Americas and rest of world
Brazil
Not much to
say other than as expected not a lot was
different in the first few months and April and May were indeed relatively quiet months
I said June and July would be obviously dominated by a party
atmosphere and there may be bad stats but no one pays to much attention. The FT
said on 24th June “Love the football hate the economy”
After the event I thought that the people and government
would be briefly at one but there might be a sense of disappointment or
unrealistic expectations. Added to this there is a likelihood of some more poor
stats In July and August. And curiously although the stats were indeed bad the
voters weren’t objecting – investors were less happy.
I thought there was evidence to support the continued female
leadership in October and indeed Rousseff was returned.
I thought that by the end of November we would see a new
picture emerging, which is more responsible and challenging and indeed a new
team was picked with notably a new finance minister which despite the
difficulties faced was at least considered a positive step. 80% - A long was my biggest failure of the
2008-12 period!!
Real
As expected there was
more stability in the Real from February to Apil. I said don’t rule out another rate change and sure
enough there was a rise in late February and again in April.
I was wrong that the currency might rise in May and June. It
remained flat. Equally I was in error that July and August would be more
difficult – there was marginally more volatility but no change in the trend vs
currencies in general ( though in dollar terms everything was starting to
suffer)
September was indeed a good month, though this did not turn out to be a
long term trend.
I was right to note more interest rate changes in October (
after no change at all since the spring) but the direction continued at that
point to be upwards and there were huge fluctuations in the currency’s value.
I was however right that by the end of the year things had
settled down and the Real was in a more attractive position. 75% . Although my currency direction was
mixed my interest rate timing calls were spot on.
I expected some difficulty in January , what I interpreted
as protests was more in the nature of continued drug related violence. Policy
decisions caused inflation hit a eight month high in January but it was better
a month later and economically there were no more surprises in quarter 1 or
indeed April as I said
Overall I was ok on June and July noting there was an
opportunity to press forward with plans and the government did indeed make its
new police force a reality. Interestingly I noted that there may be
communications difficulties – this actually turned out to be the divesting of
assets by Carlos Slim’s América Móvil folloiwng tougher regulations! (This both shows the potential of this
forecasting and the limitations that lack of sufficient resources and time
impose on them)
I thought that there would be much less support for the government in September and
October- this turned out to be the impact of the missing kidnapped ( and
murdered) students,
I thought that the economic stats would be more positive
though and there were broad based improvements for the 3rd quarter.
There were positive signs at the end of the year and in
early January the president announced a series of policy actions. 65%
Mexican Peso
I correctly predicted just minor volatility in the currency for the
first four months.
I though the Peso would rise in May and it did though not as
much as I might have expected.
I was wrong to expect on balance positive movements in June
July though.
I nailed August expecting bigger movements – I was unsure of
direction- in fact the movements went in both directions during the month!
Although early September confirmed my expectations of rises
– I didn’t see these being reversed till October when in fact they were
reversed almost immediately. October and November were more mixed though.
Early November did show a peak but by the end of the month
the value had gone in completely the wrong direction though with the swing that
I did expect!!! Although given the wide
time orb this could reflect December’s forecast of a pull back. Nevertheless
could do better. 50% - No better than chance.
Argentina
After the major emerging market currency problems in January
2014 things did indeed calm down.
My only forecast country wise for the next two months was that it would be
indicative of the next couple of years.
In line with though not exactly what I forecast there were
ongoing difficulties for the leadership due to the debt holdout case in US in
June.
August was characterised by the “default” as the country was
unable to meet the court’s requirements so there was support for the government
in a way by the people as a whole. The Argentine people respected the strong
stance by their leader. And as expected there was not much change in September.
In the last quarter the bondholder situation continued to
overshadow everything else. Attempts to issue new bonds locally were relatively
unsuccessful. 60%
Argentine Peso
My January forecast was a joke. I predicted a decline in the
unofficial rate but no the official one. Wrong!
I was correct that by
Feb and March things would will calm down a little.
I was completely wrong about currency markets in April and
the Peso was no exception. While the peso did fall over the next quarter it
wasn’t anything like the decline in January.
Everything seemed to have happened in January and that is
far outside my time orb. I don’t yet have an explanation for this.
It is also difficult to assess these forecasts in the second
half of the year as the greatest mover was the dollar and so many currencies
have behaved in one way vs the dollar and another gainst other currencies such
as Sterling. I’ve generally used
Sterling as a comparison as it was more stable but you could argue that I
should use the dollar which gives different results!
I was more accurate with my forecast that things would
change in July and August and also that there would be little happening in
October. But there was no particular
weakness in September.
I was also wrong about declines at the end of the year (but
right that there would be changes coming from government though restrictions
would still remain. 50%
Venezuela
I thought the period January to April 2014 would be
moderately ok. But protests began in January and continued due to food shortages.
I thought May might be easier and it was as the protests
reduced though this was not quite what I was expecting.
I said that by July the focus would be on financial structures and
sure enough there was promise of a gradual
convergence of various exchange rates.
