Andrew Hunt Commentary

Investment Insights by our experts and thought leaders

The Great Central Bank Unwind

Whether by luck or design, when I first entered the world of applied economics during the mid-1980s, I decided that I would like to specialize in covering central banks and in studying the flows that these institutions could create within financial systems and the real economies of the world..

Trump: Uncertainty as well as Hope

Of course, we have nothing resembling an ‘inside track’ on whom Trump will appoint to his Administration over the next few weeks and precisely what new policies Trump will in fact be able to introduce from a practical perspective – or over what time frame these might occur.

Inflation returns to the Global Economy?

Over recent weeks, many analysts around the world have become more optimistic over the outlook for world trade and this view has apparently been helped by some – although by no means all – of the most recent Asian trade data and by a partial rebound in PMI (Purchasing Managers’ Index) data in Europe and the USA.

A Letter From America

Despite having recently spent an interesting week on the East Coast of the USA, we can safely say that we still have no idea who will win the Presidential Election.

The West Looks East

Having conducted a significant number of client meetings over recent weeks, one feature that has struck is that amongst this, albeit probably rather biased, sample group, there would seem to be a distinct desire to sell risks – although few people have actually done so yet.

China Recreates the Mississippi Bubble

At -3% in year on year terms, China’s published rate of reserve money growth appears exceptionally weak and certainly far at odds with the ECB’s 40% rate of base money growth or even the Bank of Japan’s 26% YoY rate.

BREXIT - Near Term and Longer Term Views

We very much doubt that the financial markets remotely expected the BREXIT vote to deliver a ‘leave outcome’ (and we also very much doubt that many people that voted for it actually expected it to occur).

A View of BREXIT

Although this month’s vote by the UK population on whether they should choose to remain in the EU or depart is being billed as being of immense significance to the UK, we suspect that it is the world that should fear any consequences of a possible BREXIT as much as the UK should fear the event.

Competition Takes Many Forms

It may surprise some readers to know that we recently compiled an overtly positive review of the Irish economy. In the course of this review, we noted that despite the severe problems that the country had encountered a few years ago, the Irish economy was now facing what we described as a chronic balance of payments surplus.

China's Global Importance

Despite seemingly a multitude of worries over the potential for a slowdown in US growth, the growing signs of weakness in Japan, the arrival of an industrial recession in Europe and the uncertainty over BREXIT, financial markets have arguably performed remarkably well over recent months.

Through the Looking Glass, the Madness of Negative Rates

We suspect that many market participants have viewed the major central banks’ various “extraordinary measures” that have been adopted since the financial crisis of 2007-8 as having been a good thing. Therefore they have perhaps – or most probably – been wrong-footed by the markets’ rather negative reaction to the promises of yet more QE / negative rates / more monetary experiments.

China: Accept the Landing

There is apparently a saying in the UK’s Parachute Regiment that after you have jumped out of the plane you simply have to accept whatever landing you get. While we might hesitate to liken China’s great credit boom of 2009-2014 as being akin to jumping out of a plane – although there certainly was an element of there being a leap into the unknown – it is clear that China’s economy is landing at present.

Some Things That Worry Me

It has of course become something of a tradition to do a ‘year ahead’ piece covering themes that could potentially shape the investment landscape and, with this in mind, we have decided to offer our thoughts on just what may lie ahead over the course of what we suspect is going to be a particularly interesting year.

The Threat to Global Growth from Rising Inventories

It must be remembered that 2015, like 2014 and 2013 before it, was supposed to be the year in which the US and indeed other consumers finally threw off the shackles of the Post GFC era and raised their level of spending on the back of falling energy prices and rising housing and property wealth.

Japan: Paying the Piper Thirty Years On

“Monetary Policy can only take growth from other countries or borrow it from the future” – Masaaki Shirakawa, during a private conversation, September 2015

Credit Boom Ping Pong - From 1985 to 2015

In our opinion, rather than embarking on credit boom "ping pong" with the EM, the Western world should have invested in raising productivity

Is A Global Recession Approaching?

Despite this evidence of a new global malaise, there are still those that continue to expect the US economy to “ride to the rescue” over the next few months.

Soundbites: Our Summary of a Complex World

Without a doubt, we find the current state of the global economy more complex than perhaps at any other time in our 25 years of experience.

Commodity Producers Face A Difficult Year

One of the key features of the global economy – and particularly of the “Pacific Rim economies” – that has most concerned us over recent months has been the immensely weak investment spending trends that are starting to appear across Asia. We firmly believe that this weakness in capital spending ...

A Global Savings Glut? Or Just Deflationary Forces?

One of the reasons that we tend to eschew “black box” forecasting models of any economy is that we suspect that there are simply too many variables and discontinuities for even mathematicians with the skill of the late John Nash to ever really encompass effectively. In this context, One of the least understood or modelling-friendly “variables” within a macroeconomic system is the household savings rate...