Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Uncertainty’

Financial Markets Face Fresh Wave of Political Uncertainty: ‘There’s Literally Nowhere to Hide’

Posted by hkarner - 22. Oktober 2019

Date: 21-10-2019
Source: The Wall Street Journal

Investors spooked by widespread turmoil are seeking havens

The U.K. Parliament’s decision to postpone a final vote on the country’s exit from the European Union marks the latest geopolitical development likely to swing financial markets, highlighting the extreme levels of uncertainty that some investors worry isn’t being properly accounted for with U.S. stocks near all-time highs.

The U.S.-China trade war, Britain leaving the EU and impeachment proceedings in the U.S. are just some of the major political obstacles facing investors. Adding to the uncertainty are the Turkish military operation in Syria, attacks on Saudi oil production and social unrest spanning from Hong Kong to Barcelona.

In response, some investors are boosting holdings of cash and other assets that tend to hold their value when markets turn rocky. Others are recommending strategies that could protect against a swift downturn. Den Rest des Beitrags lesen »

Posted in Artikel | Verschlagwortet mit: , , , | Leave a Comment »

Trade uncertainty is at its highest point on record

Posted by hkarner - 12. September 2019

Date: 11-09-2019
Source: The Economist

The unpredictable outlook appears to be dragging down global growth

UNCERTAINTY IS a sort of poison for the global economy. Without knowing what lies ahead, firms delay making potentially profitable investments and hiring new workers. As President Donald Trump’s trade wars have escalated, economists have attempted to estimate how much uncertainty has risen—and to what extent it may be dragging down economic growth.

The latest such measure comes from Hites Ahir and Davide Furceri of the International Monetary Fund and Nick Bloom of Stanford University. To get a consistent measure of uncertainty over time, they scour country reports from the Economist Intelligence Unit, a sister company of The Economist. The more often a report mentions “uncertain”, “uncertainty” or “uncertainties” near a trade-related word, the higher the index value.

The results show that this measure remained low and stable for decades. Despite the collapse in trade around the time of the global financial crisis, uncertainty did not rise, perhaps because world leaders pledged not to resort to protectionist measures.

In recent years, however, trade uncertainty has surged, particularly in advanced economies. Although it rose a little after Mr Trump’s election, it was only after he imposed tariffs on China that uncertainty fully blossomed. It rose in the third quarter of 2018 (the first round of tariffs was imposed in July 2018) and then fell in the fourth quarter because of an apparent truce between American and Chinese trade negotiators. This year the measure has climbed to unprecedented heights (see chart). Den Rest des Beitrags lesen »

Posted in Artikel | Verschlagwortet mit: , , , , | Leave a Comment »

Markets are braced for a global downturn

Posted by hkarner - 16. August 2019

Date: 15-08-2019
Source: The Economist

The signals from bonds, currencies and commodities are increasingly alarming

Looking for meaning in financial markets is like looking for patterns in a violent sea. The information that emerges is the product of buying and selling by people, with all their contradictions. Prices reflect a mix of emotion, biases and cold-eyed calculation. Yet taken together markets express something about both the mood of investors and the temper of the times. The most commonly ascribed signal is complacency. Dangers are often ignored until too late. However, the dominant mood in markets today, as it has been for much of the past decade, is not complacency but anxiety. And it is deepening by the day.

It is most evident in the astounding appetite for the safest of assets: government bonds. In Germany, where figures this week showed that the economy is shrinking, interest rates are negative all the way from overnight deposits to 30-year bonds. Investors who buy and hold bonds to maturity will make a guaranteed cash loss. In Switzerland negative yields extend all the way to 50-year bonds. Even in indebted and crisis-prone Italy, a ten-year bond gets you only 1.5%. In America, meanwhile, the curve is inverted—interest rates on ten-year bonds are lower than on three-month bills—a peculiar situation that is a harbinger of recession. Angst is evident elsewhere, too. The safe-haven dollar is up against many other currencies. Gold is at a six-year high. Copper prices, a proxy for industrial health, are down sharply. Despite Iran’s seizure of oil tankers in the Gulf, oil prices have sunk to $60 a barrel. Den Rest des Beitrags lesen »

Posted in Artikel | Verschlagwortet mit: , , | Leave a Comment »

Consequences of Downward Trending Growth

Posted by hkarner - 9. Januar 2019

Date: 08-01-2019
Source: YaleGlobal

Investors worldwide worry about numerous shocks that could disrupt the global economy – war, cyberattacks or natural disasters. After a decade of low interest rates that fueled record levels of debt, governments recognize that economic growth is slowing. Other warning signs: Nationalism and populism flourish and threaten cooperative blocs like the European Union, the US-China trade war extends into 2019, political leaders continue deficit-spending without reforms, rising interest rates add to struggles over debt repayment. These trends contribute to uncertainty. Economist David Dapice urges cooperation, warning that nations will find it impossible to reduce risks or meet global challenges on their own “The upside of these problems, even migration and climate change, is that they are amenable to better policy – which does not make those policies popular or easy,” he concludes. “The political class must find a way to be honest with voters and persuade them that what is necessary is reasonable.” – YaleGlobal

Governments contend with debt and sluggish growth; many worldwide risks – known and unknown – could add complications

Multinational solutions for national problems: US traders worry about a falling stock market, and British citizens increasingly express a desire to reverse Brexit

Den Rest des Beitrags lesen »

Posted in Artikel | Verschlagwortet mit: , , , , , , , | Leave a Comment »

The Age of Hyper-Uncertainty

Posted by hkarner - 15. Dezember 2016

Posted in Artikel, Books | Verschlagwortet mit: , , , , | Leave a Comment »