2019 Review July – Dec
Finally back with a lot to catch up on. It has not been an
easy 12 months for me- not unexpectedly of course – I do look at my own chart –
and this has meant that I have lacked first the time and latterly the energy to
even review my old forecasts leave alone write new content. Hopefully I will
have more of both going forward.
First lets deal with the less interesting matter of the
review of the second half of 2019. Not some of my best forecasts, I was definitely getting restless by this point in the project
UK
There was certainly transformation in summer 2019 as Boris
Johnson took over as Prime Minister and the Brexit no deal became more likely.
Things were relatively stable mainly due to the time of year and although there
were some negative economic statistics it was relatively stable.
The country certainly revisited the debates of
January/February in September and October with Brexit and parliament peroging
in the news. And announcements re the
Royal family turned out to be Prince Andrew’s connection to ( the by then dead)
Epstein
November was indeed moderate as everyone waited for the
election. And sure enough the December election resurrected the Brexit issues
and related instability.
Not perfect but on right lines and some good calls 75%
UK STERLING
July and August were calm as expected – though a low was
reached there was some change of sentiment.
However there was less change than I expected in the
currency in September to November – and there was even some ground gained value
wise. There was no ctual change in the Governor but the new one was announced.
December was certainly a culmination of events, and did mark
a turning point again and of course the election led to more trade.
Again not bad but not good enough for an A 75%
FTSE
July through to October was indeed more of the same with the index not
really showing any real direction.
I expected more buying in the last 2 months – this was the
case though not as much as I expected.
Another reasonable effort 80%
Euro
I did not forecast much action for July and August and
although there was some activity it was not significant in the overall trend.
Policy activity was forecast for September to November and
sure enough the ECB restarted net purchases under the Governing Council’s asset
purchase programme (APP) at a monthly pace of €20 billion as from 1 November
And in December, I correctly foresaw a sense of optimism
about the currency.
Not bad at all 85%
Germany
The prediction of protests ( limited) turned out to be at
election level with the central parties losing ground in September state ones
and October and November did see this unsettled phase continuing.
I thought that December would be critical for economic and political future
development and the farmers protests coupled with the weakest GDP figure since
2012 confirmed this.
Okish, maybe lacked substance 75%
France
I didn’t predict too much change fro France at this time-
assuming that thinsg would be less testing and to some extent this was true
with moderate economic stats..
The country ended the year with a small growth in GDP .
Ok, but nothing special 70%
Italy
Although I predicted heated debate in July to September I
did not specifically see the government crisis- however the overall feel to the
period was correct.
I expected the next months to be about the people’s view and
indeed the “Sardines“ movement took hold protesting against the far right and
the momentum of this had really taken off by December confirming my predictions
overall.
Quiet good 85%
Spain
After failing to get a majority the government did improve
its standing from July to September and the economic situation was moderately ok
that quarter.
I saw October and November as a waiting period – and this
proved true as another set of elections were scheduled and held in November
However the situation in December was more moderate than I
anticipated with no particular critical point although there are worries about
the coming years and the population/debt trends.
Okish again 75%
Greece
I stated that June to August was the beginning of radical
change when the leadership is likely to be overturned and the country become
more independent.
There was an election in early July which did indeed lead to
a change of government
Although there was no obvious change in the relations with
Europe and the Euro – part of the new governments plan is for more economic
independence. I also saw the country harking back to the past and interestingly
the government wishes to reject the PR method of voting in a return to pre
1950s.
I saw November as
milder and although debt was still an
important consideration. it would be as confrontational as the last few months
have been and this was more or less true.
However I was too negative in my prediction for December even though I was right that there was some
hope that change will bring better times .
Saved by the change of government but otherwise mediocre 65%
Ireland
Although I got some of the themes right for the political
situation I assumed the issues were internal when in fact they were Brexit
related..
Interestingly this did tie with my prediction that September
to November would see the people in a feisty mood but not opposed to the
leadership.
I was correct that December would be exciting as it sees
changes on a wider scale that will impact the country over the next decade as
the UK election meant Brexit border complications would become a reality.
Another 70% then
I predicted that October would see another shift- affecting Switzerland’s place within the global economy.
