Tag: Economy

productivity

The Productivity Era

Colin Henderson

Where are we with AI now evolution Introduction I have written about AI from business perspective. Here I will look forward and cover how my original vision of AI as a business tool is coming along. Artificial Intelligence was introduced to most of us as ‘smart chat’. My original belief however was shaped earlier in 2023 which took it much further than chat. The shift in my vision took the impact a holistic vision of business benefit, social change and structural change. The model I had in mind is the British Industrial revolution which I covered earlier. There the shifts … Continue reading The Productivity Era

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IMF predict tougher recovery for world economy

Colin Henderson

The Global Financial Stability Report is issued usually annually. This issue has the sub text: Safeguarding Financial Stability amid High Inflation and Geopolitical Risk It is a long report and available at IMF. Here is the FT view. The IMF has warned of a “hard landing” for the global economy if persistently troublesome inflation keeps interest rates higher for longer and amplifies financial risks. On to the report. The beginning of IMF Executive Summary is reproduced here. It summarises at a high level although it leaves out some important aspects in particular the financial mismanagement of the failed banks; a … Continue reading IMF predict tougher recovery for world economy

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“The rich world’s housing crunch is far from over”

Colin Henderson

Finance & economics | Pain to come The rich world’s housing crunch is far from over | The Economist World housing analysis – The Economist Markets can be split into three camps: early adjusters, bullet-dodgers and slow movers At times during the long boom that followed the global financial crisis of 2007-09, it seemed as if house prices would never stop rising. Sales surged as a cocktail of ultra-low interest rates and supply shortages boosted competition for properties. Things are very different today. In countries across the rich world, from America to New Zealand, sales have cratered over the past … Continue reading “The rich world’s housing crunch is far from over”

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Business Outlook Turns Negative in Canada Amid Higher Rates

Colin Henderson

Inflation expectations fall in BoC surveys but remain too high Bloomberg report Canadian economy is properly responding to the interest rate increases. The tight labour market is expected to improve with impact of coming aggressive immigration increase policies. Snippets from Bloomberg article: The central bank’s business outlook indicator fell to -1.1 in the first quarter, from 0.1 previously. Firms expect slower sales growth for the fifth straight survey, due to higher interest rates, high inflation and concern about a recession. The data suggest the Bank of Canada’s aggressive rate increases over the past year are working to drag down inflation … Continue reading Business Outlook Turns Negative in Canada Amid Higher Rates

Economy, Japan

JAL imminent bankruptcy is yet another indication of a changing world economic landscape

Colin Henderson

I continue to be of the view that we are in the early stages of a revolutionary period and that the companys which survive will not be the ones that composed the DOW/ FTSE/ Nikkei indexes of the last 30 years. There is a shift occurring and the economic crisis is only a symptom, as global balances shift and move in ways we cannot even comprehend today. Anyhow, in related news, yet another bastion of the old economy is in dire straits. JAL (Japan Air Lines) began in 1951, first flew to San Francisco in 1954, and in 1987 became … Continue reading JAL imminent bankruptcy is yet another indication of a changing world economic landscape

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Bank tax, bonuses and unintended consequences

Colin Henderson

I was a little surprised to see the UK conservatives support a global bank tax. In any event the amount of the bonus at JP Morgan Chase caught my attention, so I took a look at their capital base. With tier 1 capital of $133 bn, the bonuses represent a significant 7% of capital. Ironically, the international tax will produce the unintended consequence of reducing capital even more., within the limitations of Basle. It is hard to see how a tax would improve governance and capital retention. Osborne to push for global bank levy George Osborne, shadow chancellor, said that … Continue reading Bank tax, bonuses and unintended consequences

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Biggest Contraction since 1921 | NIESR UK

Colin Henderson

This new piece of analysis from NIESR (UK) makes the point based on prior recessions, that 20 – 30 months are left, at a minimum, before we get close to where GDP was before this recession period began. This point gets lots when the only measurement that media speak of is the last quarters +/-. What matters is where we are relative to where we began, and there a long way to go. http://www.niesr.ac.uk/ Our monthly estimates of GDP suggest that output grew by 0.3 per cent in the three months ending in December, following on from a growth of … Continue reading Biggest Contraction since 1921 | NIESR UK

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Bank of Canada notes consumer credit remains a risk

Colin Henderson

Despite the general view that Canada and its banks is in relatively better condition that international peers, down side risks remain, and are relatively unchanged since Jun 2009. This statement sums that up, and introduces a key point about this crisis and how little has been done to prevent re-occurrence. Bank of Canada Financial System Review Despite notable improvement in funding markets, funding and liquidity constraints remain an important area of vulnerability. Should a negative shock occur, such as a renewed downturn in the global economy or a loss of investor confidence, funding and liquidity pressures would likely reappear relatively … Continue reading Bank of Canada notes consumer credit remains a risk

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‘The Shape of Business – The Next 10 years’ | CBI

Colin Henderson

Confederation of British Industry (CBI) have issued this paper. It is a short but useful discussion on what business ought to consider in the UK, but my reading suggests most western economies. It touches on the main categories of concern of business, people issues, environmental, partnerships, supply chain and technology Here is an excerpt from the Table of Contents, followed by the conclusion. Download: The shape of business – the next ten years (PDF 2MB) | CBI The Changing Business Environment Changing finance and capital conditions The decline of trust in business and markets A less benign macroeconomic environment Social … Continue reading ‘The Shape of Business – The Next 10 years’ | CBI

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“Rally fuelled by cheap money brings a sense of foreboding” | ft.com

Colin Henderson

Gillian Tett voices her concerns here, based on background discussions with bankers. We are not out of the woods yet, despite the equity markets. Rally fuelled by cheap money brings a sense of foreboding | FT Yet, if you talk at length to traders – or senior bankers – it seems that few truly believe that fundamentals alone explain this pattern. Instead, the real trigger is the amount of money that central bankers have poured into the system that is frantically seeking a home, because most banks simply do not want to use that cash to make loans. Hence, the … Continue reading “Rally fuelled by cheap money brings a sense of foreboding” | ft.com