Covid-19: The Impacts and the Outlook
In December 2020 we hosted an online webinar for clients where we outlined our views of the financial impact of Covid-19 and the outlook for the immediate future.
In December 2020 we hosted an online webinar for clients where we outlined our views of the financial impact of Covid-19 and the outlook for the immediate future.
In March 2019 we presented an update to clients, covering the continuing global trade war and the impact of Brexit on the UK (and global) economy.
In March 2018 we presented to clients on the major issues in financial markets, including the escalation of the trade war between the US and China.
In March 2017 we presented an update to clients which covered the major issues impacting financial markets, including the election of President Trump and signs that the US economy is overheating.
In this edition of Points of Interest, we discuss the very poor performance of global stock markets over the previous three-month period, which saw the US stock market suffer its worst six-month return since 1970. We expect market volatility to be high for at least six to twelve months, until there is greater clarity around the direction of interest rates.
In this edition of Points of Interest, we again discuss the potential impact of rising inflation and interest rates. Stock markets have reacted poorly to the prospect of significantly higher interest rates, with steep falls on all major markets.
In this edition of Points of Interest, we review the major economic and financial events of 2021, where the impact of the pandemic was again the most significant factor. We also look ahead to 2022, where we see rising interest rates as being a potential issue for the stock market in coming months.
In this edition of Points of Interest, we discuss the Chinese property market, where concerns over developer Evergrande are causing problems for financial markets. We also consider the inflationary pressures that are building in the global economy. At this stage it is not clear if inflation will be transitory or here to stay, with differing outcomes for financial markets.
In this edition of Points of Interest, we discuss the impact of the pandemic and falling fertility levels on population growth in Australia. We also consider the shift to ‘work from home’ and the impact on the commercial property sector.
This article, by Justin Baiocchi, was originally published in The Northern Daily Leader on 17 June 2017.
My hunt for a new car has finally come to an end, after I recently handed a local dealer a cheque only slightly smaller than the annual budget of some African nations. To say that I am relieved that the process is over, is a huge understatement. I find the entire car buying experience to be a thoroughly unenjoyable one. There’s that nagging sense that you’re paying way more than you really should. Also, the uncertainty of whether you’re just going to end up the proud owner of a lemon. Worst of all of course, is the feeling that you need to haggle for the best deal, or else you’re simply a fool who deserves to be taken advantage of. I really don’t want the pressure of having to negotiate the best possible deal, always wondering if you could have paid less. That said, on this particular occasion I was determined to drive a hard bargain – I would be merciless in screwing down the salesman on price. No quarter would be asked, and none would be given. I was brutal in my bargaining tactics and had the salesman practically begging for mercy – at which point I made my demands and watched him cave in and give me a free set of floor mats. My feelings of euphoria in such a fine negotiating victory were only slightly marred by the sound of champagne corks popping in the background as I left the dealership.
The problem with buying a car is the issue of asymmetrical information. This occurs where one party to a transaction (the car salesman in this case), has more or better information than the other (me, the ignorant would-be car buyer). Nobel prize-winning economist George Akerlof highlighted this problem in a 2001 research paper which showed that asymmetric information in the used car market drives down the quality of cars on offer, until all that is for sale are lemons. The same problem of asymmetrical information also exists within the stock market, where parties with varying levels of information trade with each other. In some instances, the seller could be a director who knows that the company is struggling and is looking to offload their shares. Technically this is illegal, but let’s not kid ourselves that it doesn’t happen. In such a scenario, you end up paying more than the shares are worth, while the seller makes an outsized gain. Such an outcome pushes up costs and reduces the overall efficiency of the market. Unfortunately, the issue of asymmetrical information can’t be avoided, it can only be managed through extensive research and due diligence. Something I should have done before handing across my over-sized cheque.