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| 30-03-2010 | Stock Market |
Everyone loves a list, especially a list of the world’s plutocrats. This year, US fat cats have fallen behind. To the victor, go the spoils. Back in 2007, the last surge in emerging market stocks before the credit crisis briefly made Carlos Slim, the Mexican telecom magnate, the richest man. Then the crisis supervened. Emerging markets sold ... More »Slim’s fat pickings |
| 23-03-2010 | Currencies |
As the Greek crisis nears some resolution, the question on everyone’s mind is whether a sterling crisis is next on the cards. After all, with high deficit countries in investors’ sights, the pound has fallen to a nine-month low against the dollar and a six-week low against the euro, even as Greece descends into national strikes. A cris... More »Darling and a Greek tragedy |
| 16-03-2010 | Stock Market |
The global stock rally is one-year old. World stock markets closed at their low for the crisis 12 months ago on March 9. The rally that then started is still intact. The FTSE All-World index is up 75% in dollars, no significant market is down and big emerging markets have had huge gains—more than 160% for Russia and Indonesia. The S&P 500... More »Happy birthday, global stock rally |
| 11-03-2010 | World Economy |
Greece’s Cabinet on March 3 approved a fresh austerity package that includes an immediate freeze on pensions, further salary cuts for public sector workers and a sharp increase in the value added tax. Greek finance minister George Papaconstantinou has announced measures aimed at raising an additional 4.8bn euro this year to achieve the count... More »The imbalance in Europe |
| 04-03-2010 | Stock Market |
World stocks have picked themselves up in the past two weeks and the US Federal Reserve’s Ben Bernanke helped them on their way on February 25 by studiously declining to stoke speculation about imminent rises in interest rates. The sharp sell-off that started in January begins to look like a correction and nothing more. Continued gains in the... More »Will the US lead stock rally in 2010? |
| 27-02-2010 | Stock Market |
In the parlance of Jesse Livermore, the famous Wall Street trader, the path of least resistance for the stock market is higher, yet investor resistance to stocks as evidenced by what people actually do with their money remains subservient to events such as the Central Budget and monetary policy. So, it’s a good thing that Budget 2010 is extr... More »What we saw on Friday was more than a relief rally |
| 23-02-2010 | Stock Market |
Bernanke has increased the US discount rate from 0.5% to 0.75%. At the same time, a Fed survey of senior lending officers suggests the credit crunch that triggered the crisis is easing US EQUITIES recorded their first successive weekly gains since late December on Friday, February 19 as a discount rate hike by the Fed helped reinforce hopes that t... More »Fed move won't hurt stock rally |
| 18-02-2010 | Stock Market |
Markets tend to move like a pendulum from risktaking to risk aversion and back. If 2009 was about taking risk, this year so far has been about shedding it. No one said 2010 was going to be easy. Leading stock indices have fallen 8-9% from their peak as investors zeroed in on threats from fiscal, regulatory and monetary tightening. The threats are r... More »Return on risk |
| 12-02-2010 | Stock Market |
A look at history shows that a strong rebound in stock markets is not unusual and excellent returns are available to those who survive rough patches. Since 1871, the three worst ten-year returns for stocks (here I am taking the S&P 500 as it is the index for which most data is available) have ended in the years 1974, 1920, and 1978. These were ... More »Why global stocks will rebound - II |
| 11-02-2010 | Stock Market |
Just a fortnight’s correction and market pundits are already questioning whether the last 10 months’ stock market rally has run out of steam. Just as the Pacific Rim led world markets out of their slump at the end of 2008, so they are now leading the first true correction since the relief rally took hold last year. On January 27, Hong K... More »Why global stocks will rebound - I |
| 02-02-2010 | Commodities |
Copper has enjoyed a spectacular run. In 2009, as it emerged out of the stock-panic-induced commodities price crash, it rocketed 153.2% higher! Over the same span, the flagship CCI commodities index only rallied 32.1%. And gold, which has captivated traders in recent months, was only up 24.3% in 2009. Copper even eclipsed 2009’s massive 86.3... More »Copper outperforms gold, oil |
| 29-01-2010 | World Economy |
Climate change, or global warming, is the most controversial topic in the world today, and the debate shows no signs of calming down. Climate change scientists have become embroiled in a fresh controversy over a claim that Himalayan glaciers could disappear by 2035. The claim was contained in a wide-ranging report produced in 2007 by the Intergov... More »Our world was hotter 1,000 years ago |
| 22-01-2010 | Commodities |
In hindsight, it is shocking how easily almost everyone forgot the laws of supply and demand when it came to the world’s most important commodity. A half century ago, oil was so plentiful that prices fell to their lowest-ever levels (adjusted for inflation). A complacent West was exposed to the unsheathing of the ‘energy weapon’ ... More »Some things have gotta give - IV |
| 21-01-2010 | Commodities |
Oil prices have finally broken the $60-74 a barrel range that we have seen since the beginning of June and WTI oil is now trading at approximately $76 a barrel. The Chinese dragon is also blazing a trail under the crude oil market. After sliding to a five-year low of under $33 a barrel in December 2008, oil prices staged a steady climb upward to $... More »Some things have gotta give - III |
| 20-01-2010 | Commodities |
The People’s Bank of China (PBoC) ordered its banks to power a V-shaped recovery through an explosion of credit—a record CNY 10 trillion ($1.5 trillion) in new loans, or double the 2008 total. Roughly a quarter of the new loans were channelled into the Shanghai red-chip stocks and property markets, designed to inflate their values. Th... More »Some things have gotta give - II |
