Category Archives: News

House prices are becoming red hot, and this is scary

House price growth is accelerating in the UK and the rest of Europe, but it is far from healthy growth. The consequences of lax rules on lending to house buyers could be devastating.

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Climate change could be the market’s next Black Swan

Even those who still do not believe that climate change is a serious threat to our way of living will need to pay attention: it could turn out to be the next Black Swan for financial markets.

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Beyond the Covid-19 crisis, forecasts may be too optimistic

The Covid-19 crisis is one year old, and already, on the economic front at least, optimism is gaining ground.

The International Monetary Fund (IMF) economic growth projections, released last week, point to a strong rebound: the world economy is forecast to expand by 6% this year, led by emerging and developing Asia, which is expected to grow by 8.6%.

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Will digital currencies encourage debt default by stealth?

Central banks are getting closer and closer to issuing digital currencies, but this attempt to fend off the threat of cryptocurrencies raises many questions about the future of the economy.

One consequence of central bank digital currencies, which for the moment is not discussed as much as it should be, is that they could serve as “Trojan horses” for negative interest rates – and these in turn could amount to debt default by stealth.

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Emerging markets face three major headwinds

Emerging market assets have enjoyed robust performance despite the Covid-19 pandemic, with investors attracted by their higher yields and faster economic growth prospects in these countries.

But three headwinds could cut short their growth spurt: rising interest rates, environmental, social and governance (ESG) issues and the retreat of globalisation.

These headwinds are converging at a very delicate time for global markets, and at least two of them could persist for a long time.

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The Fed starts a dangerous dance with the market

With baby steps, the Fed and other major central banks are beginning their journey back towards some semblance of normality.

This will be a big resilience test for a financial system which, for more than a decade, has relied on repeated rounds of monetary generosity. Continue reading

Investors should look for the gold of the future: forests

Probably not many people waking up next Sunday 21 March will be aware that it is the International Day of Forests — but they should be.

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Mortgage guarantee could sow the seeds of trouble

The UK government awarded hard-working medical staff a meagre 1% pay rise in the most recent budget, all the while splashing out on yet another indirect subsidy for house prices: the mortgage guarantee.

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Market turmoil tests the power of central banks

The turmoil we are currently seeing in stock and bond markets is just one battle in the war that has been going on in capital markets for a long time: debt versus equity versus central banks.

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