That may be so in the long run but the short run the shift was in the split of
parties in the election – although there
was no change in the government green parties gained.
I said December 2019 is for the most part a positive month. Although there are some
obstacles the overall theme is one of positive evolution. It is Switzerland
after all, dramas are not too big!
Moderate 65%
My predictions for
Iceland were a big vague and don’t seem to really tally with anything I know (
although there may be local policy decisions that I don’t know about).
I am unimpressed with this 20%
USA
July and August were ok – but the financial situation (
markets aside) wasn’t as positive as before. Divisions continued within the
population. There were many anti gun rallies – and a number of mass shootings.
Trump was accused of racist remarks about some democratic representative not to mention the beginning
of the impeachment hearings. My forecast
wasn’t especially specific for this
period but reasonably captured the mood.
Whether September saw long term shift in the financial situation of
the country is impossible to judge but ( again market aside) the stats were
starting to cause concern. I correctly
deduced that interest rates would be affected – there were 3 drops in as many
months, and that the housing market was cooling.
I wrote what is in retrospect a rather cryptic comment
that “by November, it is noteworthy that
the conditions which have created a continued faith/despair in the leadership
are ending as the mist lifts and reality for good and bad manifests” and of
course this was the end of the impeachment investigation and the beginning of
the proposal to impeach with the first vote in early December.
And I was correct that December would be positive
financially as the stats were significant ly better by then.
A good forecast 85% ( almost merits more but being critical
here)
It was true that the fundamentals were being challenged in
August to It is a mixed period for the Feb leadership
Trade tensions between the US and China and heightened political turbulence
across the globe continue to rattle financial markets and recession warnings
are strengthening. The fear of a slowing global economy is sparking flight into
long-term treasuries as investors lack confidence in the near-term economic
outlook. US Treasury yields tumbled, with the biggest inversion between the
short and longer yields since March 2007.
As expected the last two months of 2019 were somewhat quieter.
Ok but not really good – 60%
I correctly forecast that June to October 2018 would see a let up with enough support to prevent big
falls and overall not much direction.
Indeed July to mid October were pretty
much flat.
I expected more focus on the market in November though there
was more buying than I predicted.
I think it is also true that December was difficult in terms
of knowing where to invest next though once again I underestimated the
addiction to the market and to Fed actions. It was correct to state that the
focus was on relative components as tech once more dominated old school stocks.
Ok but not outstanding another 75%
Nasdaq
I was right about June to August – better but uncertain –
rises in June gave way to lack of direction by the end of the period and sure
enough the overall index ended August
pretty much where is was in March.
I was right about the next few months too – there were gains
right the way through to December
This was generally a good forecast 90%
I am glad of this because I know when I was looking at these years it was with the
expectation that Saturn/Pluto would signify problems- but I didn’t fall into
the temptation to ignore the actual chart even when my gut was saying the
opposite – being able to overcome your biases is crucial.
With a small economic expansion in Q3 there was as I
expected not too much to worry about..
I predicted re-election for October based on a relatively
sound economy and although the majority was reduced this proved to be so.
I expected little change in December although I thought
there may be some small change to rates and there wasn’t.
Still all in all pretty good 90% - once again it is the
ability of the model to predict changes of leadership which is consistent.
Australia
I thought that
the July to September period could be more difficult for the people. And the
winter in Australia was not positive economiically. “Wages are stagnant. Wealth
is falling. House prices are down. Consumers aren’t spending. Businesses aren’t
investing. Interest rates are at record lows and may be heading for zero. The federal government and Reserve Bank
seem locked in an arm wrestle over whether fiscal or monetary policy should be
used to generate more stimulus. Unemployment has stopped going down. Overseas,
storm clouds are darkening.”
I also mentioned that there were signs of explosive themes.
As it turned out this related to the beginnings of the fires that raged until
the end of the year.
I also correctly thought that it might cause falls in value
of the currency and that the pattern
would continue into October and November.
I am not sure that December could have been called a quiet
month though, particularly in the East due to the fires. Perhaps otherwise it
was the case but even so I feel I should have seen the themes continuing.
Good but some weakness 85%
Not too bad a forecast for July to September . I said it
would see more economic power to the people and the new government were
certainly trying though the opposition rejected some measures. I also correctly
( but lets face it unsurprisingly) said that continued focus on long term issues and potential inflation would mean the impact of
that would be mixed.
