Tag Archives | US Federal Reserve

“Debt-financed growth model has reached its limits”, admits German finance minister

Central bank policy-making is becoming more and more dysfunctional, as German Finance Minister Wolfgang Schäuble‘s comments highlighted on Friday: “The debt financed growth model has reached its limits.  It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy….and may have laid the foundation for the next crisis.” One clear sign […]

Continue Reading
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. […]

Continue Reading

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 […]

Continue Reading

US 10-year interest rates jump 23% as Fed debates 0.25% hike

Media hype over the potential for a 0.25% interest rate rise by the US Federal Reserve is well underway.  But as often happens these days, this is missing the bigger picture. The issue is simple: developments in China are far more important to the global economy than anything the Fed might, or might not, do […]

Continue Reading

Coppock, Farrell indicators suggest financial market downturn underway

They don’t ring bells to warn of financial market tops and bottoms.  But there are 2 very good substitutes in terms of the Farrell and Coppock Indicators, as the above chart for the UK stock market since 1973 shows: It is based on the Financial Times All-share Index (FTA), as the FTSE 100 only began […]

Continue Reading

Financial markets head towards chaos as Great Unwinding continues

Financial markets are slowly descending into chaos.  The process began in China over the summer, and has now started to impact Wall Street and other developed markets as the Great Unwinding of policymaker stimulus continues. The problem is that successful investment, whether in financial or chemical markets, requires the combination of A clear understanding of […]

Continue Reading

Markets need more cash from the Janet Yellen tooth fairy

Central banks have acted as the proverbial tooth fairy towards financial markets in recent years.  But they have not just left a small amount of money under the pillow when a child lost its first tooth.  Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]

Continue Reading
Question mark

Q2 results highlight continued uncertainty over outlook

The chemical industry continues to be the best leading indicator we have for the global economy. Whilst stock markets were continuing to move higher during H1, its depressed level of capacity utilisation was signalling that the economy was far more fragile than generally realised. Company results for Q2 reflect this concern. Of course some, tied […]

Continue Reading

Yellen offers hostage to fortune on US growth

Previous chairs of the US Federal Reserve had a poor record when it came to forecasting key events: Alan Greenspan, at the peak of the subprime housing bubble in 2005, published a detailed analysis that emphasised how house prices had never declined on a national basis Ben Bernanke, at the start of the financial crisis […]

Continue Reading

Fears of Austerity rise again, as Stimulus proves ineffective

Austerity is in the news again, as the Greek/Eurozone debt negotiations continue.  So it seems interesting to see how financial market sentiment has been moving with regard to the issues of austerity and stimulus.  The above chart is therefore modeled on the familiar IeC Boom/Gloom Index It shows the ratio of sentiment for Austerity versus […]

Continue Reading