A Different Perspective
Asking the Right Questions
Weekly Market Recap: W/E September 25th 2015
Market Recap
A strong rally in equity markets on Friday helped brighten up what was otherwise a miserable week for equity investors. Against an uncertain backdrop, the confession from Volkswagen that they had used software to cheat US emission standards, heaped further pressure on an already fragile market. Shares of the iconic German company plunged -34% over the week, with European equity markets falling sharply on Tuesday and Thursday, before recouping some losses on Friday. Read More
VW & “Maximising Shareholder Value”
Global equity investors have endured a difficult few months, amid concern about plunging commodity prices, the outlook for the global economy and the direction of US monetary policy. Against this uncertain backdrop, the confession from Volkswagen that they had used software to cheat US emission standards, heaped further pressure on an already fragile market. The risk now is how far-reaching it may be within the company and across the industry. Read More
Weekly Market Recap: W/E September 18th 2015
Market Recap
Global equity investors suffered another challenging week. Most of the major indices had notched up strong gains in the early part of the week, ahead of the US Federal Reserve’s all-important monetary policy meeting on Thursday. However, accompanying their decision not to raise interest rates, the Fed offered a more downbeat than expected view of the global economy, causing equity markets to sell off and bond yields to decline sharply. Read More
A Karl Pilkington Perspective on Central Banks
Those who have heard of Karl Pilkington probably know him as the guy in the TV show An Idiot Abroad. However, it was the podcasts with Ricky Gervais and Stephen Merchant (co-creators of The Office) in the mid-2000’s that earned him cult status, for his often misinformed but hilarious views conveyed in a ‘thinking out loud’ style of conversation. There is even a website dedicated to his most ludicrous opinions and quotes: http://www.pilkipedia.co.uk
One of Karl’s classic quotes came from his thoughts on how the body works, posing the question: “Does the brain control you, or are you controlling the brain? I don’t know if I’m in charge of mine”. (Have a listen on this YouTube clip)The quote inspired laughter but what’s funnier is that Karl may have been unknowingly touching on a branch of philosophy known as the “philosophy of mind”, which explores the relationship between the mind and body, as well as concepts like ‘what is consciousness?’.
The philosophy of mind is some deep stuff, but if Karl was to think out loud on the financial markets and the obsession with central bank policy, perhaps he might ask: ‘Do the central banks control the markets, or do the markets control the central banks?’ Who is in charge?’. Some people might think it is a stupid question with an obvious answer. However, there is a complexity to this question, given the dynamic nature of the world, the interdependent relationships that exist and a feedback loop that is difficult to quantify. Read More
Weekly Market Recap: W/E September 11th 2015
Market Recap
Global equity markets ended the week in positive territory, albeit with continued volatility as uncertainty reigns. Talk of fiscal stimulus from the Chinese authorities was the main catalyst for markets to move higher in the early part of the week. Read More
Active Management: A Football Perspective
Trustee groups face a plethora of choice when implementing an investment offering within a pension scheme. One important decision is whether to use passive or active investment managers. Passive managers simply look to replicate a particular index. For example, for broad exposure to global equities, trustees could use a low cost passive fund to replicate the performance of the FTSE World equity index, a global equity index of over 2,500 companies. Read More
All eyes on Janet Yellen and the US Fed!
A major source of the market volatility in recent months has been the uncertainty around the outlook for interest rates in the US. This week will be eventful, with the US Federal Reserve holding their much anticipated monetary policy committee meeting, as market participants continue to fret about a possible rate hike. Expect the CNBC countdown clock on Thursday! Read More
Saving up pension woe
Article appeared in the Sunday Time Business section September 14th 2015
The return of the generals of the Celtic Tiger Boom and Bust – McCreevy, Ahern and Cowen – in front of the Banking Inquiry, attracted huge media attention, and was no doubt a welcome distraction for the current government. For me, the Banking Inquiry is a waste of millions and public resources to tell us what we already know.
Rather than focusing on the mistakes of the past, these resources should be allocated to mapping out a more sustainable Ireland for the future. As we look forward, one of the biggest challenges yet to be addressed is the looming pension crisis, as a large group of the population faces retirement with inadequate pension provision. Read More
Weekly Market Recap: W/E Ending September 4th 2015
Market Recap
Eurofirst 300 Index -2.86% German 10-Year Yield 0.67%; EUR/USD $1.112; Brent Oil $49.41
Global equity markets sold off sharply on Friday, to close out another miserable week for equity market investors. Fears over a steeper downturn in China and the spillover effects on the global economy continue to weigh on markets, while investors remain on tenterhooks over the possibility of the US Federal Reserve raising interest rates this year. Read More
Draghi leaves the door open for QE2
After disappointing Chinese data it was over to Super Mario – European Central Bank (ECB) President Mario Draghi – to try and lift the market on Thursday, in his press conference following the ECB’s latest monetary policy meeting. First, the bad news, the ECB’s projections for inflation and economic growth for the next three years were revised downward. The good news for markets? As expected the Italian didn’t disappoint, emphasising the ECB’s “willingness and ability to act, if warranted”. Read More