I also thought that by September the would be more
difficulties and restrictions and this was so with talk of default despite oil
reserves.
I further though t that things would be more difficult by October and
thus might come to a head in the last 2 months and this turned out to be the
case due to the knock-on effects of the falling oil price. 75%
Bolivar
With the official
rate being of little consequence and such a disparity with the local rates it
is difficult to measure my effectiveness here.
I thought there was a
risk of another devaluation in January and this happened though only in one of
the government rates ( for those travelling abroad etc)
I thought that March and April might be marginally better months, but still with a huge impetus for a radical
revamp. However it was worse than that on the unofficial market with the
biggest fall in a year at the end of March.
I forecast increased pressure between May and August and
devaluation in August. This wasn’t the case officially but the unofficial rate
fell to a record low against the dollar at the end of the month and again in
September.
But as expected the
situation hadn’t improved for the people
in the last months, I said with hyperinflation looking likely ( in fact the
unofficial rate collapsed by 60% between November and December. I thought that there would be so much
pressure on the old currency that a decision on its future needs to be taken
and sure enough in a press
conference held on 30 December, Maduro announced that the current exchange rate
system would be overhauled sometime in 2015.
80% ( difficulty to permit a higher score when there are so many rates)
January ‘s forecast was for upsets in government again and certainly there was talk that senate
scandals would affect the leader’s re-election prospects.
As expected though things moved back to focus on the economy
, with worries about house prices
I expected some shocks around May and June but although
there were concerns about rising inflation and job losses there weren’t real
shocks. I was correct that energy sources would be key with Canada
approving a new pipeline.
I thought that quarter 3 would be without many worries and was
in fact just quiet with positive jobs news late in the quarter.
The oil market started to have an impact by quarter 4
There was a parliament attack ( domestic extremists) in October confirming my prediction of
political challenges and changes though not quite in the manner I expected .
Interestingly I also suggested the focus may be on female involvement at this
time and the women’s history month was devoted to the growing force of women in
business. A coincidence maybe but an
interesting one.
December was as expected just a continuation with no
particular departure from what had gone before. The C$ remained more or less in
line with sterling throughout the year.
70% ( not eventful enough to justify much more)
USA
I don’t think I did very well on US and yet I didn‘t do
badly either. It is just that the nature of events was rather different to my
expectations but the timing was right. I have a feeling 2015 will vindicate
some my statements even though they didn’t have such an impact in 2014.
As I forecast quarter 1 2014 was negative for the US with
declining GDP and debt was indeed a worry with the ceiling increased again in
February. There were even earthquake concerns as I suggested following some in
California in March.
But I expected the president to face internal difficulties
in the second quarter though and there was nothing out of the ordinary – the
problems were all foreign ( Russia and IS)
I thought there would be continued instability through
August and September and there was. Late
August provided another earthquake in California. There was instability of a
different type caused by the protests falling the killing of Michael Brown in
Ferguson. There was for a while a danger this could escalate and spread. Economically I thought there would be equal
uncertainty and plans to increase interest rates were put on hold by weak jobs
data.
October was economically positive as expected , November
showed quarter 3 stats confirming that Q1 was a blip in ongoing growth. And QE
came to an end as promised.
Obama did meet resistance in November for the immigration
plans and there was more trouble in Ferguson.
The year was also characterised by a number of cyber security
breaches which perhaps account for some of the instability I could see. This
issue may be about to get worse as indeed may the riot issues and maybe even
the quakes. 75% ( right timing,
wrong conclusions)
US$
My US $ forecast was all over the place for the first time
since I started looking at it in 1998.
There were no dramatic movements in February and although
the currency was not strong in the first 6 months it didn’t really show much
weakness either.
The dollar started to strengthen in July and continued to do
so with only a few minor blips for the rest of the year.
At least I was right that September was positive ! But that
was about it really. There was most
definitely no depreciation in the last months of the year.!!! 20% dire
Dow
The market forecasts weren’t great either. It started well
with weakness in late January but then it all went horribly wrong.
Basically the index rose during the whole period to July–
there was neither significant volatility or weakness. There was some pull back
in late July early August but nothing like I suggested.
At least I was closer in September and October with as I
described a lack of conviction and even a pull back which lasted until towards
the end of October.
I was right to see a change of mood in November but was
completely wrong about direction; the market rose slowly but consistently
throughout the month.
December was more difficult with big swings but unlike I
thought we reached an all time high. 40%
Nasdaq
I did a bit better with the Nasdaq which although it rose in
February March was indeed subdued into May.
I was one month out ( acceptable as I’ve explained many
times for these types of forecasts) as the market started to rise again in June
rather than July. But overall I was close enough for the period to August.
There was a shift in sentiment in September as there was
some switching to more defensive stocks, though perhaps it wasn’t as great as I
expected. Perhaps what I could see had more to do with the efforts against
cyber attacks etc.
