If greater political uncertainty necessarily begets higher financial volatility, world markets are still half asleep - but the alarm clock may be set nonetheless.
Brett Garbut CFS,CLTC’s Post
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There are key lessons to be learnt, not just from the inflation shock and handling of the pandemic, but from the entire period since the 2008 global financial crisis, writes Creon Butler. https://lnkd.in/eeVQejh2
Reform the macroeconomic policy framework, don’t abandon it
chathamhouse.org
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"A great challenge of life: Knowing enough to think you're doing it right, but not enough to know you're doing it wrong."
Are we living in unprecedented times? Yes, unevenly so. The US is NOT. China maybe. Ukraine and Russia - probably., Gaza - nope. UK, EU etc - there is not much unprecedentedness. Covid - was once a century, that means it was not unprecedented. Certainly not Black Death levels. "Over that period, I have heard the constant refrain that the world is in the midst of “unprecedented changes”. This popular trope frequently resulted in equally hyperbolic corollaries: breathless claims that we have never faced greater risks or such an uncertain future, and that forecasting has never been harder. Repeat it enough and it starts to become believable." Yup, the hypesters are selling their medicine/nooks/talks; and when push comes to shove easily fooled by randomness. Look, we are living in an interconnected world - this means greater potential volatility given its inherent complexity. "It is against this background that forecasters face the seemingly impossible task of predicting the future. Of course, public policymakers face an equally profound challenge. While another crisis is coming, probably sooner rather than later, aligning forward-looking policy with the pitfalls of a highly uncertain future is the functional equivalent of balancing a heavy weight on the head of a pin." So, taking prudent preparation, anticipating and prepping for the next big thing is important for govts. "But that hardly justifies self-serving excuses for policy mistakes or portraying asset-market mispricing and economic dislocations as unavoidable accidents arising from so-called unprecedented circumstances. I have run out of patience with policymakers, corporate decision-makers and investors who collectively throw up their hands and say, “Don’t blame me”. This is largely a cop-out. Shocks are here to stay, and our task is not to predict the next one – although someone always does – but to sharpen our focus on resilience. Staying the course of politically mandated policies while minimising the inevitable dislocations is easier said than done, but that is no excuse to fall for the myth of being victimised by the unprecedented."
Opinion | Policymakers must stop hiding behind myth of ‘unprecedented changes’
scmp.com
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[Retired] Information Specialist & Lecturer & Director IWS News Bureau at ILR School/Cornell University
IMF Global Financial Stability Report, October 2023: Financial and Climate Policies for a High-Interest-Rate Era [10 October 2023] https://lnkd.in/g876uRkU or https://lnkd.in/gzA4HSMB Chapter 1 assesses that risks to global growth are skewed to the downside, similar to the assessment in the April 2023 Global Financial Stability Report. Cracks in the financial system may turn into worrisome fault lines should a soft landing of the global economy hoped for by market participants does not materialize. Chapter 2 homes in on the global banking system, providing a fresh assessment of vulnerabilities in a higher-for-longer environment, using an enhanced global stress test and a set of newly developed market-based indicators. In response to the vulnerabilities that are uncovered, enhancements to supervisory practices and tightening of regulatory standards are proposed. Chapter 3 notes that a broad mix of policies is required to unlock the private capital necessary to cover climate mitigation investment needs in emerging market and developing economies.
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Economic data has turned more positive lately. What does that mean for your portfolio? In truth, it shouldn't matter that much. Here's why: 1. There will always be good news and bad news out there. 2. It's difficult to predict economic outcomes. 3. Even if your prediction is correct, it is difficult to predict how markets react to those predictions. Conclusion: Remaining invested (with the right portfolio) is more important than predicting when to go in and out of the market. For more on this, check out our latest commentary. #economy #portfolio #markets #financialnews #assetallocation #wealthmanagement
"Financial market history is filled with the “next big crises” — these are the bricks that make up the wall of worry. While these events may cause disruptions and volatility, they more often than not prove temporary, and the outcome is rarely as bad as feared." For the latest market insight, read our new edition of Perspectives:
Perspectives - What, me worry?
guardiancapital.com
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Markets have struggled at the start of Q2 due to changing expectations around the Fed and escalating geopolitical tensions. Staying level-headed and keeping these events in perspective are still the best ways to pursue long-term financial goals. #Economicoutlook #stockmarket #marketnews
How Investors Navigate Market Pullbacks, Geopolitical Risks and More
bleakley.com
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FX Specialist | Macro Writer | Business Development Strategist | Open For Strategic Partnerships & Collaboration
The aftermath of the 2007-2008 financial crisis has been a long and painful journey for many of us. Unfortunately, the solutions that were implemented have proved to be much worse than the crisis itself. Instead of embracing Keynesianism on a global scale, we have witnessed the exact opposite: austerity. This policy, which was first introduced in Peru in 1978, has spread to many Latin American countries, the Second World, and now the very core of the developed First World, including the United States and Europe. The consequences of austerity have been devastating and have caused political havoc in these regions. One of the main effects of this policy has been de-industrialization, which has led to international migration. The central banks' approach to solving the current crisis by flooding the global economy with cheap money has resulted in growing global indebtedness, falling real wages, and consequently, falling demand in the real economy. The absence of institutions strong enough to prevent this development may finally lead to David Ricardo's observation in 1817 that the market price of labor will always tend toward the minimum required for subsistence. It's time to reinvent Keynesianism on a global scale before it's too late. ~ Erik Reinert
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#InvestorSentiment remains on the defensive in all markets we track, except in Australia and China where investors remain hopeful for better times ahead. Elsewhere, sentiment and markets have been busy resolving their July divergence, through some give and take. Find out why the US is the only exception to this, more about the Japan rally and the impact of climate change on sentiment, here: https://hubs.la/Q01_B4hX0 #MarketSentiment #QontigoROOF
Qontigo ROOF™ Score Highlights: Week of August 21, 2023 | Qontigo
https://qontigo.com
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"Financial market history is filled with the “next big crises” — these are the bricks that make up the wall of worry. While these events may cause disruptions and volatility, they more often than not prove temporary, and the outcome is rarely as bad as feared." For the latest market insight, read our new edition of Perspectives:
Perspectives - What, me worry?
guardiancapital.com
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In this month's Market Commentary, our European Strategist, Jeremy Batstone-Carr, discusses the reactions of the financial markets to the conflict in the Middle East. Plus, a look at inflation and interest rates. Read this month's Market Commentary below. #CapitalAtRisk #RaymondJamesUK
Clouds of war shroud financial markets | Raymond James Investment Services
raymondjames.uk.com
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