Financial Foot In Mouth » Rest of the World Predictions and Gaffes

Now The Carnival Is Over

admin — Thu, 03 Oct 2013 06:20:39 +0000

Just over a year ago, Dean Newman did a convincing piece for FE Trustnet in which he explained how the Brazilian government`s hefty stimulus package, announced on 15 August 2012, would create a boost to economic growth and make the country a more investable proposition.

Well, anyone taking this as a cue for investment would have been better off blowing their money on a jaunt to Rio.

Over the last year, Brazil has turned out to be one of the worst global stock market performers, the market price return of iShares MSCI Brazil Capped ETF having fallen by 12.86% during the most recent twelve month period.

One hopes that Brazil`s left of centre government turns things round before the Barmy Army descends on it to watch the World Cup next year (though we`re not necessarily forecasting that the England team will be there as well).

Tell That To Cyprus!

admin — Fri, 22 Mar 2013 16:58:05 +0000

Let`s hope that Mr Watson was correct when, just over four months ago, he thought that worries over an all-out default in Europe had finally disappeared, going on to say that; “the euro debt crisis is over, although the governance and unemployment/growth crisis has many years left to run.”

Angela`s Hashes

admin — Tue, 03 Jul 2012 17:02:23 +0000

…well, at least, not directly anyway. The ECB`s injection of 1 trillion euros of three year loans into European banks came in handy, though.

ADDITIONAL COMMENT – it might just be time for an update of this post, bearing in mind the report in last weekend`s “Financial Times” that “…taxpayers for all 17 eurozone countries, Germany foremost among them, will shoulder the burden of 100bn. euros in cash injections” and that “…the bail-out of Spain`s domestic banking sector, stuffed with bad real estate investments, will no longer be Madrid`s responsibility.”

I must be missing something here.

IMF – As Uncomfortable As MFI (But Still In Business)

admin — Thu, 07 Jun 2012 17:50:09 +0000

Well, you couldn`t really make it up. It can only be hoped that the IMF`s computer models have been re-modelled to accommodate a bit more scenario planning since 2006.

As the “Sunday Times” article went on to say, “Only a few years ago, Spain was a poster boy for European dynamism. Banks scrambled to lend. Even as the boom approached bust, the International Monetary Fund declared all was well.”

Nice work if you can get it.

At Last We Know, Then

admin — Tue, 29 May 2012 09:07:24 +0000

So there we have it. The Greeks are unlikely to be getting any cents out of Germany.

It`s fair to say we`ll all be watching that space pretty closely over the course of the next few weeks.

A Pole of Stability

admin — Wed, 09 May 2012 13:13:44 +0000

Did someone neglect to inform the hedge fund managers about this?

Diddier Drachma

admin — Wed, 09 May 2012 12:44:40 +0000

In case anyone has forgotten the five accession criteria which Greece had to meet before being accepted by the European Council in June 2000, these involved the inflation rate, the budget deficit, public debt, long term interest rates and the exchange rate. If the elastic was being stretched a bit some twelve years ago, its tensile stress must now be bordering on the unbearable.

Sometimes, however, it is too easy to generalise about a nation`s characteristics. It should not be forgotten that, according to Forbes, the Greek labour force works the second highest number of hours per annum among OECD countries, after South Korea.

“Those who are too smart to engage in politics are punished by being governed by those who are dumber”. (Plato)

Hardly A Wim-Win On The Good Ship Euro

admin — Sun, 29 Apr 2012 17:50:56 +0000

The capacity for single monetary policy to adapt to changing circumstances has indeed been brought into sharper focus in the light of recent events. For instance, the effect of adjusting Spanish wages may not be so relevant when approximately one in every four workers cannot currently obtain employment.

Spain`s Foreign Minister told state radio last week: “This is like the Titanic. If there`s a sinking here, even the first-class passengers drown”

Given that the richest “passengers” within the EU have an unfortunate reputation for securing the best vantage points on holiday, it is hoped that they will be able to do something more than re-arrange the deckchairs on this particular journey.

Nick Clegg – on the benefits of Euro membership

admin — Sat, 03 Mar 2012 16:41:52 +0000

It would be interesting to see what the worse export vehicle looked like (a Moskvitch?)

Herman Van Rompuy on the Eurozone

admin — Fri, 17 Feb 2012 10:39:23 +0000

On 15 February 2012, the BBC reported that the economies of Germany (-0.2%), Italy and the Netherlands all shrank in the last quarter of 2011. “Fourth quarter GDP numbers have shown a contraction in economic activity, prompting fears the region could be pushed into a recession.

Please define “urgently”.