Reasons to be cheerful on the Global Economy

[Garpal Gumnut]

It is always difficult to be cheerful on the Global Economy when regional wars blaze and the threat of world war is about.

Chris Giles from the Financial Times gives some good reasons for hope.

Unfortunately it is behind a firewall but I'll summarise the main points he gives for optimism.

Reasons to be cheerful about the global economy

There is no room for complacency, especially about relations between the US and China, but some optimism is merited

www.ft.com

• China opening from Covid Lockdown.
• A loosening of Supply Chain Blockages post Covid.
• A lack of European oil supplies not eventuating from Putin's War.
• A reasonable oil price despite the Opec+ cartel's effort to tighten supply.
• The major world economies not in recession despite predictions due to rising interest rates.
• Recent reassurance to China that the US and Europe still wish to trade.

Unfortunately there are good arguments to the contrary.

Let us see how it pans out.

gg

 

[divs4ever]

It is always difficult to be cheerful on the Global Economy when regional wars blaze and the threat of world war is about.

Chris Giles from the Financial Times gives some good reasons for hope.

Unfortunately it is behind a firewall but I'll summarise the main points he gives for optimism.

Reasons to be cheerful about the global economy

There is no room for complacency, especially about relations between the US and China, but some optimism is merited

www.ft.com

• China opening from Covid Lockdown.
• A loosening of Supply Chain Blockages post Covid.
• A lack of European oil supplies not eventuating from Putin's War.
• A reasonable oil price despite the Opec+ cartel's effort to tighten supply.
• The major world economies not in recession despite predictions due to rising interest rates.
• Recent reassurance to China that the US and Europe still wish to trade.

Unfortunately there are good arguments to the contrary.

Let us see how it pans out.

gg

given the Financial Times seems to support an agenda

let's throw in some alternative concepts

China is restructuring it's selective 'Covid lock-downs ' ( that is the ones in the last two years )

China is selectively choosing which supply routes to open up ( Thailand is getting hi-speed rail , Asian car manufacturers are still facing a shortage of basic chips )

there is still adequate oil it's just Europe now needs a middle-man to receive it ( normally China or India )

there is plenty of oil at the desired price , courtesy of the US strategic reserve ( others buy outside of the US dollar or euro )

the major world economies are addicted to changing definitions ( disinformation or vaccine as examples , or maybe science is consensus )

to those that read Chinese transcripts know China has repeatedly told the US about the US saying one thing and doing another

now since that very ancient Chinese general Sun Tzu , quoted all war is based on deception , one must assume we are in the middle of a trade war with a currency war imminent

 

[Dona Ferentes]

• China opening from Covid Lockdown.
• A loosening of Supply Chain Blockages post Covid.
• A lack of European oil supplies not eventuating from Putin's War.
• A reasonable oil price despite the Opec+ cartel's effort to tighten supply.
• The major world economies not in recession despite predictions due to rising interest rates.
• Recent reassurance to China that the US and Europe still wish to trade.

These hold up still.

Unfortunately there are good arguments to the contrary.

This holds up still.

 

[waterbottle]

We are still alive

 

[frugal.rock]

Klaus Schwab is still alive, to steer us in the right direction...???

 

[Dona Ferentes]

It is always difficult to be cheerful on the Global Economy when regional wars blaze and the threat of world war is about.

Reasons to be cheerful about the global economy

There is no room for complacency, especially about relations between the US and China, but some optimism is merited

www.ft.com

• China opening from Covid Lockdown.
• A loosening of Supply Chain Blockages post Covid.
• A lack of European oil supplies not eventuating from Putin's War.
• A reasonable oil price despite the Opec+ cartel's effort to tighten supply.
• The major world economies not in recession despite predictions due to rising interest rates.
• Recent reassurance to China that the US and Europe still wish to trade.

Unfortunately there are good arguments to the contrary.

