Helping you navigate the new normal
Yesterday, senior EU negotiators warned that “the chances of Britain crashing out of the EU without a new (trade) deal were now “over 50%””. Clearly, therefore, the UK’s preparations are not going well. Instead of building trust, the UK’s Brexit Secretary, David Davis, seems to think that threats – such as promising “the row of […]
Europe is heading in to the Great Unknown, as Monday’s post highlighted. The UK, The Netherlands and France are not the only political uncertainties that we face. Elections are also due in Italy and in Germany. Italian elections. After premier Renzi’s referendum defeat last year, it seems like that Italy will hold elections this year, […]
Next month sees the start of a process that could change all our lives. Whether we live in Europe, or outside it, the political decisions about to be made have the potential to impact every country in the world – for better or worse. And yet, nobody has yet begun to put together the various […]
2016 saw the Great Reckoning for the failure of stimulus policies begin to impact companies and markets. The blog’s readership has increased significantly as a a result, as shown in the chart above, with its visits now totaling nearly 500k. Its readership includes 197 countries and over 11k cities. Readers also remain very loyal, with […]
Italy was one of the 6 founding members of the European Union (EU) in 1957, along with France, the Netherlands, W Germany, Belgium and Luxembourg. Its referendum next month will therefore be a critical test of whether the Eurozone and EU can survive the pressure from the Populists. If the Populists win, then the future […]
We are approaching the 2nd anniversary of the Great Unwinding of policymaker stimulus, which began in August 2014: The initial movement was very sharp, with Brent falling 53% by January and the US$ rising 23% by March Oil then saw an initial correction – with Brent recovering to being 37% down by May during the “oil […]
40 years ago, the vast majority of the British people were in favour of joining the European Economic Community. 67% voted in favour, in the 1975 referendum to confirm the UK’s entry. Virtually all mainstream politicians were in support, with only the left-wing of the Labour Party strongly anti on the grounds that it was […]
Slowly, but surely, a UK vote to leave the European Union is becoming more likely. In any referendum, the Yes campaign (in this case called Remain) have to argue a positive case. But this is not happening in the UK – and the vote is less than 3 months away. Unsurprisingly, therefore, as the poll […]
Most traders prefer to be with the crowd – then, at least, they can’t be personally blamed if things go wrong. Instead, they can claim that “nobody could have seen the change coming”. So as we approach year-end, many traders are becoming very nervous as the Great Unwinding of policymaker stimulus means that markets start […]
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 […]
“We should not forget the historic nature of what is at stake. “Its about whether a country can leave the euro zone and what that means for the future of an incomplete and flawed European Monetary Union. “Its about whether there may soon be a failed state in southeastern Europe with all the geopolitical consequences […]
This morning, Greece introduced capital controls. People can only withdraw €60/day ($65) from their bank accounts. The government has also called a referendum on Sunday, after Eurozone talks on a new bailout package collapsed. The key issue is that Greece will never be able to repay its debts. These are currently estimated at €322bn ($365bn) […]
More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]
We all learnt one crucial lesson from Syriza’s victory in the Greek election last week – voters can halt the European Central Bank (ECB). Or in other words, protest coalitions can trump elite consensus. In places like Spain and France, this effect may not work through immediately, but it is being absorbed. Thus Greece and the Eurozone crisis […]
The world is about to be hit by a demand shock equivalent to 1973′s supply shock. Yet, astonishingly, most commentators remain so focused on central bank activity, that they have completely missed what is happening. Here’s how it is playing out. You may remember the ‘The pH Report‘ forecast in early December that: “Oil prices […]
We are now two-thirds of the way through 2014, and critical decisions are looming for companies and investors. Do they give central banks one more chance to stimulate growth? And are they prepared to trust policymakers to avoid a major geopolitical crisis in the Ukraine? Or do they decide that ‘enough is enough’, and that […]
The good news about EU auto sales, as the chart shows, is that they have stabilised above last year’s record low levels: Sales in the January – May period were up 7% (red square) versus 2013 (green line) at 5.4 million Sales in May itself were up 5% versus 2013 at 1.1m Sales have risen […]
A political earthquake hit Europe in the European Union elections on Sunday night: For the first time since the War, mainstream parties were beaten in major countries In France, the National Front won 25% of the vote, with conservatives 21% and ruling socialist party only 14% In the UK, the Independence Party (UKIP) won 28%, […]
So this is as good as it gets in 2013. That seems to be the sad conclusion from analysis of Q3 operating rate (OR%) data for Europe’s crackers. Actual Q3 OR% inched up to 81%, which was slightly better than 2012′s 80% rate and 2009′s 79% rate. But its a very long way from the […]
The Eurozone crisis has been quiet since the summer of 2012, as the markets waited for the German election. But now this has occurred, it is unlikely that the problem can continue to be ignored. It is easy to forget the drama of May 2012, when the blog correctly forecast a crisis was about to occur in […]
The red line in the above chart from the Financial Times shows how far Eurozone growth has diverged since 2008 from the previous SuperCycle trend (in blue).
