COP27 is about the politics of global energy – energy being the lifeblood of growth and prosperity. The Ukraine war’s outcome is also about energy: can Europe withstand Russia’s General Winter and coordinated assaults on its’ economy and political stability.
Well, that was a fun week… but the UK’s travails are the tip of the iceberg of market pain facing the global economy. More political, geopolitical, liquidity and leverage driven crises are coming as markets reverse out the QE era. Don’t Panic!
Europe faces a crunch from energy and austerity, and is vulnerable to policy mistakes, disunity and disinformation
It’s too easy to write off Europe to the multiple threats of recession, low-growth, energy and inflation, but it has previously surprised us by its’ resilience! How will it fare with potential energy dislocation, fiscal and monetary risks and Russian disinformation? Can the Energy war be won?
The news looks bleak. A cataclysm of gloom is set to sink Europe and the UK – but, maybe things aren’t as bad as we think. Good news and a realisation things can get better could stabilize sentiment, and build a recovery base. Maybe?
Putin’s supposed cleverness haunts markets. How much harder will he squeeze Europe’s energy crisis? How will Russia change the geo-political order? Will Italy’s coming election be the crisis that breaks the Euro? We give Russia too much credit – it’s a weak nation that can only get weaker.
Central banks, inflation and recession are the visible risks, but what if we are looking at all the wrong things?
Everyone is balancing inflation, economic numbers and this week’s Jackson Hole Central Bank smooze-a-thon to guess markets. What if we are looking at the wrong things – and economic divergence, income and wealth inequality and unravelling domestic politics are the critical factors?
Winter is coming as soaring gas prices are set to bite across Europe. Putin’s energy insecurity strategy has proved his major success and could yet win him the Ukraine War. Stagflation is nailed on it Europe.
Lots of comment about imminent crisis in the ECB and European Bond Spreads. Relax. It’s a difficult circle to square, but the politics mean its more likely solutions will be found, and its buy Italy, Spain and Greece on the dips!
Dismal Politics, Crashing Markets, Inflation and Exogenous Shocks.. Excellent.. get your buying boots ready!
As we start a new week of dismal markets, depressing political news, rising inflation and lots of what next worries… relax.. the Sun will come up tomorrow. Not so sure about the economy though…
Markets and Geopolitics intersect in the Great Game being played in Ukraine. The West’s economies are diverging as a result of inflation shocks and looming recession. Divergence will play into Russian’s hands, and presents a clear market strategy: Buy Dollars and Sell Europe.