Review at 31 October 2018 ( Warning - LONG POST)
The picture this time is of me, accidentally embodying the Zoroastrian god. Don't ever ignore the signs or underestimate the universe
Clearly some months have elapsed since my last post. Once
again life has been hectic and I apologise. In any case it does give me the
chance to review a larger chunk and to comment on some of the more recent
interesting events, Saudi, Iran, Brazil’s government and Italy’s economic strategy are the ones that spring to
mind.
UK
Although it is difficult to assess the remark about long
term (30yr) changes in April the
inflationary pressure prediction was confirmed due to the oil/energy price
increases.
I said that June through to August would be a time when
there is opposition to the leadership and that there would be some very
challenging undercurrents. There was certainly opposition to the prime minister
though there was perhaps less impact from the people than I would have
expected.
My overall forecast was for some progress but being bogged
down in details which well sums up the Brexit situation.
Pretty accurate overall
£
May was as forecast mixed. June to August were predicted to be are more
eventful and a difficult one for Sterling investors and sure enough against the
Euro and dollar for example the currency declined throughout this period.
However I expected that September and October would be challenging the value of the
currency, but in fact the currency made some recovery at this time though this
was more a reflection of challenges elsewhere than benefits to Sterling. There
was the expected volatility though.
Forecast Ok but not as good as I would have hoped
FTSE
I forecast increased values in April, which was the
case, but a less clear period to July
with focus on constituents and little trend,
again correct
I said in August to October things are more challenging.
While there is no sign of noticeable falls, there will be problems and this has
been the case though my forecast of tech issues has been realised more in terms
of tech valuations that known incidents.
Pretty accurate again.
I did less well with the Euro, there was less pressure on
its foundations than I expected in the period meaning although the values were
maintained in the summer there was less pressure and as a result more decline
in the early autumn than I expected, though overall we are talking small
movements anyway.
Mediocre forecast
I thought that March and April would see country and
leadership aligned but although Macron’s support remained higher than previous
incumbents it was declining from the high of 62 percent in May 2017 to
44%.
I thought the greatest theme over the summer would be the
beginnings of changes that represent the end of a long cycle. Certainly there
were issues In relation to the European budget and it is too early to confirm
whether I am correct that this is part of a longer term issue.
Average – better than chance but too early to tell on the
wider stuff
I expected March to May to be more mixed but there would be questions where
the country is heading.
I saw real
dissatisfaction, but I attributed this mainly to debt or banking matters and it
seems the issues are more complex. Accoriding to Bloomberg (2 October) globalization and changing technology
are threatening to bring deep structural changes to the tradition-bound
country, where not everybody has benefited equally from the upswing, and an
influx of refugees in 2015 flushed nationalist sentiment into the open
I also saw October as not significant although unsettling,
perhaps missing Mrs Merkels longer term decision, although understandable as
there is no actual change yet.
Ok. Again longer terms stuff is difficult to assess
Spain
I saw background positive sentiment in Spain through to June
and indeed economically things were better and the
Catalan issue receded further for the time being.
I expected a tricky
time for the leadership- and sure enough there was a vote of no confidence in
May.
I thought that the longer term economic outlook might be
questionable though and there were signs that the recent rapid growth might be
peaking.
Pretty good.
Italy
I said in my forecast that April and May would see the
beginning of a new very long term phase ( decades) and the Guardian said in May
The result: two lost economic decades in which living
standards have stagnated, which is why Italy ... was
prevented from recapitalising its banking system, and the Italian economy
stagnated for a decade.
I also said that the two months themselves would be quite
difficult, and one of the most confrontational times of the 4 year period. Right
on schedule there was a new political crisis ending with a new government. And of course there were the expected strikes.
I thought that although the country would remain edgy,
things would calm down a lot by June and July and this was the case and as a
result I was right that August and September would be better.
I said that in October and November there would be a real
effort to make economic changes and the chances of success are better. There have
been clashes with the EU and even though things have calmed down a bit Italy is
in danger of going down the spend (in
contravention of the rules) and be damned route. So the short term may look betterbut
the medium term and longer term look like they could be one of the 2019-20 problem
triggers
A good forecast.
