Global interest rates have fallen dramatically over the past 25 years, as the chart shows for government 10-year bonds: UK rates peaked at 9% in 1995 and are now down at 1%: US rates peaked at 8% and are now at 2% German rates peaked at 8% and are now down to 0%: […]
Chemicals and the Economy
Investors ponder further shocks after North Korea jolt
Interviewed for this Reuters article, I suggest today’s low levels of market volatility could be “the calm before the storm” Saikat Chatterjee and Vikram Subhedar, AUGUST 11, 2017 / 5:06 PM LONDON (Reuters) – After this week’s war of words between the United States and North Korea triggered the biggest fall in global stocks since the U.S. presidential […]
London housing market hit by Brexit, China’s capital controls
London’s housing market was always going to have a difficult 2017. As I noted 2 years ago, developers were planning 54,000 new luxury homes at prices of £1m+ ($1.25m) in central London, which would mainly start to flood onto the market this year. They weren’t bothered by the fact that only 3900 homes were sold […]
Chart of the Year: US$, 10-year US interest rates begin to rise
Last year it was the oil price fall. This year, there is no doubt that the US dollar has taken centre stage, alongside the major rise underway in benchmark 10-year interest rates. As 2016’s Chart of the Year shows: The US$ Index (black) has risen 12% since May against other major currencies (euro, yen, […]
London house prices start their collapse
London’s house market has been slowing for some time, as I noted last year. The issue is affordability. Artificially low interest rates make the monthly payment seem cheap. But the key question is whether your salary will allow you to repay the capital borrowed over time. Sadly, this has become increasingly impossible for many actual […]
S&P 500 volatility close to 43-year lows as uncertainty rises
Something very strange is happening in US stock markets, as the above chart highlights: It shows weekly (blue line) and average quarterly (red line) volatility in the US S&P 500 Index since 1928 Both are very close to 43-year lows, going back to September 1973, at 1.7% and 1.6% respectively This seems quite […]
Markets question central bank power as Great Reckoning nears
TIME magazine covers often capture the mood of a moment. And that was certainly true in February 1999, with their now famous cover picturing then US Federal Reserve Chairman, Alan Greenspan, under the heading “The Committee to SAVE the World“. In a further sign of the times, Greenspan was flanked by the US Treasury Secretary […]
Central banks defy slowing global economy by destroying markets’ power of price discovery
Markets have one main function in life – price discovery. If I want to buy, and you want to sell, the existence of a market allows us to discover the price at which the market will balance in terms of supply and demand. History, however, provides many examples of times when rulers decided they knew […]
US 10-Year interest rates suggest Great Reckoning may be near
“History doesn’t repeat itself, but it often rhymes“, Mark Twain Bob Farrell of Merrill Lynch was rightly considered one of the leading Wall Street analysts in his day. His 10 Rules are still an excellent guide for any investor. Equally helpful is the simple checklist he developed, echoing Mark Twain’s insight, to help investors avoid […]
6 impossible things not to believe about oil before breakfast
“Sometimes I’ve believed as many as six impossible things before breakfast.” Oil traders know how the Queen felt in Lewis Carroll’s famous book, Alice Through the Looking-Glass. The list of impossible things that they are being asked to believe grows almost by the day: Last week, prices jumped 4% on the basis that strong […]
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