I did better in quarter 4 too. I expected more difficulties
from the external environment leading to fluctuations rather than new lows and this proved correct with a drop in October
followed by recovery and an uncertain December
80%
Australia
As expected the new leadership was not enjoying support by the
first months of 2014, unemployment was a at a 10 year high and there was talk
of a wave of privatizations; pretty much what I thought.
March to June saw the introduction of austerity measures and
as expected resistance in the form of student protests. There was no change in
the bank rate till August though. My remark about communications was also
correct as May saw the announcement
of a review of the spectrum policy among other things and there were plans to
review media ownership laws.
I expected June to be more positive and stats (released in
early September however) showed the economy slowed less than expected in the
June quarter.
July surprisingly did show signs of recovery with growth in
resource exports but property appeared to remain strong ( although I suggested
this might be a turning point so perhaps it wouldn’t be reflected in stats yet)
While my comment that August suggested everything was rosy
was probably over egging it- certainly there were less worries at this point
than at the beginning of the year.
My forecast for the next couple of months was right. No real
change but worries ( reflected in the exchange rate) as the oil price changes
reflected the end of commodities demand.
November did indeed start to show a change in sentiment in
housing everywhere but Sydney.
As expected December didn’t really show much change in any
trends, as Australians started their holiday season anyway. 80%
South Africa
Platinum strikes started again as expected in (late January
rather than February ) and didn’t abate till late March negotiations and in
some areas still dragged on after this.
I was also correct to predict no change in government at the
May elections
As anticipated there was another strike in July (metalworkers)
which was resolved by the end of the month but despite it all the country
narrowly escaped dip into recession.
Things were basically
unchanged in the period to October perhaps it was a little calmer than I
anticipated. But things has been going on behind the scenes as November saw a
different type of problem with union splits undermining power. The falling commodity prices were also
starting to affect the country.
There was a change of emphasis in December and announcements
that progress was being made in fighting Aids confirmed my views that the
emphasis would be on the population but I wasn’t completely accurate in my
assessment of why. 85%
Rand
I was wrong in my forecast that March and April would see
another dramatic change in value of the Rand- fluctuations was all that
happened.
There was however weakness in May and June. July was better
again as expected but with no
improvement in the trend.
While early September
saw another fall the Rand then started to show one trend vs US$ and
another vs other currencies.
It was fairly flat vs the dollar in the October and
November, falling only to a low in December. Against Sterling it actually
strengthened in November and was merely volatile in December.
The Rand has made me understand the issues I’ve had with
currency forecasts in 2014. Looking at them independently is difficult unless
one currency remains stable to measure them against. This didn’t really happen
in 2014 with the result that only looking at pairs would have worked. 25%
Saudi Arabia
While it is difficult to confirm my more general long term
themes it was true that there were more pressures to broaden
women rights in the first quarter
I was correct about the more general background themes with
meetings with US and an attempt to combat wider threats in the region with
closer ties with Iran
The power issues ( so far as I know) in June and July were
confirmed to the regional issues sending troops to the Iraq border.. The
country also opened its stock exchange to external investors
October and November were dominated by oil price falls and
Saudi lack of interest in cutting production rather confirming my view of the
mood for that period by still holding
many cards in the oil market
December did have women to the fore with 2 arrested for
driving and held throughout the month
But of course all this pales into insignificance compared
with my statement re early 2015 change of leader . Best call ever! 90%
Iran
I was correct to forecast difficulties for the leadership in
the first quarter with protests and complaints about the food distribution
programme in February. The impact of continued high (near 40% ) inflation was
indeed dominating the economic situation.
There was indeed focus on nuclear matters in April May with
a pivotal point of negotiations reached mid May. And I was correct to see that
there may be some progress with Iran starting to break down barriers with Saudi
Turkey etc and the closer ties with the US needed to stop the ISIS threat
I was also right to note that not all this would be
successful due to Iran’s hard talk approach and of course Saudi relations did
not really improve at all! And the US nuclear talks were extended.
By August though there was some support for the improvements
to date made by the leadership. All in all there were positive signs in
September as expected- funny how the situation can change due to other
elements.
By the last 3 months the inflation situation had improved a
bit (20%) and the leadership was managing internal faction sin regard to the
nuclear issues. But all was not perfect and
talks were again extended….
85% better than I would have expected.
Israel
Of course Israel
continued as Israel does in quarter 1. Attempts at peace deals went the
way they usually do
.What I saw as better starred government was however the
attempts at unity between the palestinian groups which most definitely did not
meet with delight from Israel itself. Indeed the aggression I forecast for
early August started earlier against Gaza.
At the end of August Israel made its biggest land grab in
years. And continued fighting on various fronts continued.
I thought the outcome looked to be difficult for the leadership
in October– suggesting they have overplayed their hand and reports were that
Israel US relations had hit a new low.
The situation did calm down them in the next month but the impact on an already slowing economy
was proving problematic.
The coalition collapsed in early December and things were
indeed effectively on hold as an election was called. 80%
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