Italy rarely disappoints!
Greece
I was right about more protests in April May. Though they
seem to have been more peaceful than I might have expected.
I though that July to September would just
see a continuation of the themes
of the year.
Unsurprisingly, I was right that there would be a lot of
concern about long term recessionary conditions but the end of the bailout in
August was otherwise quite uneventful. I still have to wonder what is going on
behind the scenes financially.
I thought that by the end of the 3 months to September there
may be renewed enthusiasm at government level and to some extent that is so. However
let’s see what the next months bring.
Reasonable forecast but not great.
Ireland
I correctly expected the period to April to be positive.
But I did say that May to July could see some
dissatisfaction amongst the population but this really wasn’t noticeable.
I thought that there would be some surprising economic
shifts later in the period and the growth forecasts were recently doubled.
OK but nothing special. Always difficult to forecast not a
lot happening,
Switzerland
As usual I forecast little worth mentioning for Switzerland
and it continued to pootle along albeit more moderately in the latter few
months.
Average prediction
Iceland
Overall I predicted a moderately positive period for Iceland
too with little really to say.
And in fact “After a period of robust growth, Iceland's
economy is slowing down according to an economic outlook for the years 2018” but all is ok.
Average again
US
I expected April through Juneto be somewhat more harmonious but some of the challenges of
September/October 2017 ( typo in original said 2016) to return. There were issues relating to the
ongoing investigation and a resurgence of issues re Syria/ME but nothing too great.
There was alos opposition to the separation of immigrant children in late June,
but overall a less difficult time.
I expected July to see little
change to this but some evidence of financial discipline. This was when tariffs
on China came into effect.
I thought August would be a
rather an odd month. I said “while there are no changes to the themes of the
preceding months, there is a sign of a short sharp challenging event. Is this
an internal dispute, or attack, or is the US the initiator? I’d almost be inclined to suggest the latter
as other conditions are more benign. In fact the US re-imposed sanctions on
Iran, removed security clearance from a previous CIA director and two Trump allies
( Cohen and Manafort) were guilty of financial crimes. But the overall climate
in the country did remain calm.
For October and November I had
a sense of underlying disruption. I
though the conditions might be financial in nature – trouble servicing the
debt? In fact they have been mainly violence related not to mention the
hurricane in Florida or the awkward Saudi situation. And tomorrow is the mid-term elections.
This did
however obscure the fact that the deficit rose 17% to the highest level since
2012 so I was right, I merely got my news priorities wrong!
Moderate- nothing wrong but could have pinpointed things better
US$
I thought that April would see the dollar at best as depressed and so it proved
– the period around March and April being a bottom in the index.
However I thought that June to August would see more
leadership challenges and even less faith in the core value of the
currency. In fact the dollar made some
recovery in this period. However we must remember that this was after a rate
rise in May. Maybe I wasn’t so far off the mark.
For September I said there wasn’t much change “ a lot of policy work going on, adjusting
interest rates, trying to reassure investors etc.” and lo and behold we had
another interest rate rise. And as I said “to some extent it seems to be
working”
But I expected more difficulties in October yet despite the
deficit there have been no shocks to the dollar index. On the other hand the
markets have shifted and gold risen so there is something happening.
Difficult to assess forecast : maybe better than a first
seems the case.
Dow
I thought there would be a switch of mood over the summer. And while I didn’t suggest
selling I thought that it just felt like the market would lose its way a little
over the summer. This was a good assessment, although values continued up there
were increasing doubts.
However I thought that the period to September could see
some falls and that wasn’t the case. Though it did top out by September.
I thought that October would also see falls though and this
time I was right with a 5% drop over the month.
Moderately ok forecast
Nasdaq
I forecast a return to glitch and switch ( in index components)
territory in March to May. I said “There is
quite a challenging situation which might lead to suspension or
restriction of trading briefly. But it doesn’t last long as we see a return to
optimism quickly.” On 25th April
The New York Stock Exchange suspended trading in the shares of five
Nasdaq-listed companies including Google-parent Alphabet and Amazon due to a
what it referred to as "a price scale code' issue. Possibly as a result of
a tech upgrade.