October and November continued to see a mixed situation –
indeed there was a mixture of calls for
austerity and calls for stimulus. I also mentioned communications and the government
were playing up the prospects of the national treasury’s economic strategy
paper. Alhough the reality of the situation is the country is constrained by
debts etc. It is true that there was some optimism amongst the people – whether
misplaced or not
I expected December to be quieter and after poor stats for
Q3 it might have been but I also said “ There is some restraint relating to
longer term structural… freedom,”issues and the country was suffering even
greater power cuts at this time.
Not bad but lacks precision 75%
Mexico
I predicted that July to September would be a period where economic
statistics and availability of resources were fluctuating so no one trend dominates
and this seems to have been the case. The stats for the third quarter were flat
and I correctly deduced that October and November would continue this. However
I thought that the government would still be seen in a good light but that is
harder to judge as although still supported by his voters others were more
disappointed by the lack of progress.
I did say that there was a risk of significant conflict for
the people around late November/early December and there were protests by the
opposition whilst the government celebrated its first anniversary.
I expected the end of the year to be quieter and it was
though it is difficult to judge whether it was more difficult for the
leadership
Another ok but not stunning forecast 75%
Mexican Peso
I was pretty much right that July to September would be a
period when the currency will probably end up much where it started.
And again I was pretty much right about October and November
being relatively calm months. And
December was indeed a quiet month.
However I said that near the year end significant increase
in money supply could lead to some
weakness and this was not the case as the Peso ended December marginally better
than it started it.
Nevertheless pretty good 85%
Argentina
I stated that July to September would not be a period when
much progress is made but that great progress may be made behind the scenes. I
am not sure this was true- what was clear was that the election primaries
showed progress for the opposition but this would not be realised until October.
There was certainly focus on debts as expected but I said
that October and November would be an
extraordinarily positive time for the country and for the government. Clearly
for the existing government it was not and for once I failed to see a change in
leadership. Whether it is good or bad for the country is debatable.
December was indeed more difficult with Argentina failing to make debt payments
and the reality of the economic situation for the new government was becoming
apparent.
Not great though not atrocious 50%
July to September certainly saw the expected return to the trends of 2017-8. Though I
spotted that it would be in focus I did not however see the sudden decline in
August.
I thought that October and November and into December, would
not buck the longer trends, but might have a short term boost of some
sorts. There was no trend reversal but
things did steady out a bit. I said although we aren’t looking at major rises,
this might be a good time for the currency and I suppose relative to
2016-summer 2019 it was!
I was too optimistic about the detail but did have the right
idea about the trend 80%
Brazil
I thought that though the budget and economic situation was
mixed for July to September , there are many positives to be taken form this
period and indeed the economic forecasts were raised as things appeared to
improve.
I was more or less correct that October and November would
see many of the issues resurfacing- although and elements of opposition, I did
not expect it to literally Lula being released. It far more appropriately
described the objections to the Amazon deforestation. However I thought that it would be a good
period for the people and moderately ok for the government and the economic
situation did appear to continue improvements.
I expected December to continue the themes and this was the
case.
Better than I usually do on Brazil but nothing special 75%
I sais that July to September would be a time of little
direction and small shifts rather than big trends or even significant swings –
this was not really the case for the latter part of the period when the Real
did fall by over 10%.
However I was closer in October and November saying I
expected are milder months- it was relatively positive though not actually
positive. And indeed December was more in line with the positivity seeing some
small gain I said that it would see the trend dampened as traders wait to see what 2020 will bring
and that seems to have been the case.
Not my best but at least better than chance 60%
Venezuela
I was correct in predicting that July to September is once
again dominated by the opposing forces with little headway and that those
demanding change would be the focus of attention with other nations as the US
increased sanctions in August.
I correctly predicted that
October and November would see the issues relating to the leadership
continue saying “ It is almost impossible to have a stable parliament now”
Although I also said he people would be somewhat more content – I think perhaps
that should have been more resigned to the situation although some reports
suggest things were better than the year before.
