Financial Foot In Mouth

Now The Carnival Is Over

2013-10-03T06:20:39Z

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).

Sterling To Take A Pounding

2013-10-02T15:10:38Z

Around 7 weeks ago in The Daily Telegraph, Morgan Stanley`s head of foreign exchange strategy, Hans Redeker, was reported as speculating that the pound would weaken substantially in the months ahead, as policy-makers affirmed commitments to keep interest rates at record lows.

More specifically, Morgan Stanley predicted that sterling would fall more than 5% from its then current value of $1.56 to $1.48 within three months.

In the event, the pound stands today at $1.622 – i.e. up 4% – and will need a serious volte-face over the next few weeks if we are to avoid seeing Hans off with his forecast.

Tell That To Cyprus!

2013-03-22T16:58:21Z

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.”

Close, But No Cigar.

2013-03-22T16:42:54Z

Mr Hargreave`s comments came after a good stock market rally had taken the FTSE 100 to 5795.73 towards the end of November.

Despite his enthusiasm, the index ran out of a bit of steam and limped over the line at only 5897.81.

Inflationary Pressures Will Not Reassert Themselves In The Short Term

2013-03-22T17:05:02Z

Probably a couple of predictions to keep an eye on.

Leger Up The Garden Path?

2012-10-22T09:35:54Z

Back at the end of April this year, Brian Dennehy , the managing director of Dennehy Weller, a leading IFA which has the ear of many a quality newspaper, held court with his market views.

According to this organisation, there was an element of déjà-vu about market conditions at that time, supporting the compelling technical reasons to ditch your equity holdings and head for the hills.

For those of us who are not au fait with the St Leger method (steady now), this involves selling out of risk exposure on 1 May and buying it back on the second Saturday of September – apparently this according to Trustnet, “…could work even more effectively in 2012 than it did over the last two years”. You see, markets fall much harder in the summer if there are setbacks, since stocks tend to be on higher price-to–earnings ratios following a strong run in the first quarter.

This sound brilliant – where do I sign?

For those who are interested, the FTSE 100 stood at 5777.11 at the end of April and, by the second Saturday of September had plummeted to an increase of 1.45%, while the IMA UK Equity Income sector made a gain of 4.33%.

Aye well – let`s hope that Dennehy Weller clients didn`t miss out on too may dividend payments when they were out of the market.

Comment/Submission By Mike Harriss, Wed. 17 October 2012

Quote by:	Brian Dennehy
Source:	Daily Telegraph
Quote made on:	MARCH 1ST 2012
The Quote:	Brian Dennehy of independent financial advisers (IFAs) Dennehy Weller commented: Yet again the ˜safe haven” myth of gold has exploded. It went down during intraday trading by about $100. This doesn`t mean the bull market has ended. It just means that when you buy gold you must do so with your eyes open; it is a highly volatile fringe asset. Our technical analysis suggests one of two possibilities. That the bull run is over and the price will eventually work its way down into the $700 to $1,000 range or one final high lies just ahead before that large correction towards $1,000 will begin.”
Submitted By:	Mike Harriss
Email:

Lord Lawson`s Son On Lord Turner

2012-08-14T12:07:14Z

It seems possible that Dominic Lawson does not consider Lord Adair Turner to be his favoured candidate to replace Sir Mervyn King at the BoE.

In addition to the above, Mr Lawson went on to say: “Above all, we should not forget Turner`s obsessive proselytising for British membership of the euro while he was Director-General of the CBI. Given that the euro can be saved only by what Turner at the time described as the widely-held fallacy that the single currency requires a large central budget in Brussels, one might expect some humility: but that is not his style – and I doubt he sees the incongruity in applying for the job of printing billions of a currency he campaigned to abolish.”

Remind me not to get on the wrong side of Dominic Lawson.

Silver Tongued?

2012-07-26T12:00:06Z

Opining that, “silver was quite volatile in 2011, but we are now optimistic it will go through a period of consolidation”, Ms. Markova lucidly went on to make a strong case for the out-performance of silver over gold in the short-term.

Back in March this year, the price of silver stood at $32.14, whilst that of gold was $1,652.

At the time of writing, silver has slumped to $26.96 per ounce (down a whopping 16.12%), whilst gold has fallen somewhat less to $1575.30 (down 4.64%).

Could have gone either way, I guess.

Growth and Enterprise

2012-07-08T10:15:49Z

Vince Cable, commenting on Letwin`s proposals, said he also favoured light-touch regulation for markets, “…so that growth and enterprise are not stifled”. He returned to this theme in 2006, in a speech to the Association of Foreign Bankers` spring luncheon, warning of the dangers of excessive regulation of the City and favouring “a lighter touch”.

” Vince`s coalition colleague, Mark Hoban, does not appear to be so concerned about the perils of excessive regulation. In fact, addressing Parliament on 12 December 2011, he blamed the light touch approach of the previous government and spoke of the `gross failures’ of the regulatory regime.”

Rein Back the Financial Services Authority

2012-07-08T10:13:37Z

In July 2004, Oliver Letwin stated that an incoming Conservative government would abolish or rein back the Financial Services Authority (FSA) because of its “Intrusive regulatory regime”, opining that the FSA was, “increasingly a tool of the Treasury” which threatened to squeeze the life out of the City by over-regulating it.

It is interesting that, only a few short years later, light touch regulation is being seen as one of the primary reasons for our current economic woes. Indeed, the long-awaited report into the failure of the Royal Bank of Scotland was published in December 2011 and, principal among its causes, were `light touch regulation and a catalogue of financial errors’ (Daily Mail). Populist statements, either in government or opposition often come back to haunt politicians.