I love it when a forecast comes together!
I predicted a mixed
bag in June through August. Perhaps because of the time of year, there does not
seem to be any particular direction then. In fact the index did rise a bit but
given previous momentum this was a good call.
However I didn’t get October right as although I could see
difficulties with the image of the market I thought that public confidence
would remain high and there would be rises. In retrospect I may have been right
in terms of what is happening- professional investors leaving while public buy
but I can’t deny that I got the overall value trend wrong.
Doing great then fell at last hurdle!
Canada
Perhaps it was too extreme to state that there might be
divergence between people and leadership – this is Canada after all- but there
was certainly less enthusiasm for the leader. However more noticeable is the
reduced affinity with the US and how that may create divergence within the
country. The trade issues with US are particularly concerning…
The period was definitely a turning point in housing ( and
thus debt etc) and the prices stagnated.
June and July, although seeing a cooled economy, was better
than expected in line with the more
relaxed mood predicted.
I thought that September and October would see the people
somewhat unsettled and perhaps feeling deceived in some way. There could be
adjustments to communications and to rates.
Financial issues would continue to raise budget questions but not to be
too challenging.
It seems that issues relating to energy/carbon taxes are dominating and causing problems for the
leadership as well as matters relating to banking data. Things are no so rosy,
but neither are they too serious.
Ok – but details weren’t specific enough
Australia
I thought March to May likely to be a particularly good time for the leadership.
There would still be a significant
amount of optimism and drive. Certainly the economy continued to growth and the
government won by elections etc.
I also said that- floods may also characterise this period
and in March a state of disaster was declared in Queeenland due to flooding then in May there were also heavy rains in
Tasmania
Despite the general strength of the government I commented
that “Changes within parties may also alter the emphasis within government.” The timing was a little later than I expected
with the split in August rather than June but the prediction remains valid as
it identified what is quiet an unusual political situation .
I correctly thought that June to August would still see much that looks positive depite
issues relating to extraction ( the mining sector continued to be in a trough) and the countries identity continuing ( racial issues continued to be more of an
issue)as well as the continued support for the government ( generally yes,
despite the change at the top).
I thought that September and October would see the people of
the country take centre stage. In fact there is increasing pessimism about the
end of the long economic growth trend.
The feeling is that it is the disruptions within government that are making the
future direction uncertain.
South Africa
I thought March to May would be a better time in most
respects for both the people and the government because adjustments within the
leadership to improve the foundations of the country. And of course the change in head in February
made this correct.
I thought June to August would continue the trends. However
I thought that the economic indicators would improve. However GDP declined and the unemployment rate has risen
noticeably throughout the year.
I thought that September and October would be similar but the
leadership have renewed dynamism to harness change in the economy. To some extent
this is the case as the problems are being discussed but whether this will lead
to anything positive remains a moot point.
Forecast average- a
bit better than change but not much.
Mexico
The economy in March to May appeared broadly to be ok though
later growth was revised down in line with the confusions that I suggested.
But more significantly I noted the likely impact of US
policies and related restriction of people etc and in April there were refusals
for migrants crossing which by June had become the US separation of families
policy that was ultimately reversed.
I also said that there might be a brief spell of severe
difficulty for the people, perhaps relating to the drug cartels or other
threats ( no surprises). The whole of the first half of the year saw 1000s
dying but this period was noticeable for the deaths of over 100 politicians in
the run up to the election.
I thought that June to August would see a shift in emphasis
for the people and the new president in July supports that. I thought there may be upsets to industry and
other economic activity and oil and industrial output fell.
I expected major turning points at the end of September but
this is obviously one of those cases where we need longer to confirm that such
points have occurred.