Obviously we can’t say at this stage whether the year end
marks a 25 year turning point – we need some years to assess this but it does
seem as if by the end of 2019 the picture was becoming stronger and perhaps so
was one group.
Quite pleased again with Venezuela forecast 85%
Bolivar
I stated that July to September would see another key point
when the fundamentals are re-evaluated. In fact the change was a switch more
and more to dollar denomination in businesses – and far less pressure from the
government to prevent this.
I said that October and November could therefore herald a new financial environment and the
feeling is that this was the case, things were starting to stabilise because
there was less dependence on the local currency.
I saw December as being
the final stage of this part of the story of the currency’s fortunes and
indeed only one of the Bolivar sobrero notes from 2018 was accepted by then. It
is certainly the end of the era.
Much better 90%
I forecast that the opportunities in earlier months
would continue in July to October, and
there was some uplift in economic expectations around August. The Japanese
government also pledged $1b to cyborg technology that month.
However I thought the period could be destabilising for the
people and this was evidenced by the increase in consumption tax decided in
August and effective October and the pardoning of some 500000 petty criminals
by the new Emperor.
As expected November did not see much change. But I also
said emotions may run high and there may be major opposition in relation to technological
matters at this time which does not seem to be borne out at least based on what
I can discover.
I thought that December may be quite difficult with opposition
to the leadership who may have taken too big a step in their attempt to change
the structural issues. Japan announced it would spend nearly $120 billion to stimulate its
slowing economy and this was criticized s adding to the debt. It was true that
by this point the economic situation meant the leadership was at its least
popular since elected.
Moderate 60%
I correctly thought that May to July would be a bit of mixed
bag and I said that the latter part of
the period is one of adjustment but high levels of currency trade and the
movement was sharper at the end of July.
I correctly saw that
August to November would see change in sentiment as the Yen fell vs the dollar.
December wasn’t as calm as I expected but the currency did
end the month where it started. Though there was sharp movement going into
2020.
Nikkei
AI thought the end of July would be particularly sensitive-
there was a fall but not as great a movement as I might have anticipated.
I thought the period August to October would be about technology and not value but the index
did rise 10%.
I did think that November and December would be about value with volatility and re-adjustment
of positions . I said to watch the currency but it was the government stimulus
package that determined the market in the last month.
Not great really, probably no better than chance 50%
China
I thought that although the themes would continue in July
and August, there would be some let up in intensity. There were certainly
continued issues re Hong Kong and re US trade but China insisted on downplaying
matters.
I predicted September and October would see more shocks but that these would be merely eh next stage
of what has already happened. China
became more active in trying to end the chaos in Hong Kong and in October the
US hit China with bigger tariffs and the country’s economic situation was at a
decades low. I thought however that the Chinese leadership would still be
strong and positive throughout this period and this was so as it retaliated
with threats and counter measures.
I thought that November and December, would see rapid
changes economically and there was a sudden uplift in many indicators. It is
difficult to assess the mood of the people though vs my expectation as this
information is not available.
I thought there was likely to be big financial announcements
at the end of the year but the real announcement
was not financial December 31st virus one.
A just above Average 55%
I thought that July to September would see a more moderate situation but with severe instability, adjustment and rate
changes and that the negatives would win out.
There was in fact more activity than I expected with a fall
in value early August which was only partially recouped in September.
I expected trading to reach a high in October November and
certainly the London market Rem trading did. Although it seems like a generic
statement “More news and rate changes, and a string of events and decisions in
China and overseas impact on the level of the currency” certainly summed up
this period
December saw more of a month of adjustment, with the policy changes
I expected causing some slight value recovery.
However my reference to interest rate changes was not borne
out.
Maybe 70% but only just
I expected July through to September to see more inertia and
more fear with some positive economic news to lift spirits briefly. The index
responded accordingly falling into Mid August and recovering slightly by
September
October and November, reflected the predicted worry with a downward trend.
But although December did end the year on a very worried
note – that wasn’t reflected in the market until mid January.
The emphasis on technology over other stocks was correct
globally though.
Okish but December incorrect 75%
HK$
Rate changes were
expected to be very likely May to July and happened at the end of the period.
I thought August to October would see a slight lull in the
trends and there was little movement although there was another small rate
change.
