Perspectives
Of Prosperity and Pachyderms
July, 2022
May we talk about the elephant in the room? In the course of British history, we have been invaded by the Romans, pillaged by the Vikings, and conquered by the French. Indeed, Norman French is still used during a Bill’s passage through Parliament and the Royal Assent, at least in part, is given in French. […]
Looking for a Steady State
July, 2022
During the credit crisis of 2008 and the subsequent Euro crisis of 2010, we heard a lot about, “kicking the can down the road.” It was a familiar trope in the financial press at the time; policymakers had no real idea how to solve the problems that had presented themselves, and like the Dutch child […]
Which is better, real, or nominal GDP?
July, 2022
A rise in nominal GDP makes you feel good, but only a rise in real GDP can make you wealthier. In a normal functioning economy prices change all the time. Some prices will rise but others will fall, leaving aggregate prices relatively unchanged. Fluctuating price is not inflation; it is only when prices in aggregate […]
Markets are doing what they do, we must keep our focus
July, 2022
A market is made of a buyer and a seller. If a seller hears that their main competitor has just gone out of business, you could not blame them if they put up the price of a good in their shop as their customers now have less choice in the short term. Since late February […]
The benefits and problems with QE
June, 2022
Much like the recent heatwave, Inflation has once again dominated the headlines as the latest inflation print in the UK breaks through recent records. Consequently, many pundits debate causes and offer solutions to central bank policy makers within developed economies. We feel it is important to remind readers of the origins of the inflationary surge […]
Inflation: A Japanese Perspective
June, 2022
Many years ago, the influential economist, Paul Krugman, published a paper where he identified the emergence of a “liquidity trap” in Japan, a phenomenon that, post the Keynesian interpretation of the Great Depression, many economists’ thoughts were confined to the past. The experience of Japan over the last twenty years or so not only exploded […]
Regime Change in Financial Markets – different, but still the same
May, 2022
Those of us of a certain age will remember the time in the 1970s when inflation both in the UK and the US was running at more than 20%. Recent inflation prints; +9% in the UK and +8.3% in the US in the year to April 30 echo those earlier difficult and stagflationary years. The […]
Demographics
May, 2022
Demographics are deemed to be a driver of investment returns. The argument goes that the bigger the proportion of the population that is of a working age, the greater the economic value creation and the lower the drain on the public purse. These working people, then begin to save, providing a marginal buyer to equity […]
Why do all roads lead to the US?
May, 2022
Recency bias is a cognitive bias that tends to place greater emphasis on more recent experiences and memories, even if they are not the most relevant or reliable. For investors this behavioural bias manifests itself all too often and can be challenging to avoid as more recent financial market events cloud judgement. It convinces us […]
History rhymes
April, 2022
Russia’s incursion into Ukraine has raised a multiplicity of complex ethical, political, social, and economic issues which elicit different explanations and responses, depending on the perspective from which you begin. We in the UK are largely influenced by what might be termed a ‘developed world’ perspective, which might crudely be characterised as democratic, broadly liberal, […]