Good predictions re US border, average re economy
Peso
I thought March to May would be better value wise. As
uncertainty was lifted for a while. This proved true for all but the end of May
( so within bounds of forecast accuracy)
However I though that June to August may be one of the better
times with a small upturn in value. But the currency actually fell prior the
election. It did however recover after the election through into August, so
only the exact timing was out.
However as I expected September and October, saw the old
conditions resurfacing, with the currency falling especially in October.
Good but timing could have been more precise.
Brazil
I thought that March to May would see the issue of
leadership corruption and weakness return- and in fact there was much talk as
Lula planned to stand for election again and there was much dissatisfaction
with the acting president.
I also didn’t see much progress economically even if there was
the odd snippet of positive news. The economy was ambling along after showing
its best performance for a few years but by end of June forecasts had been
revised down again.
I thought that September and October looked tricky again for
the leadership –and Lula was banned from standing in the election.. I thought that there was no clear indicator of
change and that likely the president
will continue but perhaps weakened further. But Temer the acting president was
not standing so some change was inevitable and there was a decided shift the
right.
However I did see evidence of economic measures improving but this seems probably to have been optimism
about the new leadership rather than anything concrete. We shall see.
Forecast ok, but not great
Real
I though March to May Real values were mixed and difficult
to assess. The currency weakened slightly but not significantly over the
period. However there were few of the short term swings I expected.
I expected June to August to be more extreme with some shocks
and likely a key longer term reversal. There was certainly more volatility
especially in August and with a sharp fall at one point.
But in September and October I thought it likely that
positive expectation will overcome much of the negativity. There was a
significant reversal of the August fall and late October saw the best position
since April although still on the downward trend line as I expected.
Venezuela
March to May was as expected a critical time. The election
was held but under as many clouds as I expected. As anticipated there were some
dodgy tactics including arrests which led some opponents not to mention vast
amounts of the international community to reject the result. However Maduro was
re-elected.
It is not surprising then that I saw the following period as
a continuation and a tug of war between two possible directions of leadership. I did think there may be some short term good
news economically, although in reality this turned out to be just the new plan
giving a brief hiatus to the continued financial problems.
I also, unsurprisingly, correctly expected September and
October to be more of the same
Bolivar
I predicted that March to May would see the Bolivar downward
trend continuing but that there may be some surprises. And this was true, as
the currency declined Maduro announced plans to create a new one.
I saw this becoming concrete in June to august with a
fundamental change to the currency. This happened.
While I said that September and October would show hints of
the future, the picture is still emerging and we will know more by end of year.
Another good forecast – few marks for continued devaluations
but lots for the timing of the changes
Argentina
I expected March to May to be relatively positive for the
leadership and economic news and this was the OECD report at May
The gradual
reduction of the high fiscal deficit is being accelerated to restore
confidence. Recent structural reforms, such as a tax and capital market
reforms, a new competition law, improvements in administrative procedures and
lower trade barriers in selected sectors are welcome steps to strengthen
inclusive growth. Further reforms to foster the integration into the global
economy, enhance competition and improve access to quality education could
build on this progress.
However I suspected there would be difficulties too.
I expected currency effects in June to August ( and referred
the reader to the Peso forecast), this proved to be totally on the money.
I then highlighted September
and October as key turning points with
fast changes and so it seems to have been proved.
Peso
I went for significant inflationary tendencies for March to
May and this turned out to be spot on.
I said that June to august would likely be the most fundamental
period of the 4 years for the currency. By the end of August the Peso had
dropped to a record law.
I thought September and October are similar though somewhat
moderated and there may be interest rate adaptations and debt ( funds flows). This was an understatement as rates rose to
60% to attract investment. This appeared to work in stabilising the Peso as I
anticipated but it remains to be seen what this will do in the longer term.
Excellent forecast.
China
I expected May to July to herald a change of pace and
although growth stats remain strong there was sign of less aggressive growth.
I said that some economic shocks ( possibly external) may manifest perfectly
timing the US tariff announcement.
