Bernanke retires in January, and most of the blog’s clients in the financial community believe that he intends to start the process before he leaves, perhaps as early as next month. This is likely to prove very scary […]

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Japan’s 7% Nikkei index fall highlights risks ahead

We are now nearly at the end of May, and still there is no sign of a sustained recovery in demand. This mirrors the weakness seen in January and March – normally also very strong months. Now, unless seasonal patterns are overturned, demand will remain slow until September – when people return from holidays and […]

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Financial markets reach the ‘melt-up stage’

A month ago, the blog highlighted the potentially major implications of the Bank of Japan’s (BOJ) push to devalue the yen as follows: “However, the BOJ has a slightly different agenda. It aims to devalue the yen, not the US$. And the yen has already fallen close to $1: ¥100 compared to $1: ¥93 before […]

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Demand collapses as stock markets hit new records

Financial markets long ago lost all touch with reality. Not only have central banks provided $tns of cheap liquidity with the specific aim of pushing stock markets higher. But they have also allowed computers to dominate trading, so no single market now knows what it is pricing. Chemical markets, and those who operate in them, […]

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Western stock markets in bubble-mode, again

The blog’s 6 monthly review of global stock markets highlights a very unusual pattern since global demand and chemical markets peaked on 29 April 2011, as the chart shows: • Markets in developed economies have powered ahead with Japan up 24%, the US S&P 500 up 14%, the UK up 8% and Germany up 6% […]

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Policy makers reach the fork in the road, again

“Two roads diverged in a yellow wood, And sorry I could not travel both” These lines by famous American poet Robert Frost provide a good description of the critical cross-roads now being approached for the 3rd time since June 2008, as the impact of the QE3 stimulus reduces. Each time previously, policy makers have simply […]

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Slowing markets underline failure of central bank policies

As we approach year-end, it is interesting to review performance of the blog’s 3 benchmark products since the start of the major central bank liquidity programmes. The chart begins in January 2009 when the G20 stimulus programme was being prepared, and then follows the impact of the QE2 programme in H2 2010, Twist in H2 […]

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Central bankers fail to learn the Wellington lesson

‘Masterly inactivity’ was Wellington’s policy in his successful European wars against Napoleon in the early 19th century. The English general was always under great pressure from the politicians to ‘do something’. But Wellington knew he had to defeat Napoleon decisively, and could not risk losing men and resources in irrelevant actions. His Waterloo victory then […]

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Spain’s economy in “extreme difficulty”

Some things are too ‘obvious’ for highly-paid professionals in the financial world to accept. If life was this simple, then clients might ask why their fees were so high. Therefore they maintain a fiction that what is obvious is not the full story. Interest rates are a classic example of a simple issue which is […]

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