Tag Archives | interest rates

Recession the base case scenario for 2017

It is hard to be optimistic about the outlook for 2017. The good news is that policymakers are finally giving up on the idea that stimulus can somehow return us to the growth levels seen when the Baby Boomers were young.  As the Bank of England note in a new Report:   “Economic theory suggests that a […]

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Chart of the Year: US$, 10-year US interest rates begin to rise

Last year it was the oil price fall.  This year, there is no doubt that the US dollar has taken centre stage, alongside the major rise underway in benchmark 10-year interest rates.  As 2016’s Chart of the Year shows:   The US$ Index (black) has risen 12% since May against other major currencies (euro, yen, […]

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2016’s Word of the Year: “Impossible”

Nobody likes change, particularly on the scale that is taking place all around us today.  Understandably, we prefer to live in a state of Denial.  This is why “Impossible” is my Word of the Year for 2016. The main feature of the word is that it is a statement, and a very clear statement.  People […]

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Interest rate and US$ surge mark start of the Great Reckoning

The bond market vigilantes are back.  And they clearly don’t like what they are seeing.  That is the clear message from the charts above, showing movements in 10 year government bond interest rates for the major economies, plus their exchange rate against the US$ and the value of the US$ Index:   As I warned […]

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Budgeting for the Great Reckoning

One thing is certain about the 2017 – 2019 Budget period.  “Business as usual” is the least likely Scenario to occur. The IMF chart above highlights the key issue: for the past 5 years, all its forecasts of a return to “normal” levels of growth have proved over-optimistic:   Back in 2011, the IMF was […]

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10yr Treasury Sept16

US 10-Year interest rates suggest Great Reckoning may be near

 “History doesn’t repeat itself, but it often rhymes“, Mark Twain Bob Farrell of Merrill Lynch was rightly considered one of the leading Wall Street analysts in his day.  His 10 Rules are still an excellent guide for any investor.  Equally helpful is the simple checklist he developed, echoing Mark Twain’s insight, to help investors avoid […]

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Investors panic in “search for yield” as interest rates go negative

Its been a great few months for financial markets.  All the major markets have seen gains, as the chart shows – something that has happened only once before, since my half-yearly reviews began in March 2009: □   Long-term US Treasury bonds have gained, as long-term interest rates have been falling □   The 30-year bond […]

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US pensioners pay the price for Fed’s monetary policy failure

There was one bit of good news this week.  For the first time since the financial crisis began, a Governor of the US Federal Reserve acknowledged that today’s demographic changes are having a major impact on the US economy. John Williams, of the San Francisco Fed, argued that: “Shifting demographics….(mean that) interest rates are going […]

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Global demand slowdown hits chemical industry results

Its not been a great 6 months for the global chemical industry, and my usual quarterly survey of company results confirms the disappointment. The first half of the year is typically the strongest, for seasonal reasons, as companies come back to work after the Christmas holiday and prepare for the peak car-buying and construction periods […]

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Bank of England’s new stimulus policy creates bankruptcy risk for corporate pension funds

The Western BabyBoomers (born between 1946-70), have been one of the luckiest generations in history.  By and large, they have escaped the major wars that have plagued society down the ages.  They have also lived in a world where living standards and material wealth have made astonishing gains.  Equally priceless has been the rise in […]

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