Let us see how it pans out.

gg

Don Stammer produces a list every year of X Factors .. for 2024 :::

The year now ending certainly had an abundant harvest of X-Factors, among them:

• The success of Donald Trump in winning the US presidency while Republicans hold a majority in both houses. Many people are still scratching their heads, wondering what the consequences might be.
• Over the last six years, the US has been by far the world’s best performing economy and the most innovative. In those six years, the US has not experienced a recession, though the National Bureau of Economic Research, which dates US recessions, says it spied a glimmer of one in 2022.
• What makes this clean record of zero recessions so mind-blowing is the many thousands of predictions that an imminent and severe recession was about to hit the US. A conga line of forecasters – many of them people who work in financial markets – has repeatedly claimed that the US economy would soon be upended by a major recession that would also cripple the rest of the world.
• In the early 1980s, Paul Samuelson, a well-known economist and author of the textbook that dominated macroeconomics in my undergraduate years, famously observed that “Wall Street has predicted nine of the past five recessions”. This time around, the gap between “Wall Street predictions made”, and “Wall Street predictions made successfully” is unthinkably wide and lopsided.
• Patient investors holding US shares and who ignored the naysayers have made attractive gains over recent years (and specifically in the last 12 months when average share prices have risen more than 20% and average dividends were increased).
• This year’s positive lead from US shares has also boosted prices in other share markets including the ASX, which reached record highs two weeks ago – something that would not have happened if our share market had been tracking just local factors.
• Another feature of 2024 has been the widely different views on how ‘sticky’ inflation is likely to be. For Australian investors, the two countries that matter for inflation are the US (where tariffs have been increased sharply and the budget deficit is 6% of GDP) and Australia (where wage demands are running at levels well above the rate of inflation and where productivity growth is negligible).
• In my view, underlying inflation in Australia could well be in the troublesome range of 4-5% in 2025 - a couple of notches above both prospective inflation in the US and the medium-term target of the Reserve Bank.
• The price of Commonwealth Bank shares has risen strongly in recent months, perplexing many advisors who had expected banks to suffer increasing losses on their housing loans. In my view, the gains in CBA share price reflect changes in the strategies of many fund managers, particularly among industry superannuation funds, which are now investing more of their clients’ money in exchange-traded funds that track the market and less in actively managed funds run-in house that aim to out-perform market returns through their stock selection. With the record of actively managed funds unimpressive when additional fees are charged, and with the CBA making up an impressive 8.2% of the ASX 200 index, the effect on that bank’s share price has been significant.
• In Australia, economic growth has slowed to near-zero rates over the first three quarters of 2024 despite the massive increases in spending by federal and state governments. The combination of our heavy reliance on variable rate debt when we borrow for housing, and the high levels of mortgages taken on during the extremely low interest rates of the pandemic period, have caused severe financial pain for many mortgagees.
• The Federal Treasurer has made it clear he would like the Reserve Bank to reduce its cash rate to ease theses strains, blaming the Reserve Bank for ‘smashing’ the Australian economy by leaving its cash rate unchanged while other countries have cut their rates. Unsurprisingly, the Reserve Bank Board suggests (my words here) it awaits convincing signs that inflation is on the way down with reasonable prospect of return to the target range over the next year to 18 months.
• The Chinese economy has also slowed, mainly because of the cutback in bank lending and the strains on bank balance sheets after the housing market collapsed from oversupply a couple of years ago. The Government has eased monetary and fiscal policies to stimulate growth, but most commentators say more needs to be done to lift growth to the target rate of 5%. Nonetheless, Chinese share markets have made some useful gains, with the price of FXI, the exchange traded fund made up of large companies listed on the Shanghai Stock Exchange having risen by 33% in the last 11 months, including a one-day move of +9% in the last fortnight.

And this year’s winner of the X-Factor award is …

The US economy is in its sixth year without experiencing recession, despite the many predictions of an imminent and deep economic downturn.

more reading:::

Time to announce the X-factor for 2024

What is the X-factor - the largely unexpected influence that wasn’t thought about when the year began but came from left field to have powerful effects on investment returns - for 2024? It's time to select the winner.

www.firstlinks.com.au

 

[JohnDe]

And it is looking like the wait for the investors holding onto cash is closer than ever.

