Tag Archives | S&P 500

Global stock markets weaken as Great Unwinding of stimulus continues

It is 7 years since global stock markets bottomed after the 2008 financial crash.  But as my regular 6-monthly update on their performance shows, it has been a very mixed picture since then.  The chart shows how prices have moved since their pre-2008 peak in the world’s 8 major markets, and in the US 30-year […]

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Common sense continues to elude central banks as they battle demographic cliff

Central banks are in a losing battle, as they try to reverse the inevitable slowdown created by the arrival of the demographic cliff.  Last year’s 5% fall in global GDP in current dollars tells its own story. Common sense would tell them they can’t possibly win.  After all, how do you persuade New Olders in […]

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Financial markets feel impact of the Great Unwinding

Its not been a great start to the year for those who have trusted in conventional wisdom: Western stock markets have been reeling, with the US S&P 500 Index down sharply since Monday It has been the worst opening for world stock markets since 2008 – not a good year for investors China’s currency has […]

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Index Dec15

Great Unwinding creates Great Divergence in financial markets

Most traders prefer to be with the crowd – then, at least, they can’t be personally blamed if things go wrong.  Instead, they can claim that “nobody could have seen the change coming”.  So as we approach year-end, many traders are becoming very nervous as the Great Unwinding of policymaker stimulus means that markets start […]

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Phase 2 of the Great Unwinding of policymaker stimulus begins

Greece, Iran, China – suddenly real world issues are starting to dominate the headlines.  And few people now believe that printing more money is the way to solve these issues.  Instead, political leaders are being forced to take the hard decisions they have ducked for so long. Financial markets are clearly reflecting the change.  They […]

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Volatility rises as central bank policies prove wishful thinking

Q1 was very difficult for many companies and investors.  They had wanted to believe since 2009 that central banks could somehow control the global economy: The oil price would always be $100/bbl The US $ would always remain weak Central banks would always be able to stimulate growth in the economy Stock markets would always go up in the […]

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Boom/Gloom Index suggests S&P 500 close to its peak

How long can the juggler keep all the balls in the air? That is the question that compels us to stand in the square and watch her skill at work. We have the same fascination watching central bankers at work – they similarly aim to keep financial markets aloft, to create their desired ‘wealth effect’. But we know that […]

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Shiller warning suggests S&P 500 bubble coming to an end

Nobel Prizewinner Prof Robert Shiller correctly forecast the dot-com collapse in 2000, and the 2008 financial Crisis, using the chart above.  Now he is warning we risk a 3rd collapse. The problem is that Western central banks have undertaken the largest financial experiment in history.  Their policy has been to boost financial markets, particularly the US S&P 500 - the world’s […]

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Index Jun14

Financial market melt-up takes S&P 500 to new record

A year ago, the blog suggested that financial markets were reaching their most dangerous ‘melt-up’ stage, driven by investor complacency about the ability of central banks to protect them from any downturn.  This analysis was confirmed in November, when absurdly high prices were paid for works of modern art, smashing previous records. Gillian Tett of the Financial Times (another of […]

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The trend is your friend until it isn’t – part 2

“May you live in interesting times” is a Chinese proverb which has an alternative meaning as a curse.  And the blog suspects this duality of meaning may start to make a lot of sense as we go through 2014. We have, after all, been in a very strange world for the past 5 years.  Markets […]

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