I also expected some misinformation about or deception by
the leadership, and a risk of problems spilling into aggression albeit mild-
“aggression” was the term actually used for China’s activities in the South
China Sea at this time
My forecast for August and September was to continue the
theme of May to July, with “ the economic issues and perhaps the balance with
the US needing attention” the tariff
situation escalated. A further
tariff on $200 billion of Chinese goods went into effect on September 24,[5] to which China responded with tariffs on
$60 billion of US goods.
October I thought would see a “key turning point” and on the
one hand stats showed an economy weakening
much faster than expected, on the other
relations with Japan saw a shift actually described as a “historic turning point”. Don’t you just love this stuff!
An excellent forecast
Renminbi
I expected little action in the value of the currency March
to May and sure enough it was more or less unchanged.
I said that from June to September we’d be back to more
challenging conditions, which would not be good for the currency. And again
right on target it fell.
It is too early to say whether the last quarter will play
out on target too.
Another good one
Shanghai Comp
I thought April to June could see a risk of a significant
undermining of value. There was certainly a downward trend most noticeably in
June.
An although the trend did continue I was right that July to
September would be calmer. There was the stabilisation in that period I
predicted..
Again it is too soon to know whether the final months will
turn out as expected but trading volumes have risen as I suggested.
HK$
For March and April I predicted a lack of direction and
speculative actions. The currency traded in range.
I thought May to July would bring real instability and
concern about the peg. Actually the currency continued to trade in range.
But I also said the situation would be critical around
August and September but faith would hold things together. And that the Hong Kong dollar would be on the
move as pressure mounts on local interest rates
On 20th September the HK dollar hit its
highest level since late February
* Traders see spike
rooted in expected Fed, and local rate hikes soon
but
* HKMA said HKD,
money markets are operating in an orderly manner
Another well timed forecast overall
Hang Seng
I said that April to June would see the beginning of a new long term phase for
the index and initially this would seem
broadly positive,. The index stabilised
and even had some upside until the last half of June.
July to September was
a very mild period though the values fell rather than rose it indeed wasn’t dramatic.
I said that October to December could see a return to the
frantic pace of late 2017 and there is
much more momentum ( down) in October. We’ll see what happens in the next 2
months.
Forecast: Good, though not as good as China
Japan
Japan had a decline in GDP in the early part of 2018, this
is not due to the issues that dog other countries but to the declining and
ageing population.
So yes there are financial concerns and yes they are interesting
times I have not found specific evidence to support my prediction that May and
June would see the disconnect between the people and leaders continuing though.
Though it has been true that relations with other nations dominated.
“The growth rate, for the second quarter was well ahead of the country’s long-run
trend, and suggests the Japanese economy is still in a phase of sustained
economic expansion despite deepening labour shortages and the threat of a
global trade war.”
Again I have not found specific evidence that July to
September sees the people shift to being more dynamic and trying to address the
structural concerns.
But I was right that there were ongoing budgetary adjustments and attempts to
create a shift in structural issues.
the Bank of Japan recently downgraded
inflation and economic growth forecasts through fiscal 2020, putting its 2
percent inflation target well out of reach for the foreseeable future.
OK forecast. Another case where we are looking at long term
trends in a short timescale so difficult to assess.
Yen
As expected March and April were more or less flat value
wise.
Although there was a blip in late May as suggested I am not
convinced it merits a confirmation of my prediction . The period May to July was
indeed mainly stable however.
August to October was indeed similar to March and April but
there was no noticeable increase in value at the end of October. The challenges
for the central bank were real but there was no rate change in October.
Forecast marginally better than chance but not great.
Nikkei
I was right about the positive trend from March to May and
there was volatility. Whilst there were no technical glitches as such there
were issues around cryptos.
However June to august did not see big gains in values.
Rather it was late September early October that showed the bigger gains albeit
short lived. Nevertheless my overall broader prediction for the year, that
there would be continued support for the index value even if there are no trend
gains has proved right.
Moderately ok. Good on wider picture, poor on the detail
Indonesia
Economically things were reasonably positive in the period March to May , but politically my forecast was
for a shift in the mood ( of inertia). The people are energised and although
this is broadly positive it could give rise to some pressure to change faster. There
is concern that things are drifting. Then I said June to August would continue this
and it would not be all plain sailing with continued failure to manage
dissident factions and issues relating to development.
