Helping you navigate the new normal
Blog readers often travel a lot. And they certainly use WiFi. So here’s a question: Q. Do you ever remember using a WiFi service called Gowex? A. Lots of puzzled looks in response Q. Not sure? You think it might be vaguely familiar, but maybe not. Well this is what the company’s website says: “Your […]
The blog’s new Research Note in the ‘Your Compass on China’ series highlights the way that China’s commodity imports have been used to finance its housing bubble. This is clearly a shock for investors, who have till now believed the imports were a sign of its superior economic policies and long-term growth prospects. The Qingdao probe could […]
A year ago, the blog suggested that financial markets were reaching their most dangerous ‘melt-up’ stage, driven by investor complacency about the ability of central banks to protect them from any downturn. This analysis was confirmed in November, when absurdly high prices were paid for works of modern art, smashing previous records. Gillian Tett of the Financial Times (another of […]
A new article by an IMF economist makes the point that in April 2008, not a single one of the mainstream economic forecasts covered by ‘Consensus Economics’ was forecasting a recession in 2009. The IMF itself expected growth to continue, as did the World Bank and the Organisation for Economic Co-Operation and Development. Even by […]
Its now nearly 2 years since the head of the European Central Bank (ECB) said he “was ready to do whatever it takes” to save the euro, and brought down interest rates in the weakest PIIGS economies (Portugal, Ireland, Italy, Greece, Spain). As the chart shows, this statement had a remarkable effect in financial markets: Interest rates today […]
Sentiment, as measured by the IeC Boom/Gloom Index has weakened considerably over the past 3 months as the chart shows: It peaked at 12 in November, hitting its highest level since before the 2008 Crisis began (blue column) It then drifted lower in December, before rallying back to 9 in the New Year But now […]
Whisper it quietly, so as not to disturb policymakers’ dreams. But the charts above from the Financial Times confirm, as if proof were needed, that their policies of the past 5 years haven’t worked. The charts compare trends in economic growth in the world’s two largest economies, the Eurozone and the USA. As the arrows indicate, both are […]