Examining economic and financial prospects within a global credit context
What is EP?
Economic Perspectives is a UK-based consultancy, directed by Dr Peter Warburton. Formed in 1996, the company offers independent thinking and perspectives on global macroeconomic and financial issues that are topical and relevant to investors and decision-makers in business.
Our consultancy has a strong empirical focus, interpreting recent economic and financial developments with a view to providing excellent insight to clients.
What do we do?
Our flagship global publications are quarterly Global Credit Perspective and Global Inflation Perspective. In Global Inflation Heat Maps, we keep a monthly check on global inflation developments. A concise summary of our research ideas can be found in the monthly Global Research Digest. There is also a UK Economic Perspective that is published 6 times annually.
Economic Perspectives supplies forecasts for the UK economy to HM Treasury and to Consensus Economics Inc.; and was ranked 7th out of 39 forecasting groups according to a Sunday Times evaluation of 2010 forecasts. The company was ranked 1st in the 2009 competition.
Our clients are drawn mainly from the financial and media sectors in the UK and US.
It is our confident expectation that 2013 will be a turbulent year for bonds and exchange rates.
Five themes for 2013
• the official explanation for generationally low nominal bond yields is deeply flawed – The demand for bonds that has driven down yields is the product of bond market leverage, positive yield curve carry and forward guidance on policy interest rates, rather than a glut of global savings. Every attempt to tighten monetary policy is likely to be profoundly disruptive to bond yields in 2013.
• the behaviour of currency volatility in the light of bond market vulnerability and discordant monetary policies around the world - Although all advanced nations face similar economic challenges, their policy responses have very different designs and shapes. The rise of Japanese and Chinese nationalism is likely to accentuate currency pressures.
• the gathering momentum of localisation and regionalisation over globalisation and the transfer of economic advantage from the anonymous outsider to a defined group of insiders - While slowing in the Euro area and Chinese economies was a significant factor contributing to the disappointment in world export volumes last year, there are deeper forces at work in the suppression of world trade.
• the ongoing socialisation of unrepayable private sector debts and associated infusions of public money.
• our expectation that bad debts will congregate on government and central bank balance sheets, particularly the ECB balance sheet.
(extract from the Economic Perspectives’ publication Global Research Digest – January 2013 edition)