Financial Times Watch

Recession Watch (Central Banks (CBs) Vs the Davos Elite Department) Let’s start with Recession Watch today, and what the Central Banks (CBs) are up to. T he consensus over the last few weeks in the FT is that is that the Fed will either rise rates by 25 basis points (0.25%), or by more. In other words no one really knows, but the markets do seem to tend towards the former. So let’s turn to the big capitalist shindig, the World Economic Foundation (WEF), that went down at Davos in Switzerland last week. There, two big Wall Street honchos, Dimon & Gorman, gave their two cents . Dimon, JPMorgan, believes that we are headed to 6% interest rates. He noted that lower inflation, on the back of low energy prices and China reopening, is temporary, and inflation will return. Meanwhile Gorman, Morgan Stanley, thinks we are heading for 4,4, and 4. Referring to a world were 4% inflation, unemployment and interest rates are normal. The impression I am left with from their comments is that i

Recession watch today begins with the words of the IMF . It was downbeat last year about the global economy, but at Davos this week they have started to see the silver linings. The FT reports on the front page that the IMF is most buoyed about a re-opening of China, the US’s shift to green investment (a $369bn subsidy bonanza), Europe’s adjustment to the war in Ukraine and the recent drop in energy prices. The global institution of US economic power still sees recession in 2023, but believes that by 2024 the economy will be back to growth, woo hoo! Nevertheless, some business leaders fear that China’s growth may not be sustained, see page 6 of today's UK edition, inflation will continue to be a problem and if the EU doesn’t turn on the green subsidy spigot, like the Americans have, the outlook might not be so cheerful. The EU, though, is keen to dispel this idea , see page 8. To this, I would add that the GOP’s revolt against the green energy transition may also impact negativel

  Regulator/Central Bank Watch Today's watch begins with the regulators, and is a follow up from yesterdays complaint from insurance companies that new capital requirement rules coming from the UK gov would risk future investment. Which is code for: “If you don’t let us make loads of money, we won't invest it into the economy”. Well today, to give us a different view it is the turn of the Bank of England (BoE), surprisingly, testifying before a commons select committee of MPs. BoE governor Andrew bailey and Sam Woods, Prudential Regulation Authority, both note that the new rules around insurance companies “...increase the risk that a pension provider would run out of capital…”. They further noted that this was a choice the government made to. While also noting that there was many items in the regulations that still needed to be reviewed that could still create financial instability. All in all, it is good to see the BoE standing up to protect workers future pensions from

Recession Watch This weekend’s FT, 14/01/23, was in the middle on the worlds economic instability, First it noted that growth was up and inflation was lower in Europe while Emerging Market nation’s were looking better as they sold a lot more bonds in January. Promoting more confidence that slower rate rises from the Fed are on the cards. The only sour note being that a recession is still expected this year in the developed nations. Yet, on today’s front page, 16/01/23, the FT is straight in to the bad news coming out of the World Economic Forum (WEF) in Davos. Several big multi-national corporations, MNCs, are writing down recent acquisitions (think media / healthcare p.10) while a third of the worlds economy is expected to go into recession. What they are calling a “polycrisis”. There is also good news here as the instability is stopping “empire building” by MNCs. Concentration of capital is a bad thing for everybody as MNCs normally leverage their monopolies to reduce democratic

State Corporate Crime Watch It is straight into the Regulator / Recession /War on labour Watch today for the latest on the Fed’s mission to discipline workers. And it is relatively good news as the European edition has a story on the front page about the Fed’s willingness to slow rate rises as inflation falls. The FT notes that the US central bank is mulling over a move down from interest rate rises of 0.75% to 0.25%. The inflation drop is put down to a fall in petrol prices of nearly 10%, but clothing, recreation and personal care services continued to increase. To me this suggests wages are still increasing, and as I have mentioned previously the Fed’s mission is primarily to discipline labour through high interest rates when salaries start to go up. So while the Fed may slow the rises in the near future, I don’t think we are out of the crisis yet. Indeed, only last week one column in these here pages alluded to the idea that we may be locked into a system of higher inflation t

State Corporate Crime Watch Today’s watch once again starts with the UK regulator watch . Today HM Revenue & Customs outgoing head of serious Fraud, Simon York, noted the agency’s new strategy to target tech savoy international fraudsters and the companies that enable them. Interestingly enough this comes a day after MPs criticises the £10bn a year the HMRC is losing to fraud. £10bn a year, though, may be a drop in the ocean; as the article goes on to note that UK citizens have £850bn overseas, £570bn in tax havens. And this is despite criminal sanctions since 2017 for facilitating tax evasion. But as the City of London is itself a well known tax haven, maybe the real concern for the regulators is keeping that money in the UK’s financial sector. US War Watch Next up is US War Watch, though maybe de-globalisation, decoupling or great power politics watch would be more appropriate. Anyway, we started yesterday with the latest on the Chinese axis, but today’s watch is more interest