 

[Knobby22]

Don Stammer produces a list every year of X Factors .. for 2024 :::

The year now ending certainly had an abundant harvest of X-Factors, among them:

• The success of Donald Trump in winning the US presidency while Republicans hold a majority in both houses. Many people are still scratching their heads, wondering what the consequences might be.
• Over the last six years, the US has been by far the world’s best performing economy and the most innovative. In those six years, the US has not experienced a recession, though the National Bureau of Economic Research, which dates US recessions, says it spied a glimmer of one in 2022.
• What makes this clean record of zero recessions so mind-blowing is the many thousands of predictions that an imminent and severe recession was about to hit the US. A conga line of forecasters – many of them people who work in financial markets – has repeatedly claimed that the US economy would soon be upended by a major recession that would also cripple the rest of the world.
• In the early 1980s, Paul Samuelson, a well-known economist and author of the textbook that dominated macroeconomics in my undergraduate years, famously observed that “Wall Street has predicted nine of the past five recessions”. This time around, the gap between “Wall Street predictions made”, and “Wall Street predictions made successfully” is unthinkably wide and lopsided.
• Patient investors holding US shares and who ignored the naysayers have made attractive gains over recent years (and specifically in the last 12 months when average share prices have risen more than 20% and average dividends were increased).
• This year’s positive lead from US shares has also boosted prices in other share markets including the ASX, which reached record highs two weeks ago – something that would not have happened if our share market had been tracking just local factors.
• Another feature of 2024 has been the widely different views on how ‘sticky’ inflation is likely to be. For Australian investors, the two countries that matter for inflation are the US (where tariffs have been increased sharply and the budget deficit is 6% of GDP) and Australia (where wage demands are running at levels well above the rate of inflation and where productivity growth is negligible).
• In my view, underlying inflation in Australia could well be in the troublesome range of 4-5% in 2025 - a couple of notches above both prospective inflation in the US and the medium-term target of the Reserve Bank.
• The price of Commonwealth Bank shares has risen strongly in recent months, perplexing many advisors who had expected banks to suffer increasing losses on their housing loans. In my view, the gains in CBA share price reflect changes in the strategies of many fund managers, particularly among industry superannuation funds, which are now investing more of their clients’ money in exchange-traded funds that track the market and less in actively managed funds run-in house that aim to out-perform market returns through their stock selection. With the record of actively managed funds unimpressive when additional fees are charged, and with the CBA making up an impressive 8.2% of the ASX 200 index, the effect on that bank’s share price has been significant.
• In Australia, economic growth has slowed to near-zero rates over the first three quarters of 2024 despite the massive increases in spending by federal and state governments. The combination of our heavy reliance on variable rate debt when we borrow for housing, and the high levels of mortgages taken on during the extremely low interest rates of the pandemic period, have caused severe financial pain for many mortgagees.
• The Federal Treasurer has made it clear he would like the Reserve Bank to reduce its cash rate to ease theses strains, blaming the Reserve Bank for ‘smashing’ the Australian economy by leaving its cash rate unchanged while other countries have cut their rates. Unsurprisingly, the Reserve Bank Board suggests (my words here) it awaits convincing signs that inflation is on the way down with reasonable prospect of return to the target range over the next year to 18 months.
• The Chinese economy has also slowed, mainly because of the cutback in bank lending and the strains on bank balance sheets after the housing market collapsed from oversupply a couple of years ago. The Government has eased monetary and fiscal policies to stimulate growth, but most commentators say more needs to be done to lift growth to the target rate of 5%. Nonetheless, Chinese share markets have made some useful gains, with the price of FXI, the exchange traded fund made up of large companies listed on the Shanghai Stock Exchange having risen by 33% in the last 11 months, including a one-day move of +9% in the last fortnight.

And this year’s winner of the X-Factor award is …

The US economy is in its sixth year without experiencing recession, despite the many predictions of an imminent and deep economic downturn.

more reading:::

Time to announce the X-factor for 2024

What is the X-factor - the largely unexpected influence that wasn’t thought about when the year began but came from left field to have powerful effects on investment returns - for 2024? It's time to select the winner.

www.firstlinks.com.au

The economy has been very well run.
I don't think you can count on that now. Big changes are going to happen.

 

[divs4ever]

The economy has been very well run.
I don't think you can count on that now. Big changes are going to happen.

the economy .. NO
the narrative .. all bright and shiny and glowing ( probably from radioactive dust )

changes yes , but have i guessed most of them correctly , and more importantly can i get an edge from those changes

 

[sptrawler]

the economy .. NO
the narrative .. all bright and shiny and glowing ( probably from radioactive dust )

changes yes , but have i guessed most of them correctly , and more importantly can i get an edge from those changes

Yep all is good in the Kingdom, China is buying our crayfish again, we are saved. God bless them.