In actuality this is From “The Conversation” on July 9th
In Indonesia today, reform has stagnated. …….As well as the hardliners,
today these include enormously wealthy oligarchs, tenacious survivors of former
dictator Suharto’s regime and elements of the armed forces. These disparate
forces that together form Indonesia’s revisionist and populist right have
little in common and often compete with one another. However, they also create
expedient alliances from time to time, motivated by a common desire to roll
back at least some of the democratic system initiated by Reformasi, the
reform era. Together they can sometimes intimidate or outflank progressive
civil-society leaders. Governments, local and national, seem uncertain about
how to respond to these challenges, and vacillate between inaction, opaqueness
or endorsement of reactionary policies. As a result, 20 years on from Reformasi,
the spirit of reform that drove democratisation seems distant.
Although I stated that September and October would be much
calmer months, there was clearly a tsunami that has a significant impact.
Economically though things were more positive than expected.
Rupiah
I said that March to May there would be confusions about
direction and the uncertain environment will probably keep values in check. The
currency was basically flat in this period.
I also said that there was a chance of inflationary
conditions which would lead to significant management by the government and
there was a noticeable rise in interest
rates.
I said that july and August are similar in tone. With small
interest rate changes and this proved the case. I struggled to read the
resulting value trend but was sure that there would be one and there was a
noticeable decline in the currency’s value.
I correctly forecast more interest changes for September/October
but though that the mood may be more
positive. The currency has flattened.
In some ways a good forecast but lacking some important
information on direction. Could have made some nice bets on interest rate changes
though..
S Korea
I expected a more tricky time than all of the previous year
in many respects.
South Korean exports declined in April for the first time in
18 months I said that March to May could the country entering a new phase which might
be unsettled and the leadership may be ( perceived as) weak. I expected this to
continue through the period to October with a focus on budgets and resources..
I thought there may be issues regarding NK or other
countries by August - October
These are recent quotes which confirm the analysis
Public support for South Korean President Moon
Jae-in has plummeted. Peaking at 83 per cent following his agreement with North
Korean leader Kim Jong Un to end the Korean War, his approval rating has crashed
to 49 per cent — the lowest since he took office. The biggest reason for this
drop is South Korea’s weakest job growth in nearly nine years:
and
South Korea has announced a fresh set of measures to boost
economic growth and create jobs by offering financial support for smaller
companies and a fuel tax cut to spur consumption. The administration comes
under growing pressure to revitalise a stalled economy and weak jobs market.
South Korea’s export-driven economy is threatened by the worsening trade war
between the Washington and Beijing as well as China’s slowing economic growth.
Consumption has been
held back by high household debt.
Forecast – very good
, important to see the change in overall sentiment
N Korea
I expected March to
May to be a period of change. However I thought that might be a worry for other
nations when in fact the attitude of the leadership was much more open to
negotiation.
It is difficult to tell whether I was right that the
leadership might be perceived as weak, it is possible that internally that was
so, externally it certainly seemed as if he was more accommodating. And
obviously everyone was asking if it was for real?!
I also said that there was evidence of big developments,
changes to strengthen the economic position. I did not expect the various
summits ( South Korea, China, and US on June 12th) that occurred but they
presumably have made economic trade easier.
I did say the grandstanding would be likely to continue and
there was a point when he said he would call the whole thing off!
As a result it is true that September and October were more
positive months and N Korea was pretty much out of the news.
Pretty good overall, but missed the crucial co-operation.
India
I thought that March to May would see things improve
slightly with a change of mood generally leads to more support for the
leadership, although there are still pockets of objection or protest, which was
demonstrated by this article
Modi has completed four years in office but there is
widespread disappointment among the Indian people with his performance as their
prime minister. There is a strong perception that Modi spent most of the last
four years either in state election campaigns, on foreign tours, or giving
scores of moral lectures on state-run television, radio, and his own online
app.
