5 years after the Crisis began, there still seems to be a worrying lack of accountability in the banking sector, even when things go wrong on an epic scale. Take JP Morgan Chase, for example: It lost $6.2bn in London last year, which its CEO Jamie Dimon initially called “a tempest in a teapot” It has now been […]
Chemicals and the Economy
Higher US interest rates will test housing market strength
The above chart will be familiar to readers of Boom, Gloom and the New Normal. It shows the way in which Japan’s interest rates (black line, bottom axis) have been a leading indicator for US interest rates (red line, top axis) since the stock market peaks of 1990 in Japan and 2000 in the USA. […]
A flap of a butterfly’s wings to freeze the UK economy
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 […]
Global interest rates surge as Newton’s 3rd Law continues to operate
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 their response to the 2008 financial Crisis. Instead they believed that cutting short-term interest rates in the major economies to zero, […]
UK bond yields return to historical levels
Are you worried about the future direction of interest rates, and what they may mean for your pension, your family and your company? Then the chart above, showing 300 years of UK government bond yields, may just be helpful. It will probably also surprise you, as it contradicts the opinions of most ‘expert commentators’. These […]
3rd London Olympics sees UK bond yields back at 1908 levels
This week marks the opening of the 3rd London Olympics. To celebrate, the blog today looks at developments in government bond yields since the 1st London Games in 1908. On Thursday, it will look at GDP per capita changes since the 2nd London Games in 1948. In 1908, UK interest rates were the benchmark for […]
Eurozone crisis gets worse, not better
Global bond investors have found a new worry. 10 year interest rates in Spain, the world’s 12th largest economy, have risen alarmingly in recent weeks. As the chart shows, they are now above 7% (blue column) compared to 4% when the blog first focused on the Eurozone crisis (red). 7% is a critical level, as […]
C is for Complexity
The blog’s series on the VUCA world today reaches C for Complexity. Interest rates are key to company profitability. They determine rates of return for new investments, and their affordability. They also have a major influence on consumer spending patterns. The debate over their future direction is just one example of current Complexity: • Financial […]
Germany in the firing line as Greek default nears
Interest rates are key to the direction of the global economy. But not in the way that was true during the 1982-2007 economic SuperCycle. Then, there was a global surplus of savings, due to the vast numbers of people in the Wealth Creating 25 – 54 age group. So interest rates reduced dramatically in most […]
Global financial markets at important crossroads
Stock markets around the world are at an important crossroads. The blog’s regular <a href="https://www.icis.com/chemicals-and-the-economy/2010/09/global-markets-decoupled-over.6 monthly review compares today’s market levels with their 2007/8 pre-Crisis peaks. And as can be seen, none have yet hit a new high. This is quite surprising, given the scale of the G20 and central bank stimulus/liquidity packages over the […]
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