Tag Archives | stimulus

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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The end of the Economic SuperCycle

A paradigm shift is underway in global petrochemical and polymer markets, as I discuss in a new article for ICIS Chemical Business. Previously successful business models, based on the supply-driven principle, no longer work. As our new study, “Demand – the New Direction for Profit”, explains, companies now need to adopt demand-led strategies if they […]

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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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$1.8tn of stimulus later, Japan’s household spending unchanged

3 years of massive stimulus spending in Japan has had no impact on the problem it was supposed to solve.  This is highlighted by new government data on household spending for 2015, as the charts above confirm – they compare 2015 data with that for 2012, before Abenomics began: Spending was almost exactly the same […]

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IEA says market “awash with oil” – debunks bullish myths

Oil markets are the proverbial “canary in the coalmine”.  They are showing us what happens when the rose-tinted glasses provided by stimulus policy are removed.  Now markets have to return to their true role of price discovery, based on the fundamentals of supply and demand. This makes them very dangerous indeed.  Some large players in […]

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New Old 1950- Oct15a

Global GDP sees record fall in 2015 as world hits “demographic cliff”

Central bankers remain in Denial about the failure of their stimulus policies.  Yet new IMF data for global GDP shows GDP fell by $3.8tn in 2015 – the biggest fall on record – as the world hits the “demographic cliff”.  We have now seen 2 record falls in 6 years, as the previous record was $3.3tn […]

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Oil hits $30/bbl – and suddenly, analysts forecast lower prices

Yesterday, oil prices reached my long-held $30/bbl forecast level.  And suddenly, it seems, all the leading analysts have begun to forecast lower oil prices.  As Reuters reported: “Adjusting to the price rout, analysts have been shifting their price outlooks downward, with Barclays, Macquarie, Bank of America Merrill Lynch, Standard Chartered and Societe Generale all cutting […]

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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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Great Unwinding sees oil fall 65%; US$ rise 22%; US 10-year rates rise 25%

The Great Unwinding of policymaker stimulus was the major issue in financial markets in 2015.  And it is set to have even greater impact in 2016 once Phase 3 begins.  The chart above highlights the astonishing changes that have taken place since the Unwinding began in mid-August 2014; Phase 1 has so far seen Brent […]

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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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