Wednesday 14 August 2019

September and October could be fun

- Chinese Industrial output at 17 year low

- Germany therefore heading into recession (I don't think many realise just how tied to China the German economy has become)

- US Trade War still fun

- Brexit issues

- Hong Kong on edge of a crackdown

- Argentina defaulting

So overall, a right pretty face for the world economy. Markets as we often say find ways of tanking in September and October if they are going too. This yeas, how do they not find a way!

Equally, a recession with real interest rates at such low levels will be very strange indeed with hard to predict outcomes. For a domestic example, short supply of UK Houses coupled with huge mortgage availability and low rates will stop a very over-inflated market from falling very far. Which in terms means the mortgage supply won't be turned off - so a very limited impact.


James Higham said...

Who can afford a mortgage now?

Anonymous said...

How is Germany's economy so tied to China - at least compared to our economy?

Anomalous Cowshed said...


Curiously, a perceived potential fall in house prices might cause a rise in supply; sellers become incentivised(? - is this a word) to take profits now, so the total number of transactions rises, until the market bottoms out naturally, or approaches a hard floor - the point where each seller hits their own perceived equity value and decides to withdraw from the market. In this scenario, mortgage rates have bugger all to do with it.

DJK said...

"Chinese Industrial output at 17 year low". Surely, the rate of growth of Chinese Industrial output at a 17 year low.

No Middle East tensions listed, but I suppose a regional outbreak of peace and brotherly love would be the abnormal event.

Bill Quango MP said...

I can confirm that the market is at the very peak it can possibly be.

This is backed up by the hard data, that is, I have just sold my house.
And for the last four times I have done that, I have exchanged on the very day that the housing market begins to tumble.
So ensuring I have paid way over the odds for property , and way too much homeowner tax.

For those who wish to know, you have about three weeks left until the collapse begins.

Anonymous said...

The only objective way to know if the market has peaked is if Henkel have made a large acquisition.

Bloke in Callao said...

Well, at least the world has plenty of experience of dealing with a default by Argentina.