The economy grew well in the quarter to June but a survey found about seven per cent
decline in the percentage of people expressing satisfaction with the Modi
government over past two years, but that a majority supported.
I forecast that In June to September despite a feeling of
stagnation within policy and economic circles, there would be enough structure
and budget to maintain stability and economically the country did continue to
grow and Modicare was launched. But I also said September would sees some
outbursts though and in New Delhi Sept 5 Thousands of farmers and labourers
protested against what they called the anti-people policies
Pretty good overall. Even
some correct details. If anything forecast could have clearly separated
economy more.
Rupee
I expected the currency to be undermined somewhat in March
to May but the decline was less than I expected.
It is difficult to assess the longer term turning point mentioned
at this stage.
I said the situation would be more moderate in June to
September, and this time the picture was in line with my expectations but there
was no rise in the value of the currency.
October has seen more
of the volatility I expected but perhaps less of the wider trend.
A mediocre forecast – not much better than chance
Sensex
I predicted the trend on the earlier months would reverse in March to May and this was so. There
was volatility as expected but again as expected with not too much impact
However I said that June to September would see a trend dragging
the index down. Investors may be a bit disillusioned now and might even not respond to the good news. This
was wrong at least for Jly and August. September did see another turning point
however.
We will have to wait for December to see whether the last 3
months accord with my forecast.
Rubbish really. No point in nailing the turning points if
the direction is wrong!!!
Pakistan
I predicted a long term shift in power as a result of the
elections though I said it would not be radical. I also said that July to
September indicated that there is some
sort of change as the people, as a whole,
become more cooperative and prepared to adopt government initiatives.
With the new government ( certainly a change in long term patterns but probably
not radical at least at first) and a corresponding change of mood.
I also said that there was still the ongoing issue of international
matters to contend with particularly in September. In fact it is the need to
raise financial support which has been the prime international matter
Protests re changes in blasphemy laws may well prove
November problematic as forecast too
Moderately good prediction.
Russia
I forecast that there is little evidence of focus on
leadership change for the election and assumed there would be only marginal
changes made. And of course this being Russia Putin carried on!
I also said that global financial/banking matters become
more important and the period coincided with more sanctions. However
economically the country continued to benefit from the oil price.
I forecast June to August as relatively calm and with this
coinciding with the World Cup which went so much better than generally anticipated
I get extra brownie points for this.
I said September and October continue this calm, although
there may be some weeks where the events of 2017 are touched on (issues re
Syria/Israel were reactivated as was the Skripal mater albeit an early 2018 one)
. The economic benefits of oil were further harnessed in this period..
Overall – pretty good. On the basis of the good forecast for
Russia and other resource countries I took out an oil contract in 2017. So
pretty pleased all round on this one.
Rouble
I said that March to May was a periods when anything can
happen and expected large sudden movements in value. There was a rapid fall in
the value of the currency in April. But I forecast an upturn
After the April event the currency remained relatively unchanged
through to August. I has said June to August is more moderate in tone. There is
too much uncertainty for investors and locals alike to create any great sense
of direction. There is also less volatility than in the previous three months.
I expect the picture to be relatively unchanged for this quiet period. At least that was right!
September to October I predicted another period of mixed
outcomes and volatility. But the initial August breakout was a decline. However
September did reverse this.
Turkey
I thought that March to May would see focus on the currency
( see Lira analysis) which was certainly true. I also predicted that June to
August would be slightly more unstable, as events shake up the status quo
somewhat, and the financial problems definitely had an impact by this time
undermining the growth earlier in the year not to mention economic and
political spats with the US . I didn’t notice that there were elections in June
but then I am not sure anyone did as there was no change at the top. In fact I
said on balance things still seem rather positive for both the people and the
government. The latter is definitely true but less so the former.
I predicted September
and October really just see a continuation of the previous 3 months, perhaps
with slightly more expectation. Of course Turkey have been caught up with the
Saudi thing but it isn’t really a matter for the Turkish people only the
government so wouldn’t show up much in this chart.
