This is a good article from the Spectator. On the back of massive fiscal stimulus from Mr. Trump, US financial markets are still looking very attractive. The only downside is global conflict and potential trade wars. Despite all the bluster from Trump and his friends, they surely don’t want a trade war? The next critical date is May 12 for a decision on Iran‘s compliance to the nuclear deal. Will Trump kick the can down the road yet again?
This article published by Fox Business is worrying. It’s worth a read.
With the World’s economy growing and financial markets at record highs, it’s strange that the big banks are laying-off staff to cut costs. The banks are citing global uncertainty.
Certainly, as US interest rates start rising, the hot money will be swarming overseas looking for a new home. But real estate and many financial markets are overpriced, so one wonders what’s going to happen?
With Obama in the White House, political risk seems to be rising across the board. Soon perception will give way to fear start to influence investment decisions. On the back of lower oil prices, many countries are experiencing deflation, falling prices. Take the UK for example. If you look carefully at the Office of National Statistics data on inflation, you will see an alarming trend. If you strip out rising prices of services, the prices of goods in the UK has been falling steeply for some time.
In a word, the problem is extreme ‘volatility’. But if we look at the major risks in the world, a ‘volatile event’ could easily trigger a major market correction.
Let me ask an open question:
What if anything are the investment bankers hiding?