Unfortunately, most companies failed to spot what might happen as a result of …
Back in April, the blog suggested that capital controls might remain for rather longer in Cyprus than the “few days or weeks” suggested by the central bank. And a month later, the bank was still unrealistically claiming they would be lifted “as soon as possible”. Today, the blog’s own view that they could be in place “for […]
The world’s media are increasingly aware that economic growth is being impacted by major demographic change. Thus the leading UK weekly magazine, the New Statesman, has published this article by the blog last week. It looks at the challenges facing the UK in the next few months. These are, of course, the same challenges that face all the major economies. “The [UK […]
Newton’s 3rd Law of Motion states, “To every action there is always an equal and opposite reaction“. Thus the forces of two bodies on each other are always equal and are directed in opposite directions.
Policymakers forgot this Law in …
Governments and central banks never spot recessions till it is too late. Thus after the 2008 Crisis, for example, it was recognised that only a few independent experts such as the blog had forewarned of the danger. Today’s situation seems potentially to be as serious as in 2008. Therefore as promised yesterday, the blog has decided to present its own analysis of the […]
My words fly up, my thoughts remain below:
Words without thoughts never to heaven go
These lines from Shakespeare’s most famous play, Hamlet, aptly describe the critical issue in the Eurozone crisis.
This issue is very simple, as the blog discussed …
Last week saw the 20th EU ‘Crisis Summit’. Like the previous 19, it achieved little. Yet everyone at the meeting knew what had to be agreed:
• A banking union which operates across national borders
• The issuing of joint Eurozone bonds, guarante…
Financial markets are telling us something important about the outlook.
Profitable themes over the past month have been expectations of weakness in crude oil prices, in China’s economy, and in the financial sector; plus positive views on long-dated go…
For 25 years, Western policymakers coasted to electoral success on the back of an economic Supercycle. The BabyBoomers’ arrival in the Wealth Creator 25 – 54 age group meant there was just 16 months of recession between 1982-2007. Politics and policy…
The blog’s many friends in the petchem industry in S Europe have become more frequent visitors to London in recent months. Often, they are in the process of buying flats or houses. As one long-standing friend commented, “would you want to leave your …
Last December, the blog raised the question of how a country like Greece could actually leave the Eurozone. Many people believe this is inevitable. But how would the practical issues be solved?
Now Wolfgang Münchau has taken up the challenge in the…
Yesterday saw the world’s largest ever sovereign debt default, when Greece finally carried through a €206bn ($272bn) restructuring. Yet only the eurozone leaders believe this will solve Greece’s problems and those of the other PIIGS (Portugal, Irela…
Mahathir Mohamad is one of the Grand Old Men of the Asian political establishment. He was Malaysian premier from 1981 – 2003, and led its rapid modernisation and economic growth. Over the period, which included the Asian financial crisis, the former …
Human beings go through a number of stages when confronted by a major change such as today’s Crisis. As first described by Elisabeth Kübler Ross, the process starts with:
• Denial that any change is taking place
• Then Anger at the implications o…
There is much discussion of countries such as Greece being likely to leave the Eurozone.
Some even believe it is inevitable.
But on a practical basis, how would it happen?
This is a question that has been bothering the blog for some months.
…
Europe is at the eye of the storm when it comes to energy pricing. This is the last thing required by its struggling economy.
As the chart shows, Brent in euros (green line, RHS) is now back at the same level as June 2008, whereas WTI is 35% cheaper …