I also thought that wider events would have a knock on
effect on Turkey over the coming few years. We will see…
Lira
I totally nailed the negative mood on the Lira from March to
May , the currency fell quite consistently. I particularly thought that the
latter part of the period would be bad but that July and August would be less
intense ( still negative). I was wrong about this the greatest falls were
August.
However I was right when it came to September and October. And
a reprieve where investors may well be encouraged to buy the currency. However I
underestimated the size of these movements.
Overall a good forecast, though some details could have been
better
Iran
The economic position was moderately improved by March to May confirming that it was less intense than some
of the previous months ( e.g the earlier protests) but I still foresaw
challenges and, encouraged by a concerted Israeli campaign, Trump started his
drive to reverse the nuclear agreement.
I also said that around the summer there would be a change
in the way the country communicates- changing from the short sharp comments
which antagonise to longer speeches and this has indeed proved to be the case. I
thought this period be a more even tempered phase and the economic conditions
look rather mixed both of which were true.
And in September and October
I said that a gradual change to more measured communication would arise.
This is probably true although as before we can’t judge longer term things yet.
I thought that in the shorter term however there may be some
sudden big announcements which shake things up. And of course this was the time
that Trump’s new sanctions and total withdrawal started to bite.
My final remark was rather odd but in retrospect rather perspicacious
- I said that at the end of the period, there is some opportunity to make
progress in developments or propaganda matters – which of course the Saudi
situation has made possible ( although the highly suspect and likely set up
Danish event to some extent negates that)
Israel
I thought that March to May could see protests and more and
that it was likely to be quite an unstable time for the people as a whole. Once
again there may be a temptation to harness force to attack others. There was the ongoing Palestinian situation of
course and on 30 March 2018, a
six-week campaign composed of a series of protests was launched at the
Gaza Strip, but also direct combat between ( alleged Iranian) groups in Syria
and significant retaliation by Israel.
However I said this may well create a bigger backlash than
before and among other objections, Israel's
use of deadly force was condemned on 13 June 2018 in a United
Nations General Assembly resolution.
As I predicted June to August were mixed months, when the
dissatisfaction did continue but there
was less actual confrontation.
I also said that there may be financial issues to contend
with, though I’m not sure the arrest of the leader’s wife for fraud was what I
expected. The head of the central bank also stepped down not convinced by
government policy
I expected that things would be much the same in September
and on 17 September, missile strikes that hit
multiple targets in the Syrian government-controlled western Syria were conducted by the
Israeli Air
Force. It is difficult to
establish how this is affecting the government though.
Growth announced in September was lower than expected but I
expected it to be a transitionary time economically and politically.
Naturally, I have left, the currently most interesting
country, Saudi till last but I must confess I am somewhat disappointed in
myself.
I correctly thought March to May would be quieter months.
Though there were reports of Mohammed bin Salman, being shot and injured this did not appear
to have much impact on the leadership in general.
I said some changes
might relate to women’s matters
and in June The Saudi Arabian
government lifted the ban on women driving, which is the country's most
progressive form of women's rights to date.
June to August comes
with a sense of drama. I thought oil and terrorism would be key. Oil certainly
- the country called off its plan to list Aramco for the time being at least
and there was a terrorist incident in the country in July. But far more
significant was the ongoing situation in Yemen. On 6 July, Yemeni forces fired a domestic
ballistic missile at a "strategic economic target" in Jizanin
southwestern Saudi Arabia. On 9 August, a Saudi-led airstrike attack on a school bus in
Yemen killed 40 young school children and 11 adults.
I was prescient though I said rather cryptically that were
indications of a major shake –up in the country’s foundations but it doesn’t
quite manifest now. So something in the air but nothing concrete at this stage.
Perhaps that was right
Although I thought that events would be moving faster by September
and October I did not predict anything significantly different and said that
October could be positive. Obviously totally missing the main event- though to
be fair the impact on the actual leadership ( so far) and the Saudi people in
general has been minimal. And I did predict a trickier time from November.
Prediction broadly good but missing a key event so not
perfect.
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