And November and December did see a definite change in the
tone of the currency environment as well as another rate change
Difficult to score this one as not much really happens but
not bad re rates 80%
July to September did
see shocks especially early August but I
expected some protection in the form of
a stabilising influence and this seems to have been the case for the rest of
the period.
I don’t predict Hong Kong as a country so I am pleased that
the themes showed up in the market chart.
I said “The final quarter of 2019 is key, although there will be
difficulties for some investors, and indeed for the index proprietors here
seems to be enough to prevent either melt up or melt down even in the face of
some “interesting conditions”” Not bad either as a description of the HK
climate at that time or the index value.
95%
My election comments are not relevant as it was held in May.
There is evidence that there is stronger opposition amongst the people than in
the first term and there was a very low key ceremony to confirm the new term in
October.
I thought that December would be more positive and that relative
to many countries, Indonesia looked comfortable and this is certainly the case
with sustained moderate growth but perhaps not enough gars roots change
Not so great 50%
Rupiah
I didn’t predict much change in the trend for July to September
but I did expect some volatility. In reality this was no more or less than
preceding months.
I though October and November would be rather quieter, and more positive. While this
was true I still feel I didn’t fully capture the mood.
I correctly thought December would sees this continue.
I was right about the interest rate adjustments through the period.
Not particularly impressive 60%
South Korea
Matters continued but as expected more moderated in July to
September. e.g trade war with Japan. The economic picture had deteriorated
somewhat.
October and November did
see the situation and negotiations continue and may have been better as I
suggested given the slight improvement in Q4 growth. The resignation of the
Justice Minister confirms the expected mood among the people.
December as expected was quieter month with future economic plans the
focus as predicted and more tolerance due to the slight stats improvement.
Meh 65%
North Korea
I thought that July to September would be more moderate with
a lull in the mood as other economic and power matters take precedence in the
eyes of the world. This was both true and false- NK certainly wasn’t the focus
although it did undertake a series of missile tests and even so did agree to
restart talks with US.
October and November did see a return to the earlier
picture. Talks with the US stalled and
as well as continuing the tests above new missiles were tested too. KJU
racheted up rhetoric with US and Japan.
I thought that December would remain unstable with radical and contrary behaviour now and KJU
announced that there would be no de-nuclearization after all.
Fairly good 85%, maybe even higher
I predicted July to September would see a return to some of
the undermining mood of the pre -election years and indeed the economic
indicators were very poor and causing concern.
I am not sure that
there were more outbreaks of aggression than usual but Modi caused dissent by
revoking Kashmir’s status leading to a lockdown
I thought that October and November may be more obviously
unstable with upsets to the normal routine. On top of the Kashmir situation Maharashtra
had a political crisis. It did sort itself out by the end of the period as predicted
but still represents a concerning underlying theme.
December was probably less eventful that the early parts of
the year. But with the loss of control of a 5th state there was
definitely undermining of the leadership
. People also protested about the new citizenship laws.
But I also said despite this though the year may end on a
highly positive note. Highly positive is too strong but the December indicators
were better than expected.
Pretty good 85%
I said that July to September would see the challenges go away but would be more moderated time with
less volatility and no big trend movements. In fact early August did see a one
off shift in value and there was slightly more volatility than I thought.
I thought that October and November would see continued optimism despite
value/technology/tax shocks and might even still be a positive time, but I was
wary. In reality there was volatility but no trend these two months.
And although December started positive
it did not end so. Admittedly I hedged my bets a bit but I was still off
on this.
Not very good 40%
Sensex
I thought the early part of July to November would be the
most positive sentiments- but that later on in there was more discrimination in
what they were buying. Really it seemed
to be almost the reverse- though I did not predict big movements and there
weren’t any
November was flat as predicted . But I predicted December
would be more active with possible falls. In fact it was just more of November.
A mixed bag 50%
Pakistan
The Kashmir situation had a knock on effect on Pakistan and
confirms my prediction for July to August.
I was on the right track re August to November expecting a mood
of adjustment rather than aggression and this proved the cases.
I thought that December would be more of the same except an increase in the difficulties for the
leadership in implementing matters. And
this is true – the country struggles with its debts and special interests.
