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Careful with China

Global Economy, On the cover, Sin categoría
“The most scary thing is that even the Central government does not really know how large the size of the local government debt is”. – Hu Yifan

I mention it constantly. Massive debt accumulation generates greater fragility in the financial system. While global PMIs maintain their expansionary phase, we start to feel a certain level of deceleration. Fitch reduced its global growth estimates for both 2013-to +2.3% – and 2014-from +3.1% to +2.9% -, and the more cyclical companies that have posted results are cautious about the outlook for 2014. We should note that some economies are moving dangerously towards stagnation. Brazil , damaged by the populist policies of Rousseff , with soaring inflation, is poised to post virtually no growth in 2015 and India, with a growing current account deficit and high inflation in food prices, is a concern that I have mentioned before in this column.However, in between investor euphoria, the liquidity trap of monetary stimulus created by the eternal QE and imbalances in emerging countries, we had forgotten China. It is worth analysing some data. Continue reading Careful with China →

My Top 20 Lou Reed songs. A Hero. RIP

English, Global Economy, On the cover, Sin categoría

Remember Lou Reed. My Top 20:

1) Walk On The Wild Side
2) Venus In Furs
3) Perfect Day
4) Waiting For My Man
5) Sweet Jane (from Rock ‘n’ Roll Animal)
6) Caroline Says II
7) Legendary Hearts
8) Doing The Things We Want To
9) Dirty Boulevard
10) Street Hassle
11) Junior Dad (+ Metallica)
12) Rock ‘n’ Roll Heart
13) Kill Your Sons
14) Rock ‘n’ Roll
15) White Light White Heat
16) The Gun
17) Teach The Gifted Children
18) I Love You Suzanne
19) Heroin
20) Set The Twilight Reeling

Commodities Update

Energy, Global Economy, On the cover, Sin categoría

Oil is flat and looking at a weak short term trend sliding between $105-110/bbl Brent.

The short term palliative of a deal in Washington to temporarily address the debt ceiling and budget overcame the potential longer-term implications of reports of constructive dialogue between Iran and the global powers in Geneva which has the potential, given the US’ positive reaction, to see sanctions eased. Clearly there is a long way to go to get to something substantive and Iranian exports will not recover quickly but fall in Iranian’s exports has compensated for poor demand growth and strong US production growth.

Continue reading Commodities Update →