It is now 13 years since I wrote the first post here, in June 2007. A lot has happened since then: There was the 2008 subprime crisis, forecast here and in the Financial Times – although sadly, few took advantage of the warning This led to the publication of ‘Boom, Gloom and the New Normal: How […]
Chemicals and the Economy
China’s property sector is at the epicentre of the crisis
A branch of Centaline Property Agency in Hong Kong © Bloomberg Indebted Chinese property developers threaten a domino effect on western credit markets , as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Second-order impacts are starting to appear as a result of China’s lockdowns. These are having […]
“They may ring their bells now, before long they will be wringing their hands”
The wisdom of Sir Robert Walpole, the UK’s first premier, seems the only possible response to this weekend’s headline from the Wall Street Journal. How can a National Emergency ever be the basis for a major rise in stock markets? Of course, we all know that stock markets have become addicted to stimulus. But the […]
Will stock markets see a Minsky Moment in 2020?
Few investors now remember the days when price discovery was thought to be the key role of stock markets. Instead, we know that prices are really now set by central banks, on the model of the Politburo in the old Soviet Union. How else can one explain the above chart? It shows the US S&P […]
Chart of the Decade – the Fed’s support for the S&P 500 will end with a debt crisis
Each year, there has been only one possible candidate for Chart of the Year. Last year it was the collapse of China’s shadow banking bubble; 2017 was Bitcoin’s stratospheric rise; 2016 the near-doubling in US 10-year interest rates; and 2015 the oil price fall. This year, the ‘Chart of the Decade’ is in a league […]
$50bn hole appears in New York financial markets – Fed is “looking into it”
Most people would quickly notice if $50 went missing from their purse or wallet. They would certainly notice if $50k suddenly disappeared from their bank account. But a fortnight ago, it took the New York Federal Reserve more than a day to notice that $50bn was missing from the money markets it was supposed to […]
China’s renminbi and the global ring of fire
China’s property bubble puts it at the epicentre of the ring of fire © Reuters China’s devaluation could be the trigger for an international debt crisis, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog August has often seen the start of major debt crises. The Latin American […]
Stock markets risk Wile E. Coyote fall despite Powell’s rush to support the S&P 500
How can companies and investors avoid losing money as the global economy goes into a China-led recession? That’s the key question as we enter 2019. We have reached a fork in the road: Since 2008, Western central bankers have focused on supporting stock markets But the bursting of China’s shadow banking bubble means this cannot continue for […]
Why everyone ignored my warnings ahead of the financial crisis
It’s 10 years since my forecast of a global financial crisis came true, as Lehman Brothers collapsed. I had warned of this consistently here in the blog, and in the Letters column of the Financial Times. But, of course, nobody wanted to listen whilst the party was going strong. As the FT’s world trade editor wrote […]
High-flying “story stocks” hit air pockets as credit finally tightens
“Nobody could ever have seen this coming” is the normal comment after sudden share price falls. And its been earning its money over the past week as “suddenly” share prices of some of the major “story stocks” on the US market have hit air pockets, as the chart shows: Facebook was the biggest “surprise”, falling […]
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