Monthly Archives:

March 2010

It’s hard to get anyone to make a bear case for EM, so I’m going to try

The EM story is a strong one – in sharp contrast to the developed world, EM counties tend to have favourable sovereign/consumer debt dynamics, current account surpluses, high savings rates (implying scope for a pick up in consumer demand) and strong demographics.  Continued globalisation and liberalisation should be to the advantage of these counties.  Reflecting these opportunities, US mutual …

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To target low inflation or to target high inflation: that is the question

Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous inflation,
Or to take arms against a sea of inflation expectations,
And by opposing end them?

Never has Shakespeare been so crudely adapted, but I am going somewhere with this so bear with me. There is an interesting debate currently taking place amongst economists regarding the subject of inflation. On one side we ha…

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Don’t worry about Peak Oil – fusion is coming

Never get too gloomy about the prospects for mankind.  We’re good at stuff.  Whilst most of us were wasting our lives in economics lectures and going to Happy Mondays concerts, the geeks were out there saving the future.  Of course we’re going to run out of fossil fuels at some stage this century (the Peak Oil theory suggests that we’ve already gone past the hump of maximum production of oil) b…

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Football promotions, Buffett and the IMF World Cup

With the latest Beckham injury hitting both the front and back pages of our national newspapers, the FIFA Football World Cup will soon rival talk of elections and budgets for headlines. We are about to be bombarded with messages from numerous corporations eager to use the tournament to expand their profile within the consumer psyche.

Apart from the usual car, razor and fast food companies vying…

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The lesser-spotted five pound note, and some other stuff

The Bank of England is trying to boost the number of £5 notes in circulation – their chief cashier Andrew Bailey (whose signature is on every new banknote) said “our evidence suggests that the public wants more £5 notes”.  The general public are demanding more of the lowest denomination banknote?  On our desk we have some Reserve Bank of Zimbabwe One Hundred Billion Dollar notes, and, from a tr…

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UK inflation – upward pressure in the short term (though we’re still comfortable longer term)

Inflation rates, at least in the non-emerging markets, remain low.  US core inflation (CPI less food and energy) was negative in January, the first month on month decline since December 1982.  Preliminary German CPI in February was +0.3% year on year.   Japan hasn’t recorded a positive year on year inflation rate since January 2009.

Things seem different in the UK.  The annual UK inflation rate…

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Bubbles down under

Having just returned from a couple of weeks in Australia for a friend’s wedding (all the best to the happy couple) I thought it might be worthwhile writing a note on what looks to me to be a bubble in the Australian property market.

On my first night out in Sydney I was fortunate enough to get chatting to a couple of the locals who were out celebrating, one of them having just completed the pur…

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