Helping you navigate the new normal
Pity poor Janet Yellen, you might say. The head of the US Federal Reserve told the Senate this week that she had been “quite surprised” by the collapse of oil prices since mid-2014. And she added that the rise of the US$ was similarly “not something that we had expected” (you can see the testimony […]
“If only US GDP growth could remain negative in Q2, what a lot of money we could make”. You could almost hear the excited chatter in financial markets on Friday, as news spread that revised data showed the US economy had seen negative growth in Q1. This is yet another example of the upside-down world […]
Attention has rightly been focused on the collapse of oil prices over the past 6 months. These have further to fall, but the major part of the move must now be behind us. After all, Brent was at $104/bbl when I first forecast the move in mid-August, and closed at $56/bbl last night, so probably “only” has $20/bbl-$30/bbl further downside. […]
There has never been any fundamental reason for oil to trade at $100/bbl since 2011: There hasn’t been a single moment when a consumer failed to get the supplies they needed Inventories in the major markets such as the US have always been at very healthy levels And all the time, more and more production […]
In March 2007, the Financial Times kindly published a letter from me arguing that the US Federal Reserve seemed “to confuse being market-friendly with being friendly to markets“, and had forgotten “The famous dictum of William McChesney, the long-serving Fed chairman in the 1960s, that “the job of the Federal Reserve is to take away the punch […]
Last week the US Federal Reserve announced the second move in its so-called tapering process, and reduced its bond buying by another $10bn/month. But there was only a temporary repeat in stock markets of the enthusiastic response to its first reduction in December. We are thus about to test whether the blog’s theory of ‘two steps and a […]
Sometimes the blog’s mind goes back to its happy days in Houston, Texas, when it set up and ran ICI’s feedstock and petchems trading office. And it thinks through the factors that it would have considered when deciding whether to buy, sell or sit on the sidelines. The memory came back during last week’s lively ACS webinar, when […]
Western politicians have failed to take responsibility for managing the Crisis. And so, as the blog noted last week, policy is instead being made by unelected central bankers – principally Ben Bernanke at the US Federal Reserve, and Mario Draghi at th…
The above 2 charts show US jobs and car sales on a monthly basis, side by side. They cover the years 2008 – 12, and the combination provides a clear message about demand trends:
• The jobs total began to improve in 2011 (green line)
• They rose 2…
US subprime lending was the starting point for the economic crisis now spreading around the world. The blog believes a key cause was policymakers refusal to accept that the ageing of the BabyBoomers (those born between 1946-70) would cause a major cha…
The blog’s Boom, Gloom and the New Normal eBook highlights the impact of the ageing Western babyboomers on future demand patterns.
Yet central banks such as the US Federal Reserve and the European Central Bank believe demographics have nothing to do…
Alchemists have always claimed to be able to perform the impossible. The most common claim was that they could turn lead into gold.
In Europe, the European Central Bank has been trying the same trick. It claimed to turn near-worthless Greek bonds …
A recession is often defined as being when your neighbour loses their job. A depression is when you lose your job.
Latest industrial production data shows output is falling around the world. And US unemployment is rising again, with the wider measur…