MSN

China says Australian rock lobster trade can recommence effective immediately​

 

[finicky]

MSN

China says Australian rock lobster trade can recommence effective immediate​

How gracious of our CCP friends. Also our barley, coal, wine and beef.
Did our beloved foreign minister and our ramrod P.M suck up to them with concessions or did bending us over simply not work? Penny won't hide anything from the electors. Maybe one concession - how would we know?

"Former speaker of the house Bronwyn Bishop has slammed Foreign Minister Penny Wong for voting against the United States and with China and Russia at the United Nations.
Foreign Minister Penny Wong has accused Israel of not abiding with international law.
“Why should we be surprised at her words? After all, in the vote at the United Nations … she voted against our ally, the United States, and voted with China and Russia,”
"

 

[TimeISmoney]

The problem is China is our biggest current trade partner, no one else really cares about us and least of all Trumpet.

 

[sptrawler]

The problem is China is our biggest current trade partner, no one else really cares about us and least of all Trumpet.





View attachment 189952

You really believe China gives a ratz rear about us? They have just spent billions putting our nickel industry in intensive care and no doubt hoping they can pick it up in the fire sale, but hey they are going to buy our crays. Lol

Our crays are ash tray money, compared to what we're paying for their grid batteries, that they are using our cheap lithium to build, because they've tanked the price of lithium too.

So much for processing here, maybe if we could process smugness, we could take over the world. Lol

Way too many vested interests in Australia and way too many people with self interests.
It will be interesting to see the end result.

 

[TimeISmoney]

You really believe China gives a ratz rear about us? They have just spent billions putting our nickel industry in intensive care and no doubt hoping they can pick it up in the fire sale, but hey they are going to buy our crays. Lol

The US screws us over more than China, Aussies are asleep. US corporates basically rip stuff out of the ground and take it directly.

I'll tell you some of the scummy crap the US do to us, they've geoblocked many retailers in Europe from selling their products to us because they're sold at half of the price over there and that's after the import costs to Australia, so you have no options but to buy from US distributors in Australia. In many cases, it is cheaper to buy another new unit than to buy spare parts from them.

We make very little here and we're in no position to crap on China no matter how bleak things look here.

 

[sptrawler]

The US screws us over more than China, Aussies are asleep. US corporates basically rip stuff out of the ground and take it directly.

I'll tell you some of the scummy crap the US do to us, they've geoblocked many retailers in Europe from selling their products to us because they're sold at half of the price over there and that's after the import costs to Australia, so you have no options but to buy from US distributors in Australia. In many cases, it is cheaper to buy another new unit than to buy spare parts from them.

We make very little here and we're in no position to crap on China no matter how bleak things look here.

I don't disagree with that, but to say China will treat us better is farcical, Australia needs to grow a pair and make the politicians start and put Australia first.

The whole situation is getting out of hand, our politicians need to put the KY gell back in the draw and start and earn their money IMO.

China needs us and the US need us , so why the hell are we buttering up, other than to improve the outcomes for the few, over the majority?

It is becoming obvious where we are going and at 70 years old it sure as hell isn't going to affect me. Lol

At the moment you are just saying who you would prefer to bend over the barrel for, I don't think we should bend over the barrel for anyone and I would die fighting to stop someone trying to do it to my kids and grandkids.

So best we just stop discussing who is the best master we have to bow to, I'm too old to start kissing butt.

It's a shame Australia has dropped down to this level IMO.

Also all the geoblock nonsense, use a vpn and you can see the prices, tge problem Australia has is we are importing more people and not producing more stuff, so the value of our money is going down the toilet.
Simple really, it aint rocket science sunshine.

 

[Smurf1976]

We make very little here and we're in no position to crap on China no matter how bleak things look here.

I don't disagree with that but it seems very much like a drug addiction.

Rapid withdrawal will bring extreme pain and may even cause death.

Continuing the addition will lead to ruined health and ultimately death.

The least bad option is thus a gradual, orderly withdrawal although that still comes with a lot of pain. It beats death though.