The Presidential Cycle is now over. Instead, worries about the recession and the US debt ceiling talks are moving centre-stage. But Asian currency markets are sending a warning signal. A rising US dollar and US interest rates, and a falling yen and yuan, could soon raise the risks of a major Asian debt crisis.
Chemicals and the Economy
Chemical industry results confirm major recession is underway
Chemicals are telling us that all the world’s major economies are in a major downturn. And the downturn is starting to accelerate as companies cut back spending and fire people. Real estate, autos and other key areas are already suffering along with the banking system.
Stock markets on the brink as the end of ‘Presidential Cycle’ support looms
It seems highly likely that the Rebound rally is ending, and the market Downtrend is about to resume. Time spent on researching the paradigm shifts that will take us into the New Normal will likely prove very profitable for the future
Stimulus programmes have created a major debt crisis, as the money cannot be repaid
The problem is that most economic models were originally built in the 1960s/70s, when people still died around pension age, and are out-of-date
Its ‘Minsky Moment’ time again as investors start to worry about return of capital
“You can’t run the most reckless monetary and fiscal experiment in history without the bill eventually coming due. The first invoice arrived as inflation. The second has come as a financial panic, with economic damage that may not end with Silicon Valley Bank.”
Today’s financial crisis confirms that “failing to plan, equals planning to fail”
Companies and investors need to invest time now on having a genuine debate about the risks ahead. The regulatory failures of the past few days highlight what can quickly go wrong, if one hasn’t war-gamed out potential risks. As the saying goes, “Failing to plan, equals planning to fail”.
Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales
The smartphone market has now been in decline for 5 years. And whilst the Fed would clearly love to get stocks racing to the moon again, history suggests that Apple’s CFO is likely to be right when talking about the importance of cost control for the future.
Japan’s premier warns of “social dysfunction” as ageing populations challenge Western and Chinese economies
Japan has wasted trillions of yen with its failed stimulus programmes. Had it devoted even a tenth of this money to developing a proper Retraining programme for people in their 50s/60s, it wouldn’t now be facing a major debt and currency crisis. The rest of the Western world needs to rapidly learn from its mistake.
The end of stimulus, and the growing importance of demographics, means the economy could face a major downturn
‘Business as usual’ has been a great strategy for the past 40 years. But nothing lasts forever. It has now – like the central banks’ stimulus policies – hit the inevitable brick wall.
Chart of the Year – Our Sentiment Index proved a great guide to the S&P 500 in 2022
Nobody knows how markets will develop. But past performance is the best guide that we have. This is why our Sentiment Index is my Chart of the year for 2022.
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