Ok 70%
I thought that June To August is somewhat easier on the
leadership than the previous 3 months- and although there were some protests
there was a lull at policy level – the financial issues were clearer – with GDP
growth noticeably slowing. I don’t see
any confirmation of any international matter sof significance for the period
though.
I can’t really say anything about September to November – it
seems to have been the opposite of what I predicted other than the fact that
the leadership stayed strong and there were communication issues as Russia took
steps to control its internet access and there were rate changes.
I thought December would be rather less significant for the
country on the global stage, but I expected matters related to rates and oil prices at the year
end. There was another rate cut and
significant discussions regarding oil output as well as the Saudi Aramco share
focussing attention on it.
Not my best 50%- But the difference between forecast and
actual in the one quarter just made me realise even the normal forecasts that
don’t seem so great are not that bad!
June to August was a time of volatility as expected but with
no real overall direction
I was unable to predict a direction for September to
November . I referred to inflation but what was really happening was the series
of rate changes. There was not much
change in overall value- which suggests without those changes we could have
seen rises in value
I did expect the currency to be more attractive in
December and it was.
Turkey
I had thought incorrectly that July to September, would be
the run up to the election which obviously was no longer the case. But I did
point out that it was a time when the government might be vulnerable although
it was actually the end of June when the re-run of local elections showed a
decline in the government’s fortunes this did have ongoing ramifications.
And I did say that
there may even the potential for some positive surprises and the economic stats
were better than expected ( though it must be said that they had been very bad
so it is relative)
I thought that October and November on balance would see
more positives than negatives now and the leadership has a brief reprieve until
2020 and indeed there was some uplift in economic expectations and fall in
inflation reported
I was definitely right that December would be a quieter
month, but I said that longer term
forces working to change the status quo within the country and there was
evidence of this as old allies of
Erdogan formed a new party.
70% - very good for some parts but election situation meant some was irrelevant
Lira
I thought that July to September would be mostly a
continuation of the themes of the first half of the year but with negative bias
rather than the positive May June ones . But I did think that some expansive
sentiment might offset slightly but not alter the trend. In reality there was a downturn in value in
early August but other than that the period was mixed.
I thought October and
November would be no better, and that it was probably a particularly bad time for the
currency. It wasn’t as bad as all that though there was slight fall in October.
An I thought December would see a continuation of the themes
with some investor paralysis and
certainly the currency saw a further slight fall.
80% Ok re direction but not magnitude
July to September was as predicted a more moderate time
though there is no doubt the leadership continued to exercise their power with
force throughout as expected.
I said that October and November, would be l about radical
changes and disruption to the foundations and some restrictions were lifted in
October and the Aramco offer process started in November. But as predicted it
was not all straight-forward or as the BBC described it reform and repression
go hand in hand.
December obviously had the Aramco offering itself accounting
for the announcements prediction but also I thought there may be something involvement in hacking or other technology or
communication problems and Twitter said it had suspended thousands of
accounts linked to a manipulation effort stemming from Saudi Arabia, in the
latest crackdown on state-sponsored
propaganda efforts.
Pretty good 90%
I expected June to September to see the people really
unsettled, but also sees another phase
where the government consolidates the country’s power. I said once again this
may relate to other nations-and a crisis developed in the Persian Gulf between
the US, Saudi and Iran over tankers etc. I am not going to attempt to determine
what was true merely that the situation confirmed predictions.
I thought October and
November would see a continuance of the unsettled mood within the country which
was the case, I also said there would be clearer opposition to some of the
leadership policies and in November there were significant protests after fuel
price rises.
I also said that December is the beginning of the final
period characterised by sudden outbursts of communications – Iran announced its
crackdown had killed some protestors. But this was only the beginning as 2020
will show.
But the latter part of the month was quieter nationally and
internationally as expected.
Israel
I was correct that June to august, while continuing the
tricky and not especially pleasant phase wasn’t particularly eventful
either.
I thought that September
to November would pick up the pace. I
thought there may be a risk of backlash causing the leadership to have to make
adjustments. In fact it was more than
this with Netanyahu failing to form a government still. There were also clashes
in Gaza.
As predicted December was quieter, but with a further
challenge to the leadership as more elections will have to be held although
control within the main party was restored
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