NEWS, VIEWS & TRUTHS

NEWS, VIEWS & TRUTHS (11TH FEB – 15TH FEB)

It’s that time of the week again folks and it feels like time has absolutely flown – I simply must be having far too much fun!  Welcome to News, Views and Truths.

So, Valentine’s Day. Did you remember? Did you forget? Are you being punished because you forgot?  

Naturally, this week’s end-of-blog playlist is for all the lovers in the house; would you expect anything different?  And although St. Valentine in the UK is the patron saint of card sellers, rose growers and chocolate manufacturers, he is perceived differently across the globe.

In Japan, the custom is that only women give chocolates to men.  However, that is thought to have resulted from a marketing executive’s error in 1958 during one particular marketing campaign.  In particular, it is the role of the female office worker to hand out chocolates to their co-workers, known as giri-choko (literally chocolate obligation).  Further to this, unpopular co-workers receive cho-giri-chocko or cheap chocolate.  The Japanese are harsh.

St. Valentine’s Day is big business; just under half of the population spend money on cards and gifts, totalling around £1.3bn and an estimated 25 million cards being sent.

However, even that injection cannot stop the economic output slide, particularly across the eurozone.  This week, Q4 2018 GDP figures were released from across all developed economies, highlighting a definite reduction in productivity.  And no doubt you would have heard the glee in the voices of newsreaders on EVERY SINGLE CHANNEL pronouncing the Brexit-induced economic destruction of this fair isle.

As your weekly seeker of truth and justice, it is my job to show you the facts.  Below we have the UK, eurozone and G7 GDP data, showing the % changes relative to the previous quarter.

On this basis, the UK’s GDP growth has matched or beaten that in the eurozone in each of the last three quarters. If the UK is indeed stuck in ‘the slow lane’, it’s hardly alone, and Germany and Italy appear to have pulled off the road completely.

And further to this, eurozone inflation is falling, down to 1.6% which is the lowest for 8 months.  

Now, you may be reading this in your post-Valentine bliss, thinking “Bloody hell Andrew, that’s not looking good.”  Well, let me put you straight.

In this post-financial crisis world where Central Banks will do “whatever it takes”, there is a great likelihood that this economic slowdown will be a catalyst for them to step in.  And by that, I mean print money, just like they did in every year following the 2008 credit crisis. And printing money creates massive amounts of liquidity which creates a positive environment for risk assets.

Which increases investors returns.  So, watch out for the headlines in coming weeks when the ECB announces a re-introduction of their Quantitative Easing programme.  Or don’t and simply read it here when I talk about it. Think of it as a community service.

As promised, a playlist created for all the lovers.  Have a great weekend and I shall see you all next week!


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