| 19-01-2010 | Commodities |
Last Wednesday, copper stocks on the benchmark London Metal Exchange stood at 517,175 tonne, up almost 52% from the same period last year, while nickel inventories were almost double at 159,000 tonne. Similarly, stocks of zinc, aluminium, lead and tin were all at their multi-month highs, a fact that would remind investors that despite the current... More »Base metal prices to see sharper spikes in 2010 |
| 19-01-2010 | Commodities |
Commodity prices have rebounded despite high inventories caused by weak demand during the recession. This price impetus came from a perception that the worst of the global recession was over. Rising demand from an expected global recovery will require extra capacity in many commodity sectors. Commodity prices were surprisingly buoyant in 2009, and... More »Some things have gotta give - I |
| 14-01-2010 | Behavioral Economics |
It is in America’s interest to let the US dollar grow weaker. If the dollar strengthens, the US will have more unemployment because its goods will become more expensive and it will export less. US deficit will also increase with a strong-dollar policy. The bailouts for the rich are killing the economy. Why is a weaker dollar a boon (in disg... More »The bulls are in front - II |
| 13-01-2010 | Behavioral Economics |
Most analysis of trends in individual stock markets tends to suffer from home bias, ignoring signals from the world’s biggest investor. I try to decipher signals emanating from the US and what they mean for world stock markets. The Indian government is facing a huge fiscal deficit. To bridge this, it will make every effort to bring out a se... More »The bulls are in front - I |
| 05-01-2010 | Behavioral Economics |
Early in 2009, supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather. Meanwhile, China and other Asian exporters, in an effort to preserve economic growth, were unleashing dom... More »Food for thought - II |
| 04-01-2010 | Behavioral Economics |
Almost unnoticed, agricultural commodities prices have returned to levels last seen at the start of the 2007-08 food crisis, prompting concerns about a fresh rise in food costs. The prices of key soft commodities—including tea, cocoa and sugar—have jumped to multi-decade highs, boosted by supply shortages and robust demand. The rises a... More »Food for thought - I |
| 29-12-2009 | Stock Market |
US stocks were the worst asset class over the past decade with an abysmal 0.1% 10-year annualised total return, the worst performance in 200 years. US stocks provided lower returns than cash while emerging market stocks returned over 10% and commodities over 7%. Wall Street is on track to achieve its first annual advance in two years after stagin... More »Taking stock of the 'lost decade' |
| 22-12-2009 | World Economy |
Greece’s bond and stock markets have fallen sharply in the past few weeks amid fears for its banks and economy, as the European Central Bank (ECB) prepares to wind down emergency funding for the Eurozone financial system. The volatility in financial markets in Greece, one of the weakest Eurozone economies, is an early warning of potential p... More »After Dubai, will Greece be next? |
| 16-12-2009 | Stock Market |
After an initial shock, conventional wisdom is downplaying Dubai’s mishaps. Shukran, Abu Dhabi, thank you. Dubai’s wealthier neighbour will, after all, bankroll the emirate’s largest state-owned conglomerate and stave off default. The scale of the support proffered to Dubai is huge—it has received some £25bn from Abu ... More »Shukran Abu Dhabi, but Dubai is not just sandstorm in a teacup |
| 08-12-2009 | Currencies |
The current controlled exchange rate of the Chinese yuan/renminbi vis-à-vis the dollar has left the yuan undervalued in terms of purchasing power parity. The IMF has estimated that although the official exchange rate is Y6.8 to $1, it takes just Y3.8 to buy a dollar’s worth of goods. If the yuan were to rise to this level, investments... More »Let the renminbi rise |
| 01-12-2009 | Commodities |
If any commodity can be said to be larger than life, it is surely gold. Over the last five years, gold has clearly out-performed equities. Gold made record high at $1,193/ounce on November 25. It has gained 16% this month, the strongest in a decade. Sri Lanka has bought 10 tonnes of gold from the International Monetary Fund for $375m, confirming... More »We still can't get it off the vending machine |
| 24-11-2009 | Stock Market |
It was 30 years ago that the world first chortled at the scene in The Graduate in which a smug Los Angeles businessman takes aside the baby-faced Dustin Hoffman and declares, “I just want to say one word to you—just one word—‘plastic’” To sneer at all things plastic was to offer an instant definition of oneself ... More »Just one word -- plastic |
| 18-11-2009 | Commodities |
From Seoul to San Francisco, manufacturing sentiment has recovered quickly from the sudden shock of the global recession last year, when world trade stopped dead and unsold stock piled up in warehouses across the world. Around the world, manufacturers are reporting rising output, falling stocks of finished goods and are encouraging new orders as ... More »Factoring in the factory |
| 11-11-2009 | Stock Market |
Warren Buffett’s recent planned $27 billion acquisition of Burlington Northern Santa Fe has been described as an “all-in wager on the economic future of the US”. If the best expression of the future of the US economy is a railway operator dating back to the mid-1800s, then Mr Buffett’s (it is hard to contest Mr Buffett&rsqu... More »Are markets all over irrational again? |
| 14-12-2008 | Currencies |
In his Dickensian tale of the 1980s Wall Street excess, The Bonfire of the Vanities, Tom Wolfe described his bond-trading protagonist Sherman McCoy as a master of the universe. The following decade, James Carville, Bill Clinton's political advisor, said, “When I come back, I want to come back as the bond market because then you can intim... More »The